Asian stocks fell, extending the biggest global share slump in two months, while the yen gained as anti-government protests in Egypt curbed demand for emerging- market assets and earnings reports disappointed investors. The MSCI Asia Pacific Index sank 1 percent to 136.34 as of 3:40 p.m. in Tokyo. Dubai’s DFM General Index rebounded from the biggest drop in eight months, while Standard & Poor’s 500 Index futures rose after the gauge’s worst decline since August. Treasuries fell, sending yields on 10-year debt higher for the first time in three days. The yen strengthened against 15 of its 16 most actively traded counterparts. Copper rose as much as 1.8 percent in London, headed for a seventh monthly gain. Investor confidence receded after tens of thousands of protesters defied a curfew in Cairo and Egyptian President Hosni Mubarak met yesterday with military commanders. Earnings concerns also weighed on sentiment after Fujitsu Ltd., Japan’s biggest provider of computer services, cut its profit forecast. Markets are stabilizing after more than $500 billion was erased from the value of global stocks on Jan. 28. “The demonstrations in Egypt are causing investors to avoid risk assets,” said Kenji Sekiguchi, Tokyo-based general manager covering equity and debt in the strategic investment and research division of Mitsubishi UFJ Asset Management Co., which manages $75 billion. “We cannot ignore the possibility that the chaos will spill over from Egypt into oil-producing nations.” GS Engineering, Elpida About four shares declined for each that advanced on MSCI’s Asian index. Japan’s Nikkei 225 Stock Average decreased 1.2 percent, the Jakarta Composite Index dropped 2.3 percent and South Korea’s Kospi index lost 1.8 percent. China’s Shanghai Composite Index gained 1.3 percent, the only gain among the region’s 10 largest markets. GS Engineering & Construction Corp., which obtained 22 percent of its revenue from the Middle East in last year’s first quarter, slumped 7 percent, leading declines among Korean builders, on concern the Egyptian protests may hurt orders in the region. Fujitsu plunged 6.2 percent after the company reduced its net income forecast for the year through March by 21 percent to 75 billion yen ($914 million), saying corporate customers are holding back spending. Elpida Memory Inc. retreated 3 percent after the Nikkei newspaper reported that the world’s third- largest maker of computer-memory chips will post a third-quarter operating loss of about 20 billion yen because of falling prices of dynamic random access memory chips. Exxon’s Earnings The MSCI World Index slipped 0.1 percent, following a 1.4 percent drop on Jan. 28. The S&P 500 sank 1.8 percent on Jan. 28 on the Egyptian unrest and as declines in Ford Motor Co. and Amazon.com Inc. overshadowed a Commerce Department report that showed U.S. economic growth accelerated to 3.2 percent in the fourth quarter. Exxon Mobil Corp., the world’s largest company, is among U.S. firms set to report quarterly earnings today. Per-share profits have topped analysts’ estimates at 74 percent of the 183 S&P 500 companies that have reported results since Jan. 10, according to data compiled by Bloomberg. Middle East shares rose today. Dubai’s DFM General Index gained 1 percent after a 4.3 percent tumble yesterday that marked its biggest loss in eight months. Egypt’s banks and markets stayed shut as protestors demanded the resignation of Mubarak amid clashes that left as many as 150 people dead. The unrest was a sign that Mubarak’s appointment of the first vice president since his rise to power in 1981 and his naming of a new premier will not placate protesters. Default Risk Credit-default swaps on Egyptian government debt soared 54 basis points to 430 on Jan. 28, capping a weekly jump of 124 points, according to data provider CMA. The Arab world’s third- largest economy delayed two bond sales scheduled for yesterday amid the violence. Concern protests may spread made it more expensive to insure against defaults elsewhere in the Middle East, with contracts on the emirate of Dubai adding 33 basis points to 453 and those on Saudi Arabia climbing 35 to a 14-month high of 110, CMA data show. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan climbed five basis points to 115 basis points, Royal Bank of Scotland Group Plc prices show. The bond- risk gauge was set for its biggest increase since Nov. 26, according to CMA. Indicators for Japan and Australia also jumped, according to prices from Nomura Holdings Inc. and Citigroup Inc. Bond Yields The extra yield investors demand to own emerging-market debt instead of U.S. Treasuries increased 14 basis points today to a two-month high of 277 points, according to a JPMorgan Chase & Co. index that tracks the gap between rates on the securities. Treasuries fell, giving up an initial advance, on speculation a government report will show household purchases, which account for about 70 percent of the U.S. economy, grew at a faster pace in December, according to economists surveyed by Bloomberg. The yen gained 0.2 percent to 111.55 per euro and touched 111.28, the strongest level since Jan. 20. The Swiss franc advanced to 1.2813 per euro, having jumped 1.3 percent to 1.2821 on Jan. 28. The dollar traded little changed at $1.3611 per euro, after advancing to $1.3571, the highest level since Jan. 24. “The concerns are that we’re going to see contagion from Egypt spread to other parts of the Middle East,” said Mike Jones, a currency strategist at Bank of New Zealand Ltd. in Wellington. “As long as these concerns about Egyptian political tensions persist, flight-to-safety flows are likely to favor the dollar, yen and Swiss franc.” Won, Baht South Korea’s won dropped 0.7 percent to 1,121.30 per dollar, snapping a five-day gain, and Malaysia’s ringgit fell 0.2 percent to 3.0610. Thailand’s baht slid 0.2 percent to 31.12, earlier touching a four-month low of 31.21. The currency slumped 1.2 percent last week as nationalists protested in Bangkok to pressure the government over a border agreement with Cambodia. Oil for March delivery rose 0.5 percent to $89.77 a barrel and earlier rallied as high as $90.87 on the New York Mercantile Exchange, after climbing 4.3 percent on Jan. 28. Countries in the Middle East and northern Africa produced about 78 percent of the oil output from the Organization of Petroleum Exporting Countries this month, according to data compiled by Bloomberg. “The concerns in Egypt are playing on the commodity and financial markets,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. “The proximity to the Suez Canal and the possibility that there might be some constraints to supply is having an impact on the crude price.” Wheat climbed on speculation Egyptian importers were taking advantage of a two-day slump to meet domestic shortages. The March-delivery contract advanced as much as 1.3 percent to $8.3650 a bushel after dropping by 2.4 percent to $8.2575 on Jan. 28, the most in more than two months. To contact the reporters on this story: Shiyin Chen in Singapore at schen37@bloomberg.net; Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net. To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net

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