Asian Stocks Fall as China Raises Fuel Prices; Commodities Drop

Asian shares dropped after China raised gasoline and diesel prices by the most in two years. European equity futures fell and commodities retreated, while Treasuries snapped a nine-day slide.

The MSCI Asia Pacific Excluding Japan Index (MXAPJ) lost 0.5 percent as of 4:01 p.m. in Tokyo. Euro Stoxx 50 Index futures retreated 0.2 percent. The Shanghai Composite Index slid 1.3 percent, while Standard & Poor’s 500 Index futures were little changed. Treasury 10-year yields fell two basis points to 2.36 percent. The S&P GSCI commodity gauge declined 0.4 percent. Oil dropped 0.5 percent in New York.

Signs the U.S. economy is improving don’t dispel risks that include rising gasoline prices and a weakened housing market, Federal Reserve Bank of New York President William C. Dudley said yesterday. China’s refiners will charge 7 percent more for gasoline, according to data compiled by Bloomberg. Reports later today may show U.S. housing starts gained in February and U.K. inflation slowed for a fifth month, according to economists surveyed by Bloomberg.

“China, and whether the slowdown actually will happen and whether it will be a hard landing or a soft landing, is a big question mark on the downside,” Ali Naqvi, head of Asia equities for Credit Suisse Group AG, said in a Bloomberg Television interview from Hong Kong.

Chinese Shares Slide

The Hang Seng China Enterprises Index (HSCEI) of mainland companies listed in Hong Kong slid 0.8 percent, poised for the lowest close in two months. Profits for China’s state-owned companies fell 11 percent in the first two months this year, according to a statement posted on the finance ministry’s website. Revenue increased 9.9 percent.

All 10 industries in the MSCI gauge of Asian shares outside Japan declined. Australia’s S&P/ASX 200 Index fell 0.4 percent and South Korea’s Kospi Index retreated 0.2 percent. The BSE India Sensitive Index, or Sensex, added 0.4 percent. Japanese markets were closed for a holiday.

Sun Hung Kai Properties Ltd. (16), Hong Kong’s biggest developer by value, lost 1.9 percent after saying an executive director was arrested as part of an investigation into alleged bribery. Transurban Group (TCL), Australia’s biggest operator of toll roads, dropped 2.6 percent in Sydney trading after the company’s biggest shareholder sold a 7.9 percent stake at a discount.

Chinese consumer stocks retreated in Hong Kong trading. Great Wall Motor Co., a maker of sport-utility vehicles, slumped 5.6 percent. Belle International Holdings Ltd., China’s biggest shoe retailer, lost 1.5 percent.

Slowing Economy

Chinese Premier Wen Jiabao announced this month an economic growth target of 7.5 percent for 2012, down from an annual 8 percent over the past seven years. China’s steel production is slowing as the economy starts to shift to focus more on consumers than large infrastructure projects, Ian Ashby, BHP Billiton Ltd.’s president of iron ore, said today.

“Higher energy costs and falling profits may worry investors that the economy is slowing even further,” said Dai Ming, a fund manager at Shanghai Kingsun Investment Management & Consulting Co. in Shanghai.

Oil in New York dropped for the first time in three days. U.S. inventories climbed to the highest level in six months last week as processors idled units and imports from Canada increased, according to a Bloomberg News survey before a government report tomorrow.

Aussie Dollar

Australia’s dollar weakened against 15 of its 16 major peers. Malaysia’s ringgit led declines in Asian currencies, losing 0.3 percent to 3.0630 per dollar.

Corn dropped a second day after planting advanced in Texas and wheat slumped as rains improved crop prospects in the U.S., the world’s largest shipper of both grains. May delivery corn lost as much as 1.1 percent on the Chicago Board of Trade. Wheat for delivery in the same month declined 0.8 percent.