(Bloomberg, Sep 20, 2006) -- Asian stocks dropped after the Thai military seized power in a coup and U.S. housing construction fell to a three-year low. Nissan Motor Co., which closed two factories in Thailand today, and Rinker Group Ltd. led declines.

``There will be some selling across the region today. Investors don't like the uncertainty an event like'' the Thai coup creates, said Tom Murphy, who oversees about $1 billion in Asian assets at Deutsche Bank AG in Sydney. ``The momentum is definitely against any stock related to the U.S. housing market at the moment, and it's not likely to be an attractive place to invest for some time.''

The Morgan Stanley Capital International Asia Pacific Index dropped 1.2 percent to 126.48 at 10:14 a.m. in Tokyo, snapping a two-day, 0.7 percent rally. All 10 industry groups on the measure declined.

Japan's Nikkei 225 Stock Average declined 1 percent to 15,721.50, while the Topix index lost 1.2 percent. Indexes elsewhere in the region also slid. Thailand's stock market was ordered to close today by the military in the wake of the coup.

Stocks in the U.S. retreated, with the Nasdaq Composite Index snapping its longest winning streak in eight months. Shares of technology companies also declined after Yahoo! Inc., the most-visited U.S. Web site, said advertising growth was slowing.

Thai Coup

Nissan, Japan's second-largest automaker, lost 1.4 percent to 1,300 yen. The company closed its two factories in Thailand today, following ``advice'' by the Thai government in the wake of a coup, according to spokeswoman Mihoko Takeda.

Thailand's military leaders, calling themselves the Political Reform Council, seized power overnight and said it was in control of the Southeast Asian nation of 65 million and declared allegiance to King Bhumibol Adulyadej, according to statements read on state television. Army Chief Sondhi Boonyarataklin temporarily assumed the duties of prime minister.

The Stock Exchange of Thailand, government departments and Thai banks were ordered to close today in the wake of a coup, military leaders said in a statement broadcast on Thai television. The Thai baht fell 0.1 percent to 37.80 per dollar at 6:35 a.m. in Bangkok, after yesterday dropping 1.3 percent in New York, the biggest decline since July 2002.

Thai Beverage Pcl, the nation's largest brewer and distiller, tumbled 5.2 percent to 27.5 Singapore cents. Singapore Telecommunications Ltd., Southeast Asia's largest phone company, lost 1.7 percent to S$2.38. The company owns about a fifth of Advanced Info Services Pcl, Thailand's biggest mobile-phone operator.

Honda, Rinker

Honda Motor Co., Japan's No. 3 automaker, lost 2.1 percent to 3,780 yen. The company had 55 percent of its sales in North America in the year ended March 31. Rinker Group Ltd., the biggest supplier of cement blocks in the U.S., fell 2.4 percent to A$12.43 in Australia.

Housing starts in the U.S. plunged 6 percent last month to an annual rate of 1.665 million, the Commerce Department said. Economists expected starts to fall to an annual rate of 1.746 million, based on the median of forecasts in a Bloomberg survey. Meanwhile, prices paid to U.S. producers excluding food and energy declined 0.4 percent from July, a report said, marking the first back-to-back monthly drop since the end of 2002.

The figures raised concern that corporate profit growth will slow, supplanting confidence the U.S. Federal Reserve will keep interest rates at 5.25 percent at its second straight meeting later today after raising them for two years.

``Today's declines reflect the fact that investors haven't fully discounted the possibility of a sustained slowdown in the U.S. economy,'' said Takeshi Yamaguchi, who looks after $674 million at Sumitomo Mitsui Asset Management Co. in Tokyo.

Samsung

Samsung Electronics Co., South Korea's biggest exporter, fell 1 percent to 665,000 won. Taiwan Semiconductor Manufacturing Co., the world's biggest supplier of made-to-order computer chips, retreated 0.8 percent to NT$60.

Yahoo Japan Corp., the nation's most-visited Web site, lost 3 percent to 40,200 yen. Rakuten Inc., Japan's biggest online retailer, slumped 5.9 percent to 46,900 yen.

Shares of Yahoo tumbled 11 percent in the U.S., after the Chief Financial Officer Susan Decker said profit and sales this quarter will be at the low end of its forecast because of slower advertising demand in some industries.

Source:Bloomberg
tag:economy