By Will McSheehy Jan. 25 (Bloomberg) -- Asian stocks fell for a sixth day on concern about Barack Obama’s plan to curb U.S. banks. The dollar and yen weakened amid expectations Federal Reserve Chairman Ben. S. Bernanke will win a second term. The MSCI Asia Pacific Index lost 0.6 percent to 121.65 as of 2:25 p.m. in Tokyo. Japan’s Nikkei 225 Stock Average sank 0.4 percent while the yen dropped against all of its 16 most-traded counterparts. Futures on the U.S. Standard & Poor’s 500 Index climbed 0.5 percent and the dollar traded at $1.4161 per euro from $1.4139 on Friday. “Asian markets are correcting over concerns the trajectory of growth is insufficient to justify some valuations,” said Tim Schroeders, who helps manage $1.1 billion at Pengana Capital Ltd. in Melbourne. “The change to U.S. banking regulations will severely hamper the ability of many banks to meet forecast profit growth, particularly those banks with large proprietary trading and hedge fund exposures.” Investors in Asia reacted to Obama’s plan to limit the size and trading activities of financial institutions in a bid to reduce risk taking, calling into question stock valuations. The extra yield investors demand to own company bonds instead of government debt widened for the first time since the five days ended Nov. 27, based on Bank of America Merrill Lynch’s Global Broad Market Corporate Index. Bernanke Support Senate Republican leader Mitch McConnell said he expects Bernanke will win a second term, indicating enough Republicans will join Democrats in backing the central banker’s policies to spur recovery in the world’s biggest economy. Fed officials will keep interest rates near zero after their two-day meeting this week, economists forecast in a Bloomberg survey. Seven stocks fell for every two that rose on the MSCI Asia index. Most Chinese banks fell after Bank of China Ltd., the nation’s third-largest lender by market value, proposed to issue as much as 40 billion yuan ($5.86 billion) of bonds convertible into new shares to raise capital. JPMorgan Chase & Co. lowered its allocation for China’s banking stocks in its model portfolio, saying they may be hurt in the “short term” by fundraising activities and the possible sale of Industrial & Commercial Bank of China Ltd. shares by Goldman Sachs Group Inc. Bank of Communications Co. dropped 2.9 percent. Industrial & Commerical lost 0.8 percent “The size of Bank of China’s fundraising is huge,” Li Jun, a strategist at Central China Securities Holdings Co., said in Shanghai. “I’m afraid more big banks will follow suit in order to boost their capital adequacy ratio, which will be negative for the market.” Share Sale Woori Finance Holdings Co. fell 3.9 percent on concern South Korea may sell more stock. The government is preparing for another block sale of shares in the country’s third-biggest bank, four people familiar with the plan said last week. The yen fell to 127.64 per euro in Tokyo from 126.98 in New York on Jan 22. The dollar declined against higher-yielding currencies before a report today that economists said will show sales of existing U.S. homes fell in December, backing the case for the Fed to keep interest rates between zero and 0.25 percent. Copper for three-month delivery dropped 0.6 percent to $7,346.25 a metric ton on the London Metal Exchange after declining as much as 1 percent. Zinc gained 0.6 percent, snapping three days of losses. ‘Material Recovery’ Crude oil traded little changed near a one-month low as sliding equity markets and expectations of interest-rate increases in China dented investor confidence in the strength of the global economic recovery. Oil for March delivery earlier fell as much as 43 cents, or 0.6 percent, to $74.11 a barrel on the New York Mercantile Exchange, having traded at $74.54 a barrel on Jan. 22, the lowest settlement since Dec. 22. “We’ve seen a pretty significant turn in macro sentiment,” said Toby Hassall, a commodity analyst at CWA Global Markets Pty. in Sydney. Oil “was very much a forward- looking market last year pricing in a recovery. We’ve seen some encouraging signs, and the U.S. certainly is looking a lot better than it was 12 months ago, but that’s a different thing to a material recovery.” Bond risk climbed in Asia, according to traders of credit- default swaps. The Markit Asia index of 50 investment-grade borrowers outside Japan rose 4 basis points to 110.5 basis points at 9:03 a.m. in Singapore, Deutsche Bank AG prices show. The risk benchmark is at its highest since Dec. 1, according to CMA DataVision in New York, and is on course to climb for a sixth consecutive day, the longest stretch in more than 11 months. To contact the reporter for this story: Will McSheehy in Singapore at wmcsheehy@bloomberg.net

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