By Shani Raja March 4 (Bloomberg) -- Asian stocks fell for the first time in five days as China’s Industrial Bank Co. predicted slower growth in new lending and a stronger yen weighed on Japanese companies reliant on overseas profits. Industrial Bank, backed by a unit of HSBC Holdings Plc, dropped 1.8 percent in Shanghai. China Mobile Ltd. fell 2.3 percent in Hong Kong on concern it’s deviating from its main business by considering an investment in a Chinese bank. Mitsubishi Motors Corp. slumped 11 percent in Tokyo after the carmaker and Paris-based PSA Peugeot Citroen said they won’t form an alliance. The MSCI Asia Pacific Index dropped 0.6 percent to 120.18 as of 3:37 p.m. in Tokyo, after a four-day, 3.3 percent climb. It swung between gains and losses at least eight times. The gauge has fallen 5.2 percent from a 17-month high on Jan. 15 on concern about budget deficits in Europe and speculation governments around the world will start withdrawing stimulus. “There are a few macro concerns still lingering in the short term, and beyond that who knows how sustainable the recovery will be?” said Prasad Patkar, who helps manage about $1.6 billion at Platypus Asset Management in Sydney. “There’s no real impetus for investors to storm back into the market.” China’s Shanghai Composite Index declined 2.1 percent, while Hong Kong’s Hang Seng Index slumped 1.1 percent. South Korea’s Kospi Index lost 0.3 percent. Japan’s Nikkei 225 Stock Average sank 1.1 percent. China Loan Growth Futures on the U.S. Standard & Poor’s 500 Index dropped 0.4 percent. The gauge rose less than 0.1 percent yesterday as reports signaling improvement in the job market and service industries overshadowed concern legislation will hurt earnings at banks and health companies. Industrial Bank sank 1.8 percent to 35.01 yuan. The lender, which is planning to raise $2.6 billion to boost its capital, forecast growth in outstanding loans will almost halve this year as the government orders a retreat from 2009’s record expansion. China Mobile slumped 2.3 percent to HK$72.90 in Hong Kong. Chairman Wang Jianzhou said the company may invest in Shanghai Pudong Development Bank Co. to build its electronic commerce business and lift earnings as mounting competition erodes profit. “This could set a dangerous precedent with international investors rethinking their investments” in other publicly traded Chinese state-owned enterprises, Paul Wuh, a Hong Kong-based analyst at Samsung Securities Co., wrote in a report today. “An investment in the financial sector is outside of the company’s core competency.” Yen Appreciation Japanese exporters fell as a stronger yen threatened to reduce the value of overseas income when converted into their home currency. Toyota Motor Corp. lost 1.3 percent to 3,375 yen. Bridgestone Corp., the world’s largest tiremaker by sales, dropped 1.6 percent to 1,515 yen. The yen appreciated to as much as 88.32 per dollar in New York, the highest level since Dec. 14, from 88.87 at the 3 p.m. close of stock trading in Tokyo yesterday. Japan’s currency was recently at 88.24 per dollar. Mitsubishi Motors slumped 11 percent to 118 yen. The company and Peugeot, Europe’s second-biggest carmaker, said yesterday they ended talks about Peugeot buying a stake in Mitsubishi. A tie-up with Peugeot would have boosted Mitsubishi’s capital. “Given that Japan is a shrinking market, without overseas expansion there’s no way Mitsubishi can survive,” said Mitsuo Shimizu, an analyst at Cosmo Securities Co. in Tokyo. “Without capital coming in, it may be difficult to accomplish that.” Commodity Producers BHP Billiton Ltd., the world’s biggest mining company, advanced 1.5 percent to A$42.28 after oil futures settled at the highest level since Jan. 11 yesterday in New York, while a gauge of six metals traded on the London Metal Exchange rose 1.7 percent. Mincor Resources NL, an Australian nickel producer that supplies BHP, surged 2.1 percent to A$1.675. Newcrest Mining Ltd., Australia’s biggest gold producer, gained 1.7 percent to A$33.50 as gold climbed to a six-week high in New York. Lihir Gold Ltd. rose 1 percent to A$2.94. Mining companies also rose on speculation the global recovery will bolster commodities demand. U.S. companies last month cut the fewest jobs in two years, ADP Employer Services said yesterday. The Institute for Supply Management’s index of non-manufacturing businesses, which make up almost 90 percent of the economy, rose more than economists estimated. “So far, the U.S. recovery has been driven mainly by manufacturing, so the improvement in the non-manufacturing sector is bolstering investor confidence,” said Mitsushige Akino, who oversees about $450 million at Tokyo-based Ichiyoshi Investment Management Co. Government Spending In Hong Kong, Li & Fung Ltd., a trading company that gets 61 percent of its sales from the Americas, increased 1.1 percent to HK$38.35. Westfield Group, which operates shopping malls in North America, advanced 1.5 percent to A$12.23 in Sydney. The MSCI Asia Pacific Index has surged 70 percent from a five-year low on March 9, 2009 as more than $2 trillion of government spending helped drag the world economy out of its worst slowdown since World War II. Companies on the MSCI gauge are valued at an average 18.3 times estimated profit. That compares with 14.3 times for the S&P 500 and 12.7 times for the Stoxx Europe 600 Index. STX Pan Ocean Co., South Korea’s biggest bulk carrier, jumped 2.5 percent to 12,100 won after the Baltic Dry Index, a measure of shipping rates for commodities, surged 4.3 percent, the most since Jan. 4. Kawasaki Kisen Kaisha Ltd., a Japanese shipping line, rose 1.9 percent to 327 yen. --With assistance from Masaki Kondo and Toshiro Hasegawa in Tokyo. Editors: Darren Boey, Nick Gentle. To contact the reporter for this story: Shani Raja in Sydney at sraja4@bloomberg.net. To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net. Related Articles

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