Asian markets start week lower

Asian stocks declined the most this month as the MSCI Asia Pacific Index sank 1% at noon in Tokyo.  The won retreated from a three-year high. About three shares declined for every one that advanced on MSCI’s Asia Pacific Index, which was headed for its biggest drop since June 27. Japan’s Nikkei 225 Stock Average lost 0.7% and Hong Kong’s Hang Seng Index slumped 0.9%.

Australian companies traded lower after the government announced plans for a carbon tax yesterday. Australia’s S&P/ASX 200 Index slipped 1.3%, Asia’s biggest drop, after Prime Minister Julia Gillard yesterday announced the nation’s first tax on greenhouse gas emissions. Macarthur Coal tumbled 3.2% while Virgin Blue Holdings decreased 2.9% amid speculation the levy will hurt the earnings of mining companies and airlines. Qantas Airlines said the tax could cost the company around A$110 million to $115 million in 2013, leading to higher ticket prices.

The Asia Pacific region was also dragged lower by a higher than expected Chinese reading on inflation over the weekend. Industrial & Commercial Bank of China slid 1%, pacing declines among Chinese financial companies traded in Hong Kong, after the nation’s consumer price index jumped 6.4% in June, the most since June 2008 and more than the 6.2% forecast by economists. Separate data released yesterday showed exports rose a smaller-than-forecast 17.9%, while imports grew 19.3%, less than analysts had predicted. China will report GDP numbers on Wednesday.

In other corporate news, Asia’s largest makers of silicon for solar panels are almost doubling their factory size this year just as surplus production sends prices tumbling for the main raw material for the $35 billion industry. Korea’s OCI and GCL-Poly Energy Holdings of China said publically they’ll increase capacity to a combined 88,000 metric tons a year from 48,000 tons.

In commodities, immediate-delivery bullion was little changed at $1,543.70/lb in early morning Singapore trading after advancing as much as 0.2% to $1,547.18/lb, the highest since June 23. Gold, which touched a record $1,577.57/lb on May 2, climbed for the first week in the last week after US employers added the fewest jobs in nine months in June and the unemployment rate jumped unexpectedly. Futures on the Comex in New York gained 0.2% to $1,544/lb.

In the agricultural space, Queensland Sugar Chairman Alan Winney wrote to Australian farmers, noting more offshore investment in the agricultural space as foreign countries look to secure food supply to appease concerns of rising food demand. China reported a 575 increase in pork prices, year on year, which alone contributed to around 21% of the CPI increase for June. Pork in Beijing on Sunday rose to 36 Yuan (US$5.5) per kilo.