July 8 (Bloomberg) -- India’s rupee and the ringgit led currency losses in Asia as a drop in Japanese machinery orders and Gartner Inc.’s downgrade for the information technology sector cast doubts over the strength of an economic recovery.

The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10-most traded currencies excluding the yen, dropped to the lowest level in more than two weeks as global stocks slumped. Japan’s machine orders unexpectedly declined for a third month in May, the Cabinet Office reported today, while U.S.-based research firm Gartner predicted spending on information technology will fall 6 percent this year.

“Risk is being taken off the table and investors are becoming more defensive,” said Callum Henderson, head of global currency strategy at Standard Chartered Plc in Singapore. “This is the trend with emerging-market currencies in Asia today. The focus will be on corporate earnings in the U.S.”

The rupee declined 0.8 percent to 48.8450 per dollar as of 2:24 p.m. in Mumbai, according to data compiled by Bloomberg. It earlier touched 48.9475, its weakest since May 15. The ringgit declined 0.5 percent to 3.5645, and reached 3.5685, the lowest level since May 18.

The Singapore dollar slid 0.3 percent to S$1.4605 and the won fell 0.2 percent to 1,276.25, according to data compiled by Bloomberg.

Stocks, Earnings

The MSCI Asia-Pacific Index of shares slid for a sixth day, the longest losing steak since September, and the Standard & Poor’s 500 Index yesterday posted its lowest close since May 1.

Aluminum producer Alcoa Inc. kicks off the U.S. earnings season for the second quarter today. Analysts estimate profits at S&P 500 companies declined an average 34 percent in the quarter ended June 30 after plunging about 60 percent in the first three months of this year, data compiled by Bloomberg show.

Japan’s machinery orders, indicative of capital investment in the next three to six months, declined 3 percent in May from April, when they plunged 5.4 percent, the government said today. Economists surveyed by Bloomberg News forecast a 2 percent increase.

The yen strengthened to a six-week high against the euro as investors sought refuge in the Japanese currency on signs the global recession is far from over. The yen rose to 131.19 per euro in Tokyo from 132.13 yesterday in New York. It earlier reached 130.42, the strongest since May 21.

Foreign Selling

India’s rupee fell to a seven-week low and the Mumbai Stock Exchange Sensitive Index or shares dropped 1.4 percent. Overseas investors sold $73 million more local equities than they bought on July 6 and have been net sellers in two of the last three weeks, exchange data show.

“The rupee is tracking Asia’s equity markets, which are in negative territory due to concern about economic growth,” said Roy Paul, Mumbai-based assistant manager of treasury at Federal Bank Ltd.

Malaysia’s ringgit also declined to a seven-week low on concern lower prices for crude and palm oil, the nation’s biggest commodity exports, will curb demand for the currency. The cost of crude has fallen 8.7 percent in the past month, while that for palm oil is down 19 percent.

“The market is back in risk-aversion mode with lower stock and oil prices,” said Tan Voon Ching, a currency trader at OSK Investment Bank Bhd. in Kuala Lumpur. “That should set the weaker tone on the ringgit.”

Crude oil fell for a sixth day, sliding 1.2 percent to $62.17 a barrel. Palm oil in Kuala Lumpur fetched 1,993 ringgit ($559) a ton, down from 2,520 ringgit a month ago, according to Bloomberg data.

Export Slump

Malaysia will report tomorrow an 11 percent slide in factory production for May, according to a Bloomberg News survey of economists. That would be a ninth monthly decline. Exports slumped 30 percent from a year earlier in May, government data released last week showed.

Korea’s won slid to a one-week low as overseas investors turned net sellers of the nation’s stocks for the first time in two weeks.

“The Korean won weakened in line with other currencies in the region on the back of stocks in the U.S.,” said Standard Chartered’s Henderson.

Elsewhere, the Taiwan dollar dropped 0.1 percent to NT$33.036 versus the greenback as foreigners sold NT$5.3 billion ($159 million) more of the island’s shares than they bought today. The island’s government yesterday reported a 30 percent slide in exports for June, the 10th consecutive decline.

The Philippine peso and the Thai baht were little changed at 48.292 per dollar and 34.08, respectively. Financial markets in Indonesia were closed today for the presidential election.

To contact the reporters on this story: Lilian Karunungan in Singapore at lkarunungan@bloomberg.net

Last Updated: July 8, 2009 05:07 EDT