By Christian Schmollinger and Shani Raja Nov. 18 (Bloomberg) -- Crude oil gained for a third day as an industry report showed U.S. stockpiles declined after a hurricane in the Gulf of Mexico. Most Asian stocks fell as HSBC Holdings Plc’s chairman voiced concern about new capital rules. Oil rose as much as 0.9 percent to $79.85 a barrel in electronic trading on the New York Mercantile Exchange after the American Petroleum Institute said yesterday crude inventories fell by 4.37 million barrels last week to 333.1 million. The MSCI Asia Pacific Index was little changed at 118.29, down 0.3 percent, as HSBC, Europe’s largest lender, lost 1.6 percent in Hong Kong and property developer Tokyo Tatemono Co. sank 19 percent in on plans to sell shares. Oil has risen 79 percent this year on signs the global economy is recovering from its worst recession since World War II, stoking fuel demand amid output cuts by the Organization of Petroleum Exporting Countries. Growing demand for raw materials, led by China, have made stocks of commodity producers the biggest gainers this year in Asian markets. The MSCI Asia Pacific Index has advanced 33 percent as governments cut interest rates and boosted spending to rescue flagging economies. “Pursuing a low interest rate policy doesn’t make it favorable to hold dollars so buying commodities has been one of the strategies investors have been able to take,” Alan Plaugmann, head of futures at Saxo Bank A/S, said in a Bloomberg Television interview. “We’re seeing the rally in crude, the rally in equities and the rally in gold all highly correlated.” Energy producers in the U.S. idled about 43 percent of oil output in the Gulf of Mexico on Nov. 10 after Hurricane Ida made landfall, according to the Interior Department’s Minerals Management Service. An Energy Department report due today will probably show stockpiles of crude oil climbed 300,000 barrels, according to the 17 analysts who provided crude estimates. Gold Touches Record Gold for immediate delivery fell 0.3 percent to $1,137.45 an ounce at 12:29 p.m. in Singapore after touching a record $1,144.42 ounce in early trading. “Sentiment continues to be very upbeat,” said Stefan Graber, an analyst with Credit Suisse Group in Singapore. “We are likely to see more central banks stepping up gold purchases. Gold prices could extend their rally into yearend.” New rules to increase capital held by banks may have the effect of reducing credit in the economy, HSBC Chairman Stephen Green said yesterday. “There is once again a real danger that the cumulative impact of doctrinaire policy could have some perverse and unintended effects of the economy,” Green said at a conference in London. A “phased” introduction of rules coordinated across the Group of 20 nations is needed, he said. Stocks Drop HSBC’s decline helped drag the Hang Seng Index down as much as 1.2 percent, while Japan’s Topix Index sank 0.9 percent and the Nikkei 225 Stock Average fell 0.1 percent. Japan Airlines Corp., which is seeking a state bailout, fell to a record after a report that Japan’s transport minister wouldn’t rule out bankruptcy for the carrier. The gain in oil didn’t translate to Asian energy stocks, with PetroChina Co., the world’s second-most valuable company, reversing an earlier 0.8 percent gain to trade 0.6 percent lower at 12:29 p.m. in Hong Kong. China Shenhua Energy Co., the nation’s top coal producer, dropped 0.5 percent after earlier adding 1.1 percent in Hong Kong. South Korea’s Kospi stock index rose 0.7 percent to 1,597.2 as of 1:35 p.m. on the Korea Exchange, the most among Asian markets today. The Kospi has risen 42 percent this year, the worst performer among Asian emerging markets. Yuan Speculation Traders reduced bets on an appreciation in the yuan after U.S. President Barack Obama failed to win agreement that the exchange rate should be set by the market in meetings in Beijing. Twelve-month non-deliverable forwards for the yuan fell 0.1 percent to 6.6300 per dollar, bringing the three-day decline to 0.6 percent. Obama said yesterday he emphasized in talks with Chinese counterpart Hu Jintao the need for the rate, fixed at 6.83 per dollar since July 2008, to be set by the market. China’s vice foreign minister, He Yafei, told reporters that the currency’s stability has helped settle financial markets. The Australian and New Zealand dollars fell for a second day after U.S. industrial production growth slowed, discouraging demand for higher-yielding assets. Australia’s currency trimmed this month’s gain to 3.1 percent as traders pared bets that the Reserve Bank of Australia will raise borrowing costs at its next meeting. Yen Declines The yen retreated from near a two-week high versus the euro on speculation U.S. government reports will show housing starts rose and building permits gained last month, prompting investors to buy higher-yielding assets. The U.K. currency was near a two- month high against the euro before the Bank of England releases minutes of its Nov. 5 meeting where policy makers expanded their asset-buying program by 25 billion pounds ($42 billion) to 200 billion pounds. Japanese 20-year bonds are poised to fall amid speculation dealers will push up yields to secure the same coupon at a bond auction tomorrow as in the previous sale. Yields yesterday suggested the Ministry of Finance will set a 2.1 percent coupon on the 1.1 trillion yen ($12.3 billion) in 20-year bonds to be sold tomorrow. Demand for debt may also wane as technical charts signal that the drop in 10-year yields toward a one-month low of 1.3 percent was too rapid. To contact the reporters on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.net; Shani Raja in Sydney at sraja4@bloomberg.net.

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