Asian Stocks Fall for Sixth Day on Growth Concern; Honda Drops

July 8 (Bloomberg) -- Asian stocks fell for a sixth day, led by finance and mining companies, as an unexpected drop in Japanese machinery orders fanned concern a global economic recovery will falter.

Mitsubishi UFJ Financial Group Inc., Japan’s biggest lender by value, sank 2.9 percent after the nation’s bank lending slowed. BHP Billiton Ltd., the world’s largest mining company, lost 2.3 percent in Sydney on lower oil and copper prices. Honda Motor Co., which gets 45 percent of its sales in North America, slumped 4 percent in Tokyo as a stronger yen threatened the value of overseas revenue.

“The economic rebound won’t be rapid,” said Masaru Hamasaki, a Tokyo-based senior strategist at Toyota Asset Management Co., which oversees $14 billion. “It will take time, and share prices are beginning to reflect that.”

The MSCI Asia Pacific Index dropped 1.2 percent to 100.59 at 10:50 a.m. in Tokyo, taking its six-day decline to 2.5 percent. The index has fallen 4.4 percent since climbing to an eight-month high on June 12 as disappointing economic data damped demand for equities. The measure has gained 42 percent from a more than five-year low on March 9.

Japan’s Nikkei 225 Stock Average fell 1.8 percent. Australia’s S&P/ASX 200 Index declined 1.1 percent, erasing this year’s gains. Indonesia’s stock market is closed today for presidential elections.

South Korea’s Kospi lost 0.7 percent. Samsung Electronics Co., Asia’s largest maker of computer-memory chips, fell 0.9 percent in Seoul as researcher Gartner Inc. predicted spending on information technology will drop. Tokyo Electron Ltd., the world’s second-largest maker of semiconductor equipment, sank 5 percent on a Credit Suisse Group AG downgrade.

U.S. Earnings

Futures on the Standard & Poor’s 500 Index fell 0.2 percent. The gauge dropped 2 percent to the lowest level since May 1, amid concern second-quarter earnings will fail to justify a four-month rally in equities.

Alcoa Inc. will kick off the earnings season today as the first company in the Dow Jones Industrial Average to report results. Analysts estimate profits fell an average 34 percent at S&P 500 companies in the second quarter and will decrease 21 percent from July through September, according to data compiled by Bloomberg.

The MSCI Asia Pacific Index’s rally since March has been fueled by confidence stimulus policies worldwide will succeed in reviving global growth. Worse-than-expected U.S. unemployment data on July 2 fanned concern a recovery will falter. Japanese machinery orders declined 3 percent in May, the government said today. Economists had estimated a 2 percent increase.

Recovery Hopes

“The rally was built on recovery hopes, but a gap has developed between the level of the market and the real outlook for the economy,” said Hiroichi Nishi, general manager at Tokyo-based Nikko Cordial Securities Co. “All eyes are on the earnings about to kick off and the direction they will take.”

Mitsubishi UFJ slumped 2.9 percent to 572 yen as Japanese lending growth slowed in June for a sixth-straight month. Mizuho Financial Group Inc., Japan’s second-largest bank, sank 1.4 percent to 213 yen.

Loans, excluding those by credit associations, rose 2.5 percent last month from a year earlier, compared with 3.3 percent growth in May, the Bank of Japan said today.

Shares of financial companies also fell as the cost of protecting Asia-Pacific corporate and sovereign bonds from default jumped, according to traders of credit-default swaps.

BHP lost 2.3 percent to A$31.52 after a measure of six metals traded on the London Metal Exchange, including copper and zinc, slipped 1.2 percent. Rio Tinto Group, the world’s third- largest mining company, dropped 1.2 percent to A$46.80.

Overseas Revenue

Inpex Corp., Japan’s largest oil explorer, fell 0.8 percent to 706,000 yen. Woodside Petroleum Ltd., Australia’s No. 2 oil company, dropped 1 percent to A$40.08. Crude oil futures in New York lost 1.2 percent today, set for a sixth day of declines.

Honda lost 4 percent to 2,430 yen as the yen climbed to 94.50 per dollar, the strongest since June 1. A stronger yen reduces income when overseas revenue is converted into local currency. Toyota Motor Corp., the world’s largest automaker, lost 3.1 percent to 3,480 yen.

Samsung Electronics fell 0.9 percent to 644,000 won. Gartner forecast technology spending to drop 6 percent this year, worse than the 3.8 percent decrease it predicted in March.

While the global recession shows signs of easing, Gartner said in an e-mail that “IT budgets are still being cut and consumers will need a lot more persuading before they can feel confident enough to loosen their purse strings.”

Tokyo Electron retreated 5 percent to 4,350 yen after being cut to “underperform” from “neutral” at Credit Suisse Group AG. The brokerage cut its stance on Japan’s semiconductor production equipment industry to “market weight” from “overweight,” citing a weaker outlook for capital spending.