Asian Stocks Fall on Valuation Concerns; BHP, OZ Minerals Drop

June 15 (Bloomberg) -- Asian stocks declined, dragging the MSCI Asia Pacific Index from an eight-month high, on concern a rally since March had overvalued earnings prospects.

BHP Billiton Ltd., the world’s largest mining company and Australia’s biggest oil producer, sank 1.9 percent in Sydney after oil and metal prices slipped. OZ Minerals Ltd., an Australian mining company, fell 3.4 percent as Citigroup Inc. downgraded the stock. Malaysian Airline System Bhd., the country’s national carrier, slumped 3.1 percent after posting a quarterly loss.

The MSCI Asia Pacific Index lost 0.7 percent to 104.45 as of 12:29 p.m. in Tokyo, after ending last week at its highest level since Oct. 2. Japan’s Nikkei 225 Stock Average fell 0.7 percent to 10,068.03, while South Korea’s Kospi lost 1.2 percent.

“We’re still in the midst of the worst global recession in the post-war period,” said Shane Oliver, a strategist at AMP Capital Investors in Sydney. “It’s inevitable that aftershocks will keep coming through.”

Singapore’s Straits Times Index sank 1.2 percent after the government reported the city’s employers had fired more workers last quarter than initially estimated. China’s Shanghai Composite added 0.2 percent as Premier Wen Jiabao reiterated the need for “proactive” fiscal policies.

Shenzhen Development Bank Co. jumped 8.2 percent after Ping An Insurance (Group) Co. said it plans to buy a stake. Goodman Group, Australia’s biggest industrial real estate investment trust, rose 5.6 percent after the Australian Financial Review reported China Investment Corp. will take a stake in the company. Aeon Co., Japan’s second-largest retailer, climbed 4.1 percent on an upgrade at Bank of America Corp.’s Merrill Lynch & Co.

‘Signs of Stabilization’

MSCI’s Asian gauge has gained 48 percent from a more than five-year low on March 9 amid speculation the global economy is recovering. The Group of Eight finance ministers said after a meeting in Italy at the weekend that they have started pondering how to reverse the emergency steps they took to rescue the global economy as there are “signs of stabilization.”

BHP lost 1.9 percent to A$37.32. Rio Tinto Group, the world’s third-biggest mining company, lost 0.9 percent to A$76.51. Woodside Petroleum Ltd., Australia’s second-biggest oil and gas producer, sank 1.2 percent to A$42.36.

Gold futures dropped 2.2 percent in New York on June 12, while copper slid 2.9 percent. Oil fell 0.5 percent in after- hours trading, adding to the previous trading day’s 0.9 percent decline.

OZ Minerals declined 3.4 percent to A$1.01 as Citigroup Inc. cut the company’s stock rating to “sell” from “hold.”

Brokerage Downgrades

Malaysian Airline dipped 3.1 percent to 3.16 ringgit after reporting its first quarterly loss in more than two years on lower passenger traffic and wrong-way bets on the price of fuel. The stock was downgraded to “underperform” from “neutral,” Credit Suisse Group AG said in a report today.

Shenzhen Development Bank gained 8.2 percent to 21.63 yuan after Ping An agreed to pay $3.2 billion for a controlling stake. Ping An, China’s second-largest insurer, gained 1.2 percent to 45.64 yuan following a five-day trading halt.

Goodman Group rose 5.6 percent to 47.5 Australian cents. The company may announce China Investment Corp. will take a A$500 million ($404 million) stake, the Australian Financial Review reported, without saying where the information came from.

Aeon climbed 4.1 percent to 1,037 yen after Merrill upgraded the stock to “neutral” from “underperform” amid optimism store earnings will increase.