June 16 (Bloomberg) -- Asian stocks fell for a second day, led by automakers and mining companies, after a New York manufacturing report missed economist estimates and commodity prices sank.
Toyota Motor Corp., the world’s No. 1 automaker, fell 2.1 percent in Tokyo. Sony Corp., which gets 24 percent of its sales from the U.S., retreated 1.9 percent. Rio Tinto Group, the world’s third-largest mining company, slumped 4.9 percent to A$71.83 in Sydney as oil and copper prices fell. Declines in Asia extended a global slump that dragged the MSCI World Index down by the most in two months yesterday.
“The green shoots of an economic turnaround continue to appear, but the question is whether markets have priced in a bumper harvest,” said Tim Schroeders, who helps manage $1 billion at Pengana Capital Ltd. in Melbourne. “We need to see more evidence of a sustained pick-up in demand to sustain current commodity prices.”
The MSCI Asia Pacific Index sank 1 percent to 102.58 as of 10:21 a.m. in Tokyo, extending yesterday’s 1.5 percent decline. The gauge has surged 45 percent from a more than five-year low on March 9 amid speculation the global economy is recovering.
Japan’s Nikkei 225 Stock Average fell 2 percent to 9,834.97 before a central bank decision on interest rates today. Australia’s S&P/ASX 200 Index declined 1 percent. New Zealand’s NZX 50 Index lost 0.7 percent.
The Kospi Index dropped 0.8 percent in Seoul as MSCI Inc., whose stock indexes are tracked by investors with about $3 trillion in assets, left South Korea unchanged as an emerging market. The country, the Asia Pacific’s sixth-largest stock market, had been under review for an upgrade to developed status.
Manufacturing Contraction
Futures on the Standard & Poor’s 500 Index dropped 0.1 percent. The gauge slid 2.4 percent yesterday, the most since May 13, as the Federal Reserve Bank of New York’s general economic index fell to minus 9.4 in June from minus 4.6 the previous month. Economists in a Bloomberg survey had expected the gauge to stay unchanged. Readings below zero for the index signal manufacturing is shrinking.
“Investors expected the global economy will recover at a fairly fast pace, but this view is changing to one that a recovery will remain moderate,” said Fumiyuki Nakanishi, a strategist at SMBC Friend Securities Co.
Toyota, which gets 31 percent of its revenue from North America, sank 2.1 percent to 3,750 yen. Sony, the maker of the PlayStation 3, lost 1.9 percent to 2,580 yen.
Rio Tinto Group, the world’s third-largest mining company, slumped 4.9 percent to A$71.82. BHP Billiton Ltd., the world’s biggest mining company, fell 1.8 percent to A$36.35. Copper futures dropped 3.6 percent in New York yesterday, while crude oil sank 2 percent, falling for a second-straight day.
‘Under Pressure’
“We’re seeing a bit of a snap-back after markets got ahead of themselves, especially commodity stocks,” said Ben Potter, an analyst at IG Markets in Melbourne. “Despite some green shoots hinting at a recovery, the fundamentals of the global economy are still under pressure.”
Materials and energy stocks are the best performing of the MSCI Asia Pacific Index’s 10 industries in the past month as investors bet demand for raw materials will pick up as the global economy recovers. The International Monetary Fund raised its growth forecast for the U.S. economy yesterday.
The MSCI gauge climbed more than 10 percent for a second month in May, which hasn’t happened since the two months ended 1993. The rally since March has driven the average valuation of companies in the gauge to 1.5 times the book value of assets, the highest level since Sept. 26, according to Bloomberg data.
“The likelihood of a global depression has all but disappeared,” said Pengana’s Schroeders. “People are now turning their attention to the appropriateness of stock prices.”
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