Asian stocks drop for fifth day

Asian stocks declined for a fifth day and rubber fell amid concern the slowing global economy will curb earnings growth. The yen strengthened, while oil rebounded as US stockpiles shrank. The MSCI Asia Pacific Index dropped 0.1 per cent as of 2.36pm in Tokyo, heading for its longest losing streak since May. The Nikkei 225 Stock Average slid 0.4 per cent. Futures on the Standard & Poor’s 500 Index were little changed. Rubber retreated 1.1 per cent in Tokyo, while oil gained 0.9 per cent in New York to recoup some of yesterday’s losses. The yen strengthened against 13 of its 16 major peers. Applied Materials Inc, the US chipmaking-equipment provider, cut its fiscal 2012 profit forecasts, while China Southern Airlines Co, the nation\'s biggest carrier by passengers, said first-half profit may fall more than 50 per cent amid slowing economic growth. Germany’s top court said a decision on whether to suspend legislation for the euro bloc’s permanent bailout fund and fiscal treaty could take months rather than weeks. “Uncertainties about the outlook for global demand are weighing on the market,” said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co, which manages about $6.3 billion (Dh23.13 billion). “Stocks are becoming unattractive, with US earnings that are not so great and with ongoing Europe debt concerns.” Almost three stocks fell for every two that rose on MSCI’s Asia-Pacific gauge, which is extending a four-day, 2.2 per cent decline. Advantest Corp, the world’s biggest maker of memory- chip testers, slumped 3.7 per cent in Tokyo, while China Southern lost as much as 2.6 per cent in Hong Kong. Wen comments The Hang Seng China Enterprises Index dropped 0.9 per cent in Hong Kong headed for its lowest close since October. Analysts have not been aggressive enough in cutting Chinese corporate earnings estimates as the nation’s economic slowdown intensifies, Religare Capital said in a note dated yesterday. Premier Wen Jiabao said promoting investment growth is the key to stabilising China\'s economic expansion, according to a statement posted on the government’s website yesterday. The nation’s economic growth may have slid to 7.7 per cent in the second quarter, according to the median estimate in a Bloomberg News survey, the least in three years. Germany’s Federal Constitutional Court heard arguments yesterday in Karlsruhe on whether to put the country’s approval of the European Stability Mechanism and fiscal pact on hold until it rules on their legality. Both houses of parliament approved the new laws on June 29 with a two-thirds majority. Rubber, oil Rubber futures dropped to 246.1 yen (Dh11.37) a kilogram in Tokyo. A 2.4 per cent plunge by oil in New York yesterday reduced the appeal of rubber as an alternative to synthetic products used to make tyres amid slowing demand in China, the world\'s top consumer. Oil gained 0.8 per cent to $84.61 a barrel today amid speculation declines may have been excessive amid shrinking stockpiles in the US, the world’s biggest crude consumer. US inventories fell 695,000 barrels last week, the American Petroleum Institute said. An Energy Department report today will probably show supplies slid 1.38 million barrels, according to the median estimate of 10 analysts in a Bloomberg News survey. Japan’s yen climbed 0.1 per cent to 79.36 against the dollar. A stronger yen cuts the value of overseas earnings when repatriated and weighs on Japan’s export-driven economy. Consumer confidence Australia’s dollar strengthened 0.2 per cent to $1.0210 after the release of a private report today showing consumer confidence was at a five-month. The sentiment index for Australian consumers advanced 3.7 per cent in July to 99.1, the highest level since February, a Westpac Banking Corp. and Melbourne Institute survey showed. The cost of insuring corporate and sovereign bonds from non-payment in Asia climbed, according to traders of credit- default swaps. The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan increased 2 basis points to 168.5, Royal Bank of Scotland Group Plc prices show. The benchmark has traded between 210 and 132.5 since January 1, according to CMA. From gulfnews