Sept. 11 (Bloomberg) -- Asian stocks had their biggest slide in seven weeks, led by BHP Billiton and Zijin Mining Group Co., as gold declined below $600 an ounce and oil dropped to a five- month low.

``The commodities stocks are having a rest after a massive run in metals and oil prices the last couple of years,'' said Rob Patterson, who manages $2.5 billion at Argo Investments Ltd. in Adelaide. ``The raging bull is dead.''

The Morgan Stanley Capital International Asia-Pacific Index lost 1.7 percent to 126.68 at 7:43 p.m. in Tokyo, its biggest drop since July 18. Stock markets slid around the region except in China, the Philippines, Taiwan and Sri Lanka. India's Sensitive index dropped 3.1 percent, the region's biggest loser.

Japan's Nikkei 225 Stock Average dropped 1.8 percent to 15,794.38. Aeon Co. and Fanuc Ltd. paced declines after a revised gross domestic product figure was lower than expected and machine orders fell the most in almost 20 years, reducing confidence in the nation's economic growth.

Energy stocks as a group fell 2.4 percent, the biggest drop in the MSCI index. Oil futures in New York declined 0.7 percent to $65.78 a barrel in after-hours trading, set for the lowest since March 28, after Iranian and European negotiators reported progress in a second day of talks on a nuclear dispute.

BHP, the world's largest mining company, dropped 3.5 percent to A$26.13. Zijin Mining, which runs China's largest gold mine, tumbled 4.6 percent to HK$3.72. Mitsui Mining & Smelting Co., the world's biggest maker of copper foil, declined 3.5 percent to 635 yen. Korea Zinc Co., the world's No. 1 zinc smelter by production, lost 4.4 percent to 83,500 won. Hindustan Zinc Ltd., India's biggest zinc producer, dropped 8.9 percent, to 596.1 rupees.

Rally Over

``A drop in commodities prices is negative for the earnings outlook for resource-related companies,'' said Jeon Jeong Woo, who manages $400 million at Daehan Investment Trust Management Co. in Seoul. ``Commodity stocks are not likely to outperform the market from here.''

Copper in New York fell 1.9 percent in after-hours trading, extending a 2.2 percent slump on Sept. 8. A measure of six metals on the London Metal Exchange including copper and nickel slipped 2.3 percent on Sept. 8.

Gold for immediate delivery fell 2.3 percent to $596.24 an ounce, its lowest since June 28.

The drop in oil, gold and other raw materials since May is signaling an end to the five-year bull market in commodities as global growth slows and demand falls, according to Stephen Roach, the New York-based chief global economist at Morgan Stanley, the world's biggest securities firm.

The Reuters/Jefferies CRB Futures Price Index has declined 12 percent from its May record, more than enough to qualify as the first so-called correction since the rally began in late 2001. Gold and sugar already are in a bear market, defined as a price drop of 20 percent.

`Negative Possibilities'

Inpex Holdings Inc., Japan's largest oil explorer, slid 3.4 percent to 950,000 yen. Woodside Petroleum Ltd., Australia's No. 2 oil and gas producer after BHP, lost 3.6 percent to A$38.54. PetroChina Co., the nation's biggest oil company, fell 1.5 percent to HK$8.29.

``The market had factored in a lot of negative possibilities such as hurricanes in the U.S. into the price of oil, but those events have not played out,'' said Hisakazu Amano, who helps oversee $16 billion at T&D Asset Management Co. in Tokyo. ``The drop in the crude price will be bad for oil-related companies' earnings.''

UBS AG on Sept. 8 recommended investors sell all their holdings of Japanese energy-related stocks and machinery makers because of concerns over a slowing global economy.

Aeon, Fanuc

Japan's economy expanded 0.2 percent in the second quarter, the Cabinet Office said today. That was in line with the preliminary report and lower than the 0.3 percent median forecast of 19 economists surveyed by Bloomberg News. Consumer spending rose 0.5 percent, unchanged from the initial report.

``People were expecting some better numbers on the consumer side,'' said T&D's Amano. ``Summer bonuses were not as good as company earnings had led us to believe they would be and that hurt spending.''

Aeon, Japan's largest retailer, lost 2.3 percent to 2,825yen. Sumitomo Realty & Development Co., the country's fourth-largest property developer, slipped 1.7 percent to 3,460 yen.

Non-government orders excluding shipping and utilities dropped a seasonally adjusted 16.7 percent in July from a month earlier, the largest slide since October 1986, the Cabinet Office said today. The median forecast of 30 economists surveyed by Bloomberg News was for a 5.4 percent decline.

Fanuc, a maker of factory automation equipment and robots, lost 2.1 percent to 9,260 yen. Komatsu Ltd., the world's second- largest maker of earthmoving equipment, lost 3.1 percent to 2,180 yen.

In Hong Kong, Lenovo Group Ltd., the world's third-largest personal-computer maker, lost 2.2 percent to HK$2.72. The company is prepared to cut prices in China as competitors such as Dell Inc. step up efforts to gain market share in the world's most populous nation, Chairman Yang Yuanqing said.

Aeon Co (8267 JT)
BHP Billiton Ltd. (BHP AU)
Fanuc Ltd. (6954 JT) Inpex Holdings Inc. (1605 JT)
Hindustan Zinc Ltd. (HZ IN)
Jiangxi Copper Co. (358 HK)
Komatsu Ltd. (6301 JT)
Korea Zinc Co. (010130 KS)
Lenovo Group Ltd. (992 HK)
Mitsui Mining & Smelting Co. (5706 JT)
PetroChina Co. Ltd. (857 HK)
Sumitomo Realty & Development Co. (8830 JT)
Woodside Petroleum Ltd. (WPL AU)
Zijin Mining Group Co. (2899 HK)

To contact the reporter on this story: Darren Boey in Hong Kong at dboey@bloomberg.net; Stuart Kelly in Sydney skelly22@bloomberg.net

Last Updated: September 11, 2006 07:03 EDT