Nov. 20 (Bloomberg) -- Asian stocks fluctuated this week with oil companies dropping on concern China’s measures to slow inflation will damp demand, while Japanese carmakers rose as the yen weakened, boosting the earnings prospects for exporters. China Petroleum & Chemical Corp., the nation’s biggest refiner, dropped 5.7 percent in Hong Kong. China Vanke Co., the country’s biggest developer, fell 3.4 percent in Shanghai. Bank of China Ltd., the nation’s third-biggest lender, dropped percent 5.3 percent. Toyota Motor Corp., the world’s biggest automaker, rose 5.5 percent, while Sony Corp., the maker of Bravia televisions, jumped 7.5 percent as data showed the U.S. economic recovery is accelerating. “Investors are weighing up their options in a rapidly changing global macro-economic environment,” said Tim Schroeders, who helps manage about $1 billion at Pengana Capital Ltd. in Melbourne. “We may well be headed for another period of consolidation as investors move to lock-in gains against a backdrop of rising uncertainty in the near term.” The MSCI Asia Pacific Index declined 0.3 percent to 131.72 this week, following a 2 percent drop last week. Concern over how China will tackle the fastest inflation in two years triggered a global stock rout that wiped more than $1.7 trillion off global equities since the start of last week. Australia’s S&P/ASX 200 Index fell 1.4 percent. Hong Kong’s Hang Seng Index sank 2.6 percent. The Shanghai Composite Index tumbled 3.2 percent, the most among the region’s major benchmark indices, on speculation measures to curb inflation including price controls and higher interest rates may hurt earnings. Japan’s Nikkei 225 Stock Average advanced 3.1 percent as the yen dropped to a six-week low against the U.S. dollar, boosting the value of the nation’s overseas sales when converted into the local currency. Price Controls China may impose temporary price controls to counter the fastest inflation in two years, the government said on Nov. 17. Price caps on “important daily necessities” and production materials will be used if necessary, the State Council said on its website. The People’s Bank of China may raise borrowing costs as efforts to cool inflation with subsidies, sales of food reserves and price controls are likely to prove insufficient, said analysts surveyed by Bloomberg News. Concern that rising consumer prices, which surged the most in two years in October, will undermine the economy spurred Premier Wen Jiabao to hold a cabinet meeting on the issue this week. ‘Period of Consolidation’ The MSCI Asia Pacific Index gained on the last two days of the week, countering a loss of 1.7 percent earlier, after reports showed the economic recovery in the U.S. is accelerating and on speculation a bailout for Ireland will prevent a spread of the nation’s banking crisis. Irish Finance Minister Brian Lenihan said the government may accept aid from the EU and International Monetary Fund. Reports in the U.S. this week showed fewer workers than forecast filed for jobless benefits, and October sales at the nation’s retailers increased by most in seven months. The MSCI Asia Pacific Index has increased about 9.6 percent in 2010, compared with gains of 7.3 percent by the S&P 500 and 6.5 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at an average of about 14.6 times estimated earnings, compared with 14.1 times for the S&P 500 and 12.2 times for the Stoxx 600. --Editors: Sam Waite, Paul Tighe To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Shani Raja in Sydney at sraja4@bloomberg.net. To contact the editor responsible for this story: Nicolas Johnson at nicojohnson@bloomberg.net.

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