Asian Stocks Drop for a Third Day, Led by Tokyu Land

Asian stocks fell, led by financial companies, after condominium builder Urban Corp. filed for bankruptcy and Merrill Lynch & Co. said the credit crisis isn't over. Commodity producers gained after oil and metal prices rose.

Tokyu Land Corp. plunged 5.3 percent after Japan's Urban said yesterday it filed for court protection with $2.35 billion in debt. Mitsubishi UFJ Financial Group Inc. dropped 2.3 percent after Merrill's chief strategist Richard Bernstein said investors are underestimating the size of the credit crisis. BHP Billiton Ltd., the world's largest mining company, surged 3.7 percent, pacing the biggest advance among Asian commodity producers since April 23.

``Japan's property market experienced its own mini-bubble,'' said Hideyuki Ookoshi, who helps oversee $365 million at Chiba- Gin Asset Management Co. ``But now the failures have started and there's still more bad news to come.''

The MSCI Asia Pacific Index lost 0.3 percent to 125.85 as of 10:45 a.m. in Tokyo, a third day of declines and set for the lowest close since September 2006. The gauge has slumped 20 percent this year as inflation accelerated, growth slowed and global financial companies posted writedowns and credit losses of more than $500 billion.

Japan's Nikkei 225 Stock Average dropped 0.2 percent to 13,057.30. Australia's S&P/ASX 200 Index added 1.5 percent. David Jones Ltd. jumped in Sydney after the department-store operator's second-half earnings rose more than forecast.

Chain-Store Sales

U.S. stocks fell for a second day yesterday after earnings from Deere & Co., the largest maker of tractors, disappointed investors and the Commerce Department reported the first decrease in chain-store sales in five months.

Tokyu Land lost 5.3 percent to 463 yen, on course for its lowest close since May 2005. NTT Urban Development Co. slumped 6.1 percent to 144,200 yen, the second-biggest decline on MSCI's Asian index.

Urban, Japan's worst-performing real-estate stock this year, said yesterday it sought protection from creditors, following filings by builders Zephyr Co. and Kyoei Sangyo Co. last month. Real-estate companies in Japan face difficulties in procuring funds to buy new properties and refinance existing ones as banks curtail lending.

Urban's filing prompted Hiroshima Bank Ltd., a lender based in southwestern Japan, to reduce its net income forecast yesterday by 54 percent for the first half ending Sept. 30 because it may be unable to collect loans from the company. The stock fell 2 percent to 400 yen, poised for the lowest since March 2004.

Banks Slump

Mitsubishi UFJ, Japan's biggest publicly traded bank, declined 2.3 percent to 822 yen. Mizuho Financial Group Inc., the third-largest, slipped 1.5 percent to 462,000 yen.

Merrill's Bernstein said yesterday buying bank shares is risky as ``the problems in the financial sector appear to us to be far from over.'' The credit crisis is not limited to U.S. banks with subprime loan-related securities, he added in a note to clients.

BHP jumped 3.7 percent to A$38.13. Rio Tinto Group, the third-biggest mining company, added 4.2 percent to A$116.30. Mitsubishi Corp., Japan's No. 1 trading company, rallied 3.4 percent to 2,915 yen.

A measure of six metals traded on the London Metal Exchange rose 3.2 percent, its largest gain since March 27. Crude oil for September delivery advanced 2.7 percent to $116 a barrel, the largest gain since July 30, and futures climbed as much as 0.7 percent to $116.86 today.

Oil Explorers

Santos Ltd., Australia's third-largest oil and gas explorer, jumped 4.1 percent to A$17.69. Woodside Petroleum Ltd., the nation's second-biggest, gained 3.9 percent to A$54.13. Inpex Holdings Inc., Japan's No. 1 explorer, added 2.5 percent to 1.098 million yen.

Measures tracking energy and material companies on MSCI's Asian index have dropped 9.1 percent and 12 percent respectively in the past month, the worst performances among the broader measure's 10 industry groups.

The rally in commodity prices coincided with a rebound in the Baltic Dry Index, which tracks transport costs of raw commodities on international trade routes. The gauge gained 1.5 percent yesterday, ending a 23-day, 25 percent slump.

``Global growth may have slowed, but it hasn't stopped, which is why people are looking to pick up oversold commodities shares and shippers on their longer-term outlook,'' Chiba-Gin Asset Management's Ookoshi said.

Marine Transport

Nippon Yusen K.K., Japan's biggest shipping line, added 3.3 percent to 888 yen. Mitsui O.S.K. Lines Ltd., the second-largest, advanced 3.8 percent to 1,282 yen. STX Pan Ocean Co., South Korea's largest bulk carrier, surged 5.7 percent to S$2.40 in Singapore trading.

David Jones, Australia's No. 2 department store chain, surged 8 percent to A$3.94, the most since March 6, after saying second-half earnings rose as much as 25 percent. The Sydney-based retailer had previously forecast earnings growth of between 8 percent and 13 percent.

Korean Air Lines Co., South Korea's biggest carrier, declined 2.4 percent to 44,350 won, its third straight decline. The company said its second-quarter loss widened to 288.9 billion won ($278 million) from 214.4 billion won a year earlier because of record jet-fuel prices and a weaker won.