Asian Stocks Drop as Dollar Holds Gains While Oil Climbs

By Emma O’Brien and Weiyi Lim  

Photographer: Haidar Mohammed Ali/AFP/Getty Images

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Asian stocks fell, with commodity shares dragging the regional index lower for the first time in four days. The dollar traded near a two-week high versus the yen before data on the U.S. economy, while crude oil climbed.
The MSCI Asia Pacific excluding Japan Index lost 0.5 percent by 1:41 p.m. in Hong Kong, with a gauge of materials shares sliding 1.9 percent after a three-day rally. The S&P/ASX 200 Index fell the most in two weeks in Sydney and stocks in Shanghai retreated from a 2010 high, while markets in Tokyo were closed for a holiday. Standard & Poor’s 500 Index futures added 0.1 percent. The greenback headed for a fifth day of gains against the yen and climbed 0.3 percent versus Malaysia’s ringgit. Oil rose in New York and London.
“The commodity share rally was always expected to be short-lived,” said Ryan Huang, a market strategist at IG Ltd. in Singapore. “It was not sustainable with fundamentals
largely unchanged. Investors are taking the rally as an opportunity to cash out and sell.”
Commodities (BCOM) are poised for their fourth straight annual decline, according to a Bloomberg index, as the collision of rising supplies and slowing global demand cuts prices. The U.S. publishes oil inventories tomorrow. A report today may show the world’s largest economy grew more than previously estimated last quarter, amid a slew of data from goods orders to home sales.
Energy producers and materials companies led declines on Australia’s S&P/ASX 200 Index, which fell 1.1 percent, the most since Dec. 9. BHP Billiton Ltd., the world’s biggest mining company, sank 3.5 percent after surging almost 9 percent over the past four days. Iron ore, Australia’s biggest export, lost 1.8 percent yesterday in Qingdao, China, to the lowest level since June 2009. The Australian dollar weakened 0.3 percent to 81.12 U.S. cents.

Chinese Stocks

The Shanghai Composite Index fell 1.5 percent, paring its surge over the past month to 22 percent. Hong Kong’s Hang Seng Index (HSI) added 0.1 percent, while the Hang Seng China Enterprises Index, which tracks mainland Chinese shares listed in the city, climbed 0.7 percent. The Kospi index in South Korea lost 0.1 percent.
Economists surveyed by Bloomberg predict annualized growth in the U.S. economy will be revised up to 4.3 percent for last quarter, from a previous estimate of 3.9 percent. Orders for durable goods expanded 3 percent in November on the month, compared with a revised 0.3 percent increase in October, according to a separate survey before a report due today.
Aluminum snapped three days of losses, gaining 0.5 percent to $1,888.75 a metric ton on the London Metal Exchange.

Gold, Oil

Gold rose 0.3 percent to $1,179.52 an ounce on the spot market after sinking as much as 2.1 percent yesterday to $1,170.76, the lowest intraday level since Dec. 1. The Bloomberg Commodity Index dropped 1.5 percent last session, closing at its lowest level since 2009, and is headed for a decline of 15 percent in 2014, the most since 2008.
West Texas Intermediate crude rose 1 percent to $55.93 a barrel, after falling 3.3 percent yesterday. Prices are down 43 percent this year. Brent crude added 0.5 percent to $60.44 a barrel after slipping 2.1 percent last session.
Oil inventories in the U.S., the world’s largest consumer, probably dropped for a second week through Dec. 19, a Bloomberg News survey of energy analysts showed before data tomorrow. Iraq plans to boost output next year as members of the Organization of Petroleum Exporting Countries refuse to cede market position, Iraqi Oil Minister Adel Abdul Mahdi said.
The yen dropped as much as 0.1 percent today to 120.18 per dollar, its weakest level since Dec. 9. The currency capped a fourth day of losses last session, its longest slump in a month.

Ringgit, Won

Emerging currencies also fell today, with the won sliding 0.7 percent to 1,104.01 per dollar. The ringgit slipped to 3.4995 a dollar, near the weakest in five years. Malaysia’s foreign reserves fell to the lowest level since March 2011 as of Dec. 15, central bank figures showed, indicating the monetary authority may have intervened to stem the ringgit’s slide.
The Bloomberg Dollar Spot Index yesterday posted the highest close since March 2009 as the S&P 500 added 0.4 percent to an all-time high of 2,078.54. Gains in Intel Corp. and International Business Machines Corp. led the Dow Jones Industrial Average (INDU) up 0.9 percent, to a record 17,959.44.