Asian stocks fall as global commodities rout deepens

A businessman walks past a board showing the Nikkei 225 index and the yen-US dollar rate in Tokyo on July 13, 2015.
A businessman walks past a board showing the Nikkei 225 index and the yen-US dollar rate in Tokyo on July 13, 2015. PHOTO: AFP

SINGAPORE (BLOOMBERG) - Asian stocks fell, with the regional benchmark index extending its weekly decline, as the commodities rout deepened with oil entering a bear market.

The MSCI Asia Pacific Index fell 0.2 per cent to 143.38 as of 9:11 a.m. in Tokyo. The gauge is headed for a 0.9 per cent decline this week as global equities traced losses on commodity markets, where concern over supply gluts sent gold to industrial metals and oil tumbling. Adding to commodity investors' pain is the resurgent US dollar, with focus shifting to next week's Federal Reserve policy meeting amid buoyant economic data. US stocks fell for a third day as earnings results from 3M Co. and Caterpillar Inc. disappointed.

"With the US dollar likely to keep rising as the Fed prepares to raise rates, there's still some sort of weakness to come in the commodity space," said Angus Gluskie, managing director at White Funds Management Pty in Sydney, who oversees US$550 million.

"The earnings outlook in the U.S. is also somewhat subdued as a result of the strong US dollar. We're not likely to see a massive rally in the next few months."

Japan's Topix index slid 0.2 per cent and South Korea's Kospi index dropped 0.7 per cent. Australia's S&P/ASX 200 Index fell 0.4 per cent. New Zealand's NZX 50 Index slipped 0.1 per cent. Markets in China and Hong Kong have yet to open.

The Shanghai Composite Index rose for a sixth day on Thursday, climbing 2.4 per cent and sending the benchmark index to its longest stretch of gains since May, as unprecedented government intervention to support equities took root. The Hang Seng China Enterprises Index of mainland shares traded in Hong Kong advanced 0.9 per cent.

A gauge of Chinese manufacturing due Friday may confirm the sector contracted for a fifth straight month in July.

E-mini futures on the Standard & Poor's 500 Index gained 0.1 per cent. The U.S. equity benchmark index retreated 0.6 per cent on Thursday.

The earnings season has been spotty for US companies so far, with sluggish demand overseas damping returns for some multinational companies. Disappointing results from Apple and Microsoft earlier in the week sparked a selloff in technology shares.