Aug. 7 (Bloomberg) -- Asian stocks fell for the third time in four days as lower profits from Konica Minolta Holdings Inc. and DBS Group Holdings Ltd. fueled concern an equity rally in the past month had outpaced earnings prospects.

Konica Minolta Holdings Inc., a maker of printers and office equipment, sank 10 percent after first-quarter profit tumbled 98 percent. DBS, Southeast Asia’s biggest bank, dropped 3.6 percent in Singapore after saying non-performing loans increased. Orient Overseas (International) Ltd., Hong Kong’s biggest container line, slumped 7.6 percent after reporting its first loss in 10 years.

The MSCI Asia Pacific Index lost 0.7 percent to 111.79 as of 7:30 p.m. in Tokyo, leaving it little changed for the week. The gauge has climbed 58 percent from a five-year low on March 9 on speculation a recovering global economy will boost corporate earnings.

“The market has run a bit ahead of the fundamentals,” said Rob Patterson, who helps manage $2.7 billion at Argo Investments Ltd. in Adelaide, Australia. “Things are getting less worse rather than better. Having said that, we’re hopeful we’ve passed the low point and that the world is becoming a better place.”

Japan’s Topix Index dropped 0.1 percent. Kubota Corp., Asia’s largest tractor maker, sank 6.1 percent on lower earnings. Hong Kong’s Hang Seng Index lost 2.5 percent, with China Construction Bank Corp. falling 3.2 percent after saying it will reduce lending.

Jobless Rate

Australia’s S&P/ASX 200 Index lost 0.6 percent, led by BHP Billiton Ltd., the world’s biggest mining company, which sank 2 percent on lower metal prices. West Australian Newspapers Holdings Ltd. slumped 3.3 percent as falling advertising revenue hurt profits. Taiwan’s stock market is shut today.

Futures on the U.S. Standard & Poor’s 500 Index lost 0.4 percent. The gauge slipped 0.6 percent yesterday as JPMorgan Chase & Co. downgraded health-care stocks.

Economists in a Bloomberg survey estimate that a Labor Department report today will show unemployment rose to 9.6 percent, the highest level since 1983. The number of Americans filing claims for jobless benefits last week fell more than economists predicted, according to data released yesterday, a sign some employers have stopped paring staff.

“The rate of deterioration in unemployment is likely to ease, but there are doubts we’ll see as much improvement as the market would like,” said Kazuhiro Takahashi, a general manager at Daiwa Securities SMBC in Tokyo.

Toyota Motor Corp., which gets 31 percent of its revenue in North America, lost 1 percent to 4,090 yen. Nissan Motor Co. dropped 1.1 percent to 694 yen.

Slumping Earnings

Better-than-expected earnings and economic reports worldwide have driven stocks higher since March, lifting the average valuation of the MSCI Asia Pacific Index’s companies to a four-month high of 25 times estimated profit on July 28. Data this week showed Australian employers unexpectedly added jobs and pointed to improving manufacturing industries in China, Europe and the U.S.

“We need to see more earnings revisions come through in order for the market to push much higher,” said Fujio Ando, a fund manager at Tokyo-based Chibagin Asset Management Co. “One could say stocks are fully priced already for the positive results we’ve had.”

The MSCI Asia Pacific Index has rallied 9.5 percent in the past month as companies reporting better-than-estimated earnings outnumbered those that disappointed by a ratio of two to one, according to data compiled by Bloomberg.

Konica, Kubota

Konica retreated 10 percent to 891 yen. The company said yesterday after markets closed net income dropped 98 percent to 299 million yen ($3.1 million) for the three months ended June, from 17.6 billion yen a year earlier. Nomura Holdings Inc. cut its rating on the stock to “neutral” from “buy.”

Kubota sank 6.1 percent to 765 yen after first-quarter operating profit tumbled 70 percent.

Singapore’s DBS fell 3.5 percent to S$12.84. The bank said net income fell 15 percent in the second quarter as non- performing loans climbed to 2.8 percent of total lending from 1.4 percent a year ago.

The rising bad loans were a “negative surprise,” Harsh Wardhan Modi, an analyst at JPMorgan Chase & Co., told Bloomberg Television. “That is something we need to understand more.”

In Hong Kong, Orient Overseas slipped 7.6 percent to HK$41.70 after reporting a $231.8 million first-half net loss as world trade slumped and rising overcapacity pummeled cargo rates. West Australian Newspapers fell 3.3 percent to A$6.15 after saying full-year profit dropped 21 percent.

Reduced Lending

China Construction Bank dropped 3.2 percent to HK$5.75. The company will reduce new lending by about 70 percent in the second half after a surge in loans in the first six months increased credit risk, President Zhang Jianguo said.

BHP declined 2 percent to A$38. Rio Tinto Group, the world’s third-largest mining company, fell 2.2 percent to A$60.57. Fortescue Metals Group Ltd. sank 3.1 percent to A$4.41.

A measure of six metals, including copper and aluminum, traded on the London Metal Exchange plunged 3.5 percent yesterday, the steepest drop since July 8. The Baltic Dry Index, a measure of shipping costs for commodities, tumbled 4.7 percent, a sixth-consecutive decline.

Daicel Chemical Industries Ltd., a Japanese maker of air- bag inflators, climbed 3.6 percent to 580 yen after boosting its profit forecast as it slashed costs. SK Networks Co., a South Korean trading company, surged 6.6 percent to 13,800 won after Daewoo Securities Co. advised investors to buy the shares on an improving debt outlook.

“There are still quite a few companies that investors have yet to properly price for the recovery,” said Daiwa’s Takahashi.

To contact the reporter for this story: Shani Raja in Sydney at sraja4@bloomberg.net.

Last Updated: August 7, 2009 06:36 EDT