Asian stocks fell, led by chipmakers and electronics companies, after Tokyo Electron Ltd. said chip equipment orders declined last quarter and LG.Philips LCD Co. reported a larger-than-expected drop in profit. Samsung Electronics Co. led declines by companies due to report quarterly earnings this month on concern they will predict slower demand as record oil prices curb global economic growth and consumer spending.
``I'd expect more bad news coming from the technology'' industry, said Yoji Takeda, who helps manage $250 million as head of Japanese equities at RBC Investment Management (Asia) Ltd. in Hong Kong. ``I'd be careful of holding these stocks.'' Morgan Stanley Capital International's Asia-Pacific Index, which tracks more than 900 companies, lost 1.2 percent to 91.41 at 2:10 p.m. in Tokyo. The index of computer-related shares slumped 2.2 percent, making it the worst performing industry group among the 10 in the regional benchmark. Samsung Electronics will release earnings Oct. 15, while many Asian electronics companies such as NEC Electronics Inc. and AU Optronics Corp. report later this month. Intel Corp., the world's biggest chipmaker, in September cut its sales and profit margins forecasts. The U.S. company reports today. ``The biggest focus now is the technology earnings such as Intel,'' said Akio Yoshino, who helps manage the equivalent of $15 billion in assets at SG Yamaichi Asset Management Co. in Tokyo. ``Inventories will continue to rise more than expected and that could weigh on earnings.''
Oil Concerns
Japan's Nikkei 225 Stock Average lost 1.1 percent to 11,227.09, set for its biggest drop in two months. The broader Topix declined 1 percent to 1128.98. Japanese markets were closed yesterday for a holiday. In South Korea, the Kospi index sank 2.2 percent, the region's biggest drop, followed by the 2 percent slump in the Philippine Stock Exchange Composite Index. The Philippine government said economic growth probably slowed in the third quarter as rising prices trimmed consumer spending. All stock benchmarks open for trading in the region fell, except for those in Australia and Sri Lanka.
The MSCI Asia-Pacific Technology Index was the worst performing industry group for a second quarter in the three months ended Sept. 30 on concern that demand for semiconductors and computers may falter as global growth slows on the back of record-high oil prices. Crude oil futures traded near a record in New York on concern supply from the Gulf of Mexico will be reduced while hurricane damage gets repaired during the next six months. Yesterday, November crude rose as high as $53.80 a barrel in New York, the highest intraday price since futures began trading in 1983. Prices have surged 65 percent this year.
Tokyo Electron
Tokyo Electron, the world's second-largest maker of semiconductor production equipment, declined 2.6 percent to 5,540 yen. The company said after the market closed on Oct. 8 that chip equipment orders tumbled 24 percent in the second quarter from the first as semiconductor makers curbed investment. Tokyo Electron is scheduled to report fiscal first-half and quarterly results next month. South Korea's LG.Philips, the world's second-largest maker of liquid-crystal displays, plunged 8.9 percent to 32,800 won, set for its biggest slide since its initial public offering in July. Third-quarter net income fell 15 percent to 291 billion won ($254 million) from a year ago, trailing the 339 billion won median estimate of analysts surveyed by Bloomberg.
`One to Avoid'
``Tech seems to me to be the one sector to avoid as a lot of companies will produce downward revisions,'' said Scott McGlashan, a London-based fund manager at J O Hambro Capital Management Ltd., which manages more than $2 billion in global assets. AU Optronics, Taiwan's largest maker of flat-panel displays used in computers and televisions, fell 3 percent to NT$42.30. Chi Mei Optoelectronics Corp., the second biggest, lost 1.9 percent to NT$41.50. Samsung Electronics, the world's second-largest chipmaker, dropped 3.4 percent to 450,500 won. Merrill Lynch & Co. said the company's third-quarter operating profit may be below the brokerage's estimate of 2.8 trillion won because of weak September sales at its liquid crystal display and mobile phone businesses. NEC Electronics, Japan's third-biggest chipmaker, slumped 5.6 percent to 5,880 yen. Earnings growth is slowing as prices of liquid crystal displays decline, said Masahiko Ishino, an analyst at Mitsubishi Securities Co. in Tokyo. The company said after the market closed on Oct. 8 that operating profit, or sales minus the cost of goods sold and administrative expenses, rose 21 percent for the six months ended Sept. 30. In the April to June quarter, the company had a 27 percent increase in operating profit.
Intel's Customers
Santa Clara, California-based Intel will probably say profit was 27 cents a share, the average estimate of 32 analysts polled by Thompson. In Singapore, STATS ChipPAC Ltd., which provides chip- testing and packaging services to Intel, dropped 1 percent to S$1.03. Hynix Semiconductor Inc., the world's second-largest maker of computer memory chips after Samsung, slid 5.6 percent to 13,600 won. Hynix also makes memory chips that work alongside Intel's processors. Philippine Long Distance Telephone, the nation's largest phone company, slipped 2 percent to 1,450 pesos, leading the nation's benchmark. Gross domestic product in the Philippines probably rose 5.5 percent to 5.9 percent from a year earlier, less than the second- quarter's 6.2 percent, Economic Planning Secretary Romulo Neri said yesterday after the market closed. ///www.bloomberg.com