June 30 (Bloomberg) -- Asian stocks dropped for the first time in three weeks on concern a U.S. housing slump will curb growth in the region's biggest export market. Samsung Electronics Co. and James Hardie Industries NV led the slide.
``Markets seem unable to push higher as we get more news every day about the U.S. economy, particularly the housing troubles there,'' said Hans Kunnen, who helps manage $107 billion at Colonial First State Global Asset Management in Sydney.
The Morgan Stanley Capital International Asia-Pacific Index lost 0.4 percent in the past five days to 152.90, after climbing to a record in the previous week. Benchmarks in Pakistan, Taiwan, Thailand, and India were the only ones to rise in the region. The Nikkei 225 Stock Average lost 0.3 percent and the broader Topix index slid 0.2 percent.
China's CSI 300 Index fell 7.1 percent this week, the worst performer among 89 major indexes tracked by Bloomberg, on concern the government will implement measures to cool the world's fastest-growing major economy. China's central bank governor Zhou Xiaochuan said the country's shares may be overvalued and interest-rate increases couldn't be ruled out.
Taiwan's Taiex index rose for the seventh week. JPMorgan Chase & Co. raised its 2007 estimate for the measure, citing the potential for increased liquidity and a possible rally ahead of Taiwan's 2008 presidential election.
Housing Woes
A U.S. report showed purchases of previously owned homes declined 0.3 percent in May, while the supply of unsold houses jumped to a record, the National Association of Realtors said this week. Purchases of new homes dropped in May, a report by the Commerce Department showed, while an index of consumer confidence fell this month to the lowest since August.
``We had news the past few days suggesting the U.S. housing sector is coming back to haunt all markets,'' said Jason Teh, who helps manage about $4.3 billion at Investors Mutual Ltd. in Sydney. ``We stay away from all investments that are directly linked to that industry.''
Samsung, Asia's largest chipmaker, fell 4.2 percent, to 566,000 won. James Hardie, the No. 1 supplier of home siding in the U.S., slid 3.8 percent to A$8.72 in Australia. Hon Hai Precision Industry Co., whose customers include Apple Inc., dropped 1.7 percent, to NT$284.
``Stocks globally take a fall every time there's more bad news on U.S. housing-related or lending data because there's a threat that this may spill over into other parts of the economy,'' said Eric Betts, a strategist at Nomura Australia Ltd. in Sydney. ``This wouldn't be good for companies that depend on the U.S. consumer.''
Chinese Economy
Citic Securities Co., China's biggest publicly traded brokerage, lost 9.1 percent to 52.97 yuan.
China is worried its equity markets may be overvalued and is watching developments closely, Zhou told reporters in Basel, Switzerland, where he attended a meeting of central bankers at the weekend.
``We don't rule out further rate increases if necessary'' and inflation remains a concern, Zhou said.
``Zhou's remarks are damping sentiment in the market and as a result investors may be selling for fear of further'' policy initiatives, said Fan Dizhao, who helps manage about $1.8 billion at Guotai Asset Management Co. in Shanghai.
The China Financial Futures Exchange said on June 28 it will introduce futures based on the index, while the Ministry of Finance announced plans to raise 1.55 trillion yuan ($204 billion) selling bonds to fund the State Investment Co.
``Both these measures are bearish for the stock market as they tend to divert funds,'' said Wang Zheng, who manages the equivalent of $500 million at the asset management unit of Everbright Securities Co. in Shanghai.
Taiwan Target Raised
Taiwan's Taiex index target was raised to 9,000 from 8,600, Bernard Liu, head of Taiwan research at JPMorgan wrote in a note. JPMorgan recommends investors to be ``overweight'' on Taiwanese financial and material companies, while ``underweight'' on technology stocks, Liu wrote in the note dated June 29. Taiwan's Taiex climbed 9.1 percent in June, its biggest monthly advance since July 2003.
Taiwan Semiconductor Manufacturing Co., the world's biggest supplier of made-to-order chips, rose 2.8 percent to NT$70.90. Formosa Plastics Corp., the world's second-largest maker of polyvinyl chloride, or PVC, added 2.7 percent to NT$83.40.
Meanwhile, Hong Kong Exchanges & Clearing Ltd. rose 1.5 percent to HK$110.50 on expectations a surge in share trading will boost profit at the operator of the city's stock market.
An average HK$75 billion ($9.6 billion) worth of shares changed hands in the past month, compared with HK$29 billion of daily turnover in the same period a year earlier. Hong Kong Exchanges was the best performer of the 39-member Hang Seng Index during the period. The measure fell 1 percent this week.
Elsewhere, Takeda Pharmaceutical Co. advanced 1.3 percent to 7,960 yen after a study found the company's Actos drug may lower the risk of heart attack and death in diabetic patients with kidney disease.
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