Asian stocks fell yesterday on concern rising oil prices may slow economic growth, hurting demand for products such as cameras, cars and computers. Canon Inc and Samsung Electronics Co led declines.

　　Singapore Airlines Ltd, Qantas Airways Ltd and Cathay Pacific Airways Ltd dropped as higher jet fuel costs squeeze the carriers' profits.

　　"Higher oil prices will eventually lead to higher costs for companies and it's inevitable that that's going to put pressure on earnings," said Nobuki Goto, who helps manage US$14 billion at Tokio Marine Asset Management Co in Tokyo. "What we need is further evidence of economic growth."

　　The Morgan Stanley Capital International Asia-Pacific Index, which tracks more than 800 companies in the region, lost 2.5 percent to 84.08 as of 5:22pm yesterday in Tokyo.

　　The benchmark has swung between gains and losses this week as some investors debated whether higher borrowing and energy costs would slow robust growth in the world's biggest economy.

　　The index had its biggest gain in 21 months on Wednesday, while on Monday it fell by the most since the day after the September 11 terrorist attacks in the United States.

　　Japan's Nikkei 225 Stock Average sank 3 percent to 10,825.10. The Topix Index slumped 2.4 percent to 1095.93, with automakers and computer-related shares accounting for almost a third of the slide.

　　Canon, the world's second-largest digital camera maker, shed 2.6 percent to 5,560 yen (US$48.65). Fujitsu Ltd, Japan's second-biggest telecommunications equipment maker, declined 5.7 percent to 714 yen.

　　Toyota Motor Corp, the world's biggest automaker by market value, lost 2 percent to 3,890 yen.

　　Japan wants stable supplies and needs to watch crude oil prices closely, said Hiroyuki Hosoda, Japan's chief government spokesman, adding that oil supply and demand are "tight."

　　All other stock indexes in the region declined, except those in India, New Zealand and Sri Lanka.

　　OPEC will discuss an output increase in Amsterdam next week because it's concerned high oil prices may slow US economic growth, Purnomo Yusgiantoro, president of the Organization of Petroleum Exporting Countries, said.

　　Crude oil for June delivery increased to US$40.77 a barrel in New York, its highest close since futures began trading in 1983. Oil prices have risen 26 percent this year and are close to the high of US$41.15 reached on October 10, 1990, after Saddam Hussein's Iraqi troops invaded Kuwait.

　　South Korea's Kospi Index tumbled 3.3 percent to 790.13, the lowest this year. Samsung Electronics, South Korea's biggest exporter, lost 3.4 percent to 507,000 won (US$427.78). Hyundai Motor Co, the nation's biggest carmaker, dropped 4.7 percent to 43,500 won.

　　South Korea will be the hardest hit among Asian economies excluding Japan in the event that global oil prices keep surging as its factories rely the most on imported oil, the Korea International Trade Association said.

　　Singapore Airlines slid 2 percent to 10 Singapore dollars (US$5.80). The national carrier said that fuel accounts for about a fifth of its total cost. Cathay Pacific, Hong Kong's largest carrier, declined 2.6 percent to 13.10 Hong Kong dollars (US$1.68). Qantas Airways, Australia's biggest airline, lost 3.3 percent to 3.26 Australian dollars (US$2.24).

　　Jet fuel prices in Singapore have jumped 21 percent this year after rising 17 percent last year, according to Bloomberg data. The price rose to US$47.90 a barrel on May 7, the highest in more than 13 years.

　　"Concerns about higher oil prices don't seem to be fully priced in shares yet," said Sohn Dong Shik, who manages the equivalent of US$423 million as chief fund manager at Mirae Asset Investment Management Co in Seoul.

　　Korean Air Co slid 5 percent to 13,250 won. Asia's fifth-largest carrier by sales has said every dollar increase in fuel prices raises its annual costs by about 30 billion won.

　　(Bloomberg News)