Most Asian stocks fell, led by commodity companies, as metals prices declined amid concern the global economic recovery will fall short of investors’ expectations. Mitsubishi Corp., which generates about half its revenue from trading commodities, sank 3 percent in Tokyo, while Fortescue Metals Group Ltd. slumped 3.9 percent in Sydney. Everbright Securities Co. soared 30 percent on its first trading day in Shanghai. James Hardie Industries NV, the biggest seller of home siding in the U.S., surged 22 percent after forecasting profit at the high end of analyst estimates. The MSCI Asia Pacific Index dropped 0.2 percent to 110.42 as of 5:11 p.m. in Tokyo, extending yesterday’s 3.1 percent slump. About five stocks fell for every four that advanced. The gauge’s two-day decline has pared its rally from a more than five-year low on March 9 to 56 percent. “Pullbacks are to be expected, but my feeling is that they’ll be relatively shallow,” said Prasad Patkar, who helps manage about $1.2 billion at Platypus Asset Management in Sydney. “Valuations looked stretched, but as long as earnings keep going up, they will start to look more normal as time goes by.” Japan’s Nikkei 225 Stock Average added 0.2 percent. Hong Kong’s Hang Seng Index advanced 0.8 percent. The Shanghai Composite Index rallied 1.4 percent following a 5.8 percent slump yesterday. The gauge has lost 16 percent from its peak this year on Aug. 4. Markets are typically deemed to have entered a bear market when declines exceed 20 percent. -----------Equity Declines Citic Securities Co. sank 4.1 percent in Shanghai as Andy Xie, Morgan Stanley’s former chief Asian economist, predicted further equity declines. Air China Ltd. lost 2.4 percent on concern it may have paid too much to raise its stake in Hong Kong’s Cathay Pacific Airways Ltd. Futures on the Standard & Poor’s 500 Index climbed 0.5 percent. The stock gauge fell 2.4 percent yesterday, extending a global stock slump after figures on Japan’s economic growth trailed some economists’ estimates and foreign direct investment in China dropped for a 10th month. The MSCI World Index was up 0.3 percent today after sinking 2.8 percent yesterday on concern the global recovery may be stalling. Reports last week showed Chinese exports dropped in July, lending fell, and investment growth slowed, while Australia’s statistics bureau said wage growth stalled last quarter as the worst global slump since the Great Depression drove up unemployment. ---------------Metal Prices Mitsubishi fell 3 percent to 1,865 yen. Mitsui & Co., a trading house that generates more than half its profit from metals and energy, lost 0.7 percent to 1,232. Fortescue slumped 3.9 percent to A$4.40, following a 10 percent advance in the four previous trading days. A measure of six metals, including copper and zinc, traded on the London Metal Exchange fell 2.7 percent yesterday to the lowest level in a week. Copper futures in New York dropped 2.3 percent, while oil sank 1.1 percent. Asian plantation stocks declined after palm oil for November delivery fell 4.2 percent in Kuala Lumpur yesterday, the biggest drop since Aug. 7. Futures rose 1.5 percent today. PT Astra Agro Lestari, Indonesia’s largest publicly traded plantation firm, lost 3.9 to 22,100 rupiah in Jakarta. IOI Corp., Malaysia’s second largest, dropped 2.1 percent to 5.09 ringgit in Kuala Lumpur. ---------------‘On The Mend’ The MSCI Asia Pacific Index rallied 62 percent through Aug. 14 from its March 9 low on speculation a global economic recovery will boost earnings. Companies in the gauge trade at 1.57 times book value, compared with 1.03 times at the March low. The benchmark has averaged about 1.7 times book value since 2001. “We were due for a correction, but the overall rising trend for the market remains as earnings and the economy are on the mend,” said Yoshinori Nagano, a senior strategist at Tokyo- based Daiwa Asset Management Co., which oversees the equivalent of $89 billion. A third of the 503 companies in the MSCI Asia Pacific Index that have reported results since early July have beaten analysts’ profit estimates, while 18 percent have missed, according to data compiled by Bloomberg. James Hardie, which reported a first-quarter loss on declining earnings from the U.S., surged 22 percent to A$7.07. The company said it expects full-year operating profit at the high end of analysts’ forecasts, excluding costs relating to asbestos claims, and that the U.S. housing slump may be easing. Casio Computer Co. gained 7.1 percent to 798 yen in Tokyo after Credit Suisse upgraded the stock to “outperform” from “underperform” amid optimism the company will restore profits in money-losing businesses. ---------------Chinese Brokerages In Shanghai, Citic Securities fell 4.1 percent to 29.78 yuan on concern a tumbling market will hurt their equity investments. Haitong Securities Co. slumped 3.9 percent to 15.46 yuan. Xie, now an independent economist, predicted the Shanghai Composite Index, the world’s worst performer this month, may drop by another 10 percent. He correctly predicted in April 2007 that China’s equities would tumble. “The current correction is reflecting the tightening in lending,” said Xie. “We’ve seen the peak of this market cycle, though there’s likely to be a bounce as the government seeks to stabilize the market.” Everbright Securities, the first Chinese brokerage to make an initial public offering in almost seven years, soared 30 percent to 27.40 yuan. The company raised 11 billion yuan ($1.6 billion) by selling shares to institutional and retail investors. Air China, the world’s biggest airline by market value, sank 2.4 percent to 7.66 yuan. The company said it will spend HK$6.3 billion ($813 million) raising its stake in Cathay Pacific to 29.99 percent. Cathay rose 1.4 percent to HK$11.78. -----------Strategic Control “Further alignment with Cathay will enhance Air China’s strategic control of China’s most important international gateways -- Beijing and Hong Kong,” said Ally Ma, an analyst at Citigroup Inc. Still, the price “seems too high and disappoints our positive view on Air China.” Yue Yuen Industrial (Holdings) Ltd., the world’s largest supplier of branded athletic shoes, dropped 6.3 percent to HK$20.75 in Hong Kong after UBS AG recommended investors sell the stock on a likely drop in orders. It cut the company’s rating to “sell” from “neutral,” while maintaining its share-price target. (Source: Bloomberg)