(Bloomberg, Oct 19, 2006)--Asian stocks fell for a third day, led by semiconductor shares after Advanced Micro Devices Inc. slashed prices.

``There's a mixed view over the outlook for semiconductor makers and some bad news prompted some investors to get out of the stocks,'' said Hiroshi Chano, who helps oversee $7.3 billion at Yasuda Asset Management Co. in Tokyo. ``The stocks are not so cheap relative to their profit levels.''

Advantest Corp., the world's biggest maker of memory-chip testing equipment, and Taiwan Semiconductor Manufacturing Co. fell. Coles Myer Ltd. slumped after the retailer rejected a takeover bid.

The Morgan Stanley Capital International Asia-Pacific Index lost 0.1 percent to 130.68 as of 4:08 p.m. in Tokyo, taking its three-day drop to 0.4 percent. Japan's Nikkei 225 Stock Average slid 0.6 percent. Benchmarks also fell in Australia, Taiwan, China, Hong Kong and India. South Korea was little changed.

Stocks in China gained after a government report showed growth in Asia's second-largest economy slowed, suggesting measures to curb investment are working. China Petroleum & Chemical Corp. led the advance.

Advantest dropped 4.4 percent to 6,070 yen. Chartered Semiconductor Manufacturing Ltd., which supplies chips to Advanced Micro, lost 0.8 percent to S$1.20. Tokyo Electron Ltd., the world's second-largest supplier of chipmaking equipment, fell 3 percent to 9,010 yen.

Earnings Reports

Advanced Micro, the second-largest maker of personal- computer processors, said third-quarter net income surged 77 percent from a year earlier. The company slashed desktop PC chip prices to compete with Intel Corp. Gross margin, the percentage of sales left after deducting the cost of production, was 51.4 percent, down from 56.8 percent in the preceding three months.

Veldhoven, Netherlands-based ASML, Europe's biggest supplier of chip-making equipment, said yesterday it expects to ship 69 machines in the fourth quarter, missing the median estimate of 76 shipments in a Bloomberg News analyst survey.

Taiwan Semiconductor, the world's biggest supplier of custom-made chips, slid 1.6 percent, to NT$61. United Microelectronics Corp., the second largest, fell 1.1 percent to NT$18.30.

Mizuho Financial Group Inc. led banks higher on expectations companies that do most of their business at home may report higher earnings. Mizuho, Japan's second-biggest lender by assets, advanced 0.9 percent to 914,000 yen. Nomura Holdings Inc., the country's largest broker, gained 0.2 percent to 2,160 yen.

China Stocks

KDDI Corp., Japan's second-largest wireless carrier, reports earnings tomorrow. Brokerages such as Nomura are set to report their half-year results next week.

``The market consensus is for higher-than-forecast first- half profits and continued trend of better earnings for the rest of this business year,'' said Junichi Misawa, who oversees $655 million in funds at STB Asset Management Co. in Tokyo.

In China, gross domestic product in the three months ended Sept. 30 increased 10.4 percent from a year earlier, compared with 11.3 percent in the second quarter, the statistics bureau said in Beijing today. It was the first slowdown in a year.

``A slowdown in economic growth means there won't be very severe measures to restrict expansion, such as interest rates increases,'' said Zhang Ling, who manages the equivalent of $2.4 billion at ICBC Credit Suisse Asset Management Co. in Beijing. ``That should be positive for the stock market.''

Coles Myer

China Petroleum, Asia's biggest oil refiner, gained 1.5 percent to 5.44 yuan. Maanshan Iron & Steel Co. China's largest Hong Kong-listed steelmaker, rose 1 percent to 2.87 yuan.

Meanwhile, Coles Myer Ltd., Australia's second-largest retailer, tumbled 9 percent to A$13.20. The company rejected an increased A$18.2 billion ($13.7 billion) takeover offer from a buyout group led by Kohlberg, Kravis Roberts & Co. Coles said the A$15.25 bid ``substantially undervalued'' the company and contains too many conditions.

``The market is showing that they think Coles is worth more in the hands of an acquirer than the current management,'' said Craig Young, who helps manage about $3 billion at Tyndall Investment Management in Sydney, including Coles Myer shares.

Source:Bloomberg
tag:Asia