Asian stocks fell for a third day after U.S. President Barack Obama said the government is “running out of time” in negotiating an agreement to cut the fiscal deficit, hurting the outlook for Asian exporters. Samsung Electronics Co., South Korea’s biggest exporter of consumer electronics, slipped 2.3 percent in Seoul. HTC Corp. (2498), a Taiwanese maker of smartphones, sank 4 percent after the U.S. International Trade Commission ruled it infringed on two patents of Apple Inc. News Corp. (NWSA) slumped 3.9 percent as the scandal over phone hacking at the now defunct News of the World widened with the arrest of editor Rebekah Brooks. The MSCI Asia Pacific Excluding Japan Index declined 0.4 percent to 473.93 as of 2 p.m. in Hong Kong, with four stocks falling for every three that rose. The measure dropped for the first week in four last week after European finance ministers declined to rule out a temporary default for Greece and as Moody’s Investors Service put the U.S. under review for a possible credit-rating downgrade. “Getting the debt ceiling question resolved” is crucial for stock markets in the region to gain traction, said Matt Riordan, who helps manage close to $7 billion in Sydney at Paradice Investment Management Pty. “There’s a lot of political posturing going on at the moment, and you’d hope that cool heads will prevail.” South Korea’s Kospi Index dropped 0.7 percent. Hong Kong’s Hang Seng Index was little changed after climbing 0.7 percent and falling 0.7 percent. China’s Shanghai Composite Index lost 0.1 percent. Australia’s S&P/ASX 200 Index added 0.1 percent after swinging between gains and losses at least six times. Japanese markets were closed for a public holiday. U.S. Futures Futures on the Standard & Poor’s 500 Index declined 0.4 percent today. The gauge rose 0.6 percent on July 15 in New York, trimming its weekly loss, even as concern that a political impasse over raising the federal debt limit is putting the nation’s top credit rating in jeopardy. House Speaker John Boehner, a Republican from Ohio, told reporters his party wouldn’t accept any tax increases as they work with the government on a deal to lower deficits. As negotiators near an Aug. 2 deadline for raising the $14.3 trillion U.S. debt ceiling, President Obama is pushing for a deal that will combine closing tax loopholes for the richest Americans and corporations with cuts to discretionary spending by government. A U.S. debt default would cause panic throughout the financial system and long-term uncertainty, former Treasury Secretary Larry Summers told CNN. “It seems to me an unthinkable financial risk to take,” Summers said in an interview on today’s “Fareed Zakaria GPS” program. It would cause “a cascade that makes Lehman Brothers look like a very small event.” Apple Patents Exporters to the U.S. declined. Samsung Electronics, which gets 22 percent of sales from America, slipped 2.3 percent to 813,000 won in Seoul. Hynix Semiconductor Inc. (000660), the world’s second-biggest maker of computer memory chips by sales, sank 4 percent to 23,050 won. Hon Hai Precision Industry Co., the world’s largest maker of electronics, slid 3.8 percent to NT$88.7 in Taipei. HTC dropped 4 percent to NT$871. The U.S. ITC ruled on July 16 that the company infringed two of 10 Apple patents originally asserted in a case. Asia’s second-biggest maker of smartphones said it will appeal the ruling, which may result in the ban on some HTC phones that run on Google Inc.’s Android operating system. Semiconductor Manufacturing International Corp. (981), China’s biggest chipmaker, slumped 9.5 percent to 57 Hong Kong cents. The company said David Wang, who failed to win reappointment as SMIC director at a shareholders meeting last month, resigned as chief executive officer. Zhang Wenyi, a former Chinese government minister, was appointed acting CEO at the Shanghai- based chipmaker. Citic Pacific Ltd. (267), the Hong Kong-based real estate developer and steelmaker, tumbled 8.6 percent to HK$16.82, the most on the regional benchmark index, after saying the development of its $2.6 billion iron ore mine in Australia may cost 35 percent more than expected and also be delayed. News Corp. Crisis In Sydney, News Corp. declined 3.9 percent to A$14.19. Chairman Rupert Murdoch is struggling to control the destiny of the company he began building six decades ago after Brooks, former editor News of the World and a trusted deputy was arrested, and Scotland Yard’s top official quit over ties to a suspect in the phone-hacking probe. Independent directors of the New York-based company have begun questioning the company’s response to the crisis and whether a leadership change is needed, said two people with direct knowledge of the situation who wouldn’t speak publicly. Santos Ltd., Australia’s third-largest oil and gas producer, decreased 4.1 percent to A$12.69 after agreeing to buy the shares it doesn’t own in Eastern Star Gas Ltd. for about A$730 million ($774 million) to own the biggest gas reserves in New South Wales. Eastern Star surged 41 percent to 83.7 Australian cents. The MSCI Asia Pacific Excluding Japan Index lost 0.6 percent this year through July 15, compared with a gain of 4.7 percent by the S&P 500 and a drop of 3.2 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark were valued at 12.2 times estimated earnings on average, compared with 13.2 times for the S&P 500 and 10.7 times for the Stoxx 600. 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: Nick Gentle at ngentle2@bloomberg.net.

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