Asian stocks fell on concern a economic recovery may stall after U.S. retail sales declined and the Federal Reserve cut its growth forecast. Stocks pared declines on speculation moderating growth in China will prompt an easing of the country’s monetary-tightening measures. Nissan Motor Co., a Japanese carmaker that counts North America as its biggest market, retreated 3 percent, while LG Electronics Inc., which gets more than a third of its sales in the Americas, lost 0.7 percent in Seoul. BHP Billiton Ltd., the world’s largest miner, fell 0.7 percent in Sydney on concern slower U.S. growth will crimp demand for commodities. Chinese developers advanced as fears of further lending curbs receded after economic reports showed growth slowing. The MSCI Asia Pacific Index declined 0.7 percent to 116.84 as of 1:51 p.m. in Tokyo. About three stocks fell for each that advanced on the gauge, which rallied 1.5 percent yesterday after Intel Corp., the world’s biggest chipmaker, reported record second-quarter sales and Singapore raised its economic growth forecast. “The worst is already behind us, but the strength of the recovery is weak,” said Masayuki Kubota, a fund manager at Tokyo-based Daiwa SB Investments Ltd., which oversees about $51 billion in assets. “Concerns remain about the future once support from economic measures expires.” Japan’s Nikkei 225 Stock Average dropped 0.9 percent, its biggest fall in two weeks. Australia’s S&P/ASX 200 Index lost 0.6 percent and New Zealand’s NZX 50 Index slid 0.7 percent in Wellington. Hong Kong’s Hang Seng Index retreated 0.3 percent. S&P Futures Advance The Shanghai Composite Index declined 0.4 percent after adding as much as 0.7 percent as Agricultural Bank completed the first part of its initial public offering and the Chinese government announced the country’s economy grew 11.1 percent in the first half of the year. Futures on the Standard & Poor’s 500 Index gained 0.2 percent, reversing an earlier decline, after China’s GDP figures were released. In New York yesterday, the index slipped less than 0.1 percent as the decline in retail sales and the Federal Reserve’s assessment that the economic outlook has “softened” overshadowed Intel’s report. Nissan dropped 3 percent to 650 yen in Tokyo. Sony Corp., which gets almost a quarter of its sales from the U.S., declined 2.4 percent to 2,531 yen. LG Electronics, South Korea’s second- largest electronics maker, retreated 0.7 percent to 99,300 won in Seoul. Sales at U.S. retailers dropped 0.5 percent in June, more than projected, after declining 1.1 percent in May, Commerce Department figures showed yesterday in Washington. ‘Outlook Has Softened’ “The economic outlook had softened somewhat and a number of members saw the risks to the outlook as having shifted to the downside,” according to minutes released yesterday of a June meeting of Federal Reserve officials. Japanese exporters also fell as the dimmer global economic outlook led the yen to appreciate to as much as 88.11 against the dollar in Tokyo, compared with 88.92 at the close of stock trading yesterday. Against the euro, Japan’s currency strengthened to 112.06 from 112.99. A stronger yen reduces income at Japanese companies when overseas revenue is converted into their home currency. BHP Billiton declined 0.7 percent to A$38.12 in Sydney and Rio Tinto Group, the world’s third-largest mining company, fell 1 percent to A$66.71. Oil, Metals Mitsubishi Corp., Japan’s largest trading company, retreated 1.8 percent to 1,965 yen in Tokyo. Inpex Corp., Japan’s largest oil explorer, sank 4.3 percent to 422,000 yen. In Hong Kong, Cnooc Ltd., China’s biggest offshore energy explorer, slumped 1.9 percent to HK$12.50. Copper futures for September delivery lost 0.3 percent yesterday in New York, while crude oil for August delivery dropped as much as 0.7 percent in electronic trading today. Among other stocks that fell today, Nufarm Ltd., Australia’s largest supplier of farm chemicals, tumbled 28 percent to A$3.77 after the company cut its full-year profit forecast and said it won’t achieve one of its loan conditions. Nufarm also had its stock rating lowered at Credit Suisse Group AG, Royal Bank of Scotland Group Plc and UBS AG. CSL Ltd., the world’s second-biggest maker of medical treatments derived from blood, dropped 2.6 percent to $32.87 after a German rival lowered its full-year profit forecast because of lower prices. ‘Upside Potential’ “It’s hard to eliminate concerns about the future,” said Mitsushige Akino, who oversees about $450 million in assets in Tokyo at Ichiyoshi Investment Management Co. “However, shares have significant upside potential in terms of valuations.” The MSCI Asia Pacific Index has dropped 3 percent in 2010, compared with a 1.8 percent decline for the S&P 500 and a 0.8 percent gain by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 14.2 times estimated earnings, compared with 13.4 times for the S&P 500 and 11.8 times for the Stoxx 600. Stocks on the MSCI Asia Pacific Index pared declines of as much as 0.8 percent today after data showed China’s economic growth eased in the first half after the government succeeded in tempering credit expansion, investment spending and property speculation. China’s inflation cooled to 2.9 percent in June, the statistics bureau also reported in Beijing today. Industrial output rose a less-than-estimated 13.7 percent. The figures signal a diminishing risk of economic overheating, and give Premier Wen Jiabao more room to scale back restrictions on bank lending in coming months. ‘Signal For Slowdown’ Chinese developers climbed, including China Resources Land Ltd., which rose 1.1 percent to HK$16, and China Overseas Land & Investment Ltd., which rose 0.6 percent to HK$16.52, pacing gains on Hong Kong’s Hang Seng Index. China’s data “could be a signal for a slowdown in economic growth and corporate earnings for the second half of the year,” said Peter So, head of research at CCB International Securities Ltd. Still, “this data is lower than market expectation and forms a case for credit easing and for holding interest rates.” In Shanghai, Agricultural Bank of China Ltd. rose 0.8 percent to 2.70 yuan on its first day of trading. China’s largest lender by customers rose from the IPO price of 2.68 yuan after raising $19.2 billion in the world’s biggest initial public offering in four years. Intoll Group, an Australian toll-road operator, jumped 31 percent to A$1.46 in Sydney, the biggest gain on the MSCI Asia Pacific Index, after Canada Pension Plan Investment Board offered A$3.47 billion ($3.1 billion) for the Macquarie Group Ltd.-backed company. To contact the reporters on this story: Shani Raja in Sydney on sraja4@bloomberg.net; Akiko Ikeda in Tokyo at iakiko@bloomberg.net.

Source