April 19 (Bloomberg) -- Asian stocks fell, leading the benchmark index toward its biggest decline since March, after Standard & Poor’s Ratings Service cut the U.S. long-term credit outlook, fueling concern that a recovery in the global economy may slow.
Toyota Motor Corp., the world’s No. 1 carmaker, dropped 2.6 percent in Tokyo. BHP Billiton Ltd., Australia’s biggest oil producer, dropped 1.8 percent after oil and metal prices declined. Samsung Electronics Co. lost 0.6 percent in Seoul after Apple Inc. filed a lawsuit claiming trademark infringement. Advantest Corp., the world’s second-largest maker of semiconductor-testing equipment, slumped 4 percent in Tokyo after Texas Instruments Inc. forecast revenue and profit that fell short of some analysts’ estimates.
The MSCI Asia Pacific Index fell 1.2 percent to 134.04 at 12:55 p.m. in Tokyo, with about five shares dropping for each that climbed on the 1,023-member gauge. The measure fell 0.5 percent last week, reversing three straight weeks of gains.
“If we get down to a point where the U.S. has its debt downgraded, the deflationary effects will be felt globally,” said Melbourne-based Tim Schroeders, of Pengana Capital Ltd., which manages about $1 billion. “A lot of credit is priced off U.S. denominated debt and those effects will be felt around the world.”
Japan’s Nikkei 225 Stock Average fell 1.2 percent. Australia’s S&P/ASX 200 Index slumped 1 percent and New Zealand’s NZX 50 Index lost 0.9 percent. South Korea’s Kospi index slipped 0.5 percent.
Hong Kong’s Hang Seng Index fell 1.3 percent while China’s Shanghai Stock Exchange Composite Index fell 1.9 percent.
U.S. Futures
Futures on the Standard & Poor’s 500 Index fell 0.5 percent today. In New York yesterday, the S&P 500 lost 1.1 percent, its biggest retreat since March, after S&P lowered its outlook on U.S. credit outlook to “negative.”
Toyota, which counts North America as its biggest market, fell 2.6 percent to 3,140 yen, the biggest drag on the MSCI Asia Pacific Index. Canon Inc., the world’s biggest camera maker, sank 1.8 percent to 3,555 yen. In Sydney, James Hardie Industries SE, the largest seller of home siding in the U.S., declined 2.7 percent to A$5.84.
The U.S. government risks losing its AAA credit rating unless policy makers agree on a plan by 2013 to reduce budget deficits and the national debt, the ratings agency said.
‘Medium Term’ Concern
S&P said there’s a one-in-three chance that the rating might be cut within two years and that its “baseline assumption” is that Congress and the Obama administration will come to terms on a plan to reduce record deficits.
“There’s clearly a concern about how the U.S. manages it debt in the medium term,” Schroeders said.
BHP declined 1.7 percent to A$46.69, the second-biggest drag on the MSCI Asia Pacific Index. Rio Tinto Group, the world’s second-largest mining company by sales, dropped 2.1 percent to A$82.27. Inpex Corp., Japan’s largest oil and gas explorer, dropped 2 percent to 586,000 yen.
Crude oil for May delivery slid 2.3 percent to $107.38 a barrel in New York, near a three-day low after China, the world’s second biggest crude-consuming nation, increased banks’ reserve requirements to cool inflation, signaling fuel demand growth may slow. The London Metal Exchange Index of six metals slumped 1.9 percent yesterday, the lowest since March 16.
The MSCI Asia Pacific Index lost 1.5 percent this year through yesterday, compared with gains of 3.8 percent by the S&P 500 and 1 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 13 times estimated earnings on average, compared with 13.4 times for the S&P 500 and 10.9 times for the Stoxx 600.
Apple Sues Samsung
Samsung Electronics, Asia’s biggest maker of chips, flat screens and mobile phones, fell 0.6 percent to 862,000 won in Seoul, the second-heaviest drag on the Kospi index. Apple Inc. filed a lawsuit claiming Samsung Electronics’ Galaxy phones and Galaxy Tab tablet computers are infringing patents and the trademarked look of the iPhone and iPad.
Other chipmakers also declined after Texas Instruments Inc., the largest maker of analogue chips, forecast second-quarter revenue and profit that fell short of some analysts’ estimates as lower Japanese demand and falling mobile-phone chip sales hurt orders.
Advantest declined 4 percent to 1,394 yen. Elpida Memory Inc., the world’s third-largest maker of computer memory, tumbled 4.5 percent to 1,120 yen. Taiwan Semiconductor Manufacturing Co., the world’s largest contract chipmaker, slipped 1.2 percent to NT$68.2.
Texas Instruments, whose earnings provide a broad guide of demand across the electronics industry, said the March 11 earthquake and tsunami in Japan curbed local demand and cut output at the plants it operates, as well as those of its customers and suppliers. The disaster cost the company $20 million in revenue in the first quarter. Sales of so-called baseband chips used in mobile phones also declined.
--With assistance from Norie Kuboyama in Tokyo. Editor: Nick Gentle.
