Sept. 3 (Bloomberg) -- Asian stocks fell, sending the region's benchmark index to a two-year low, after a slump in oil and gold dragged down commodities producers.

Cnooc Ltd., China's largest offshore oil explorer, and Sumitomo Metal Mining Co., Japan's biggest gold producer, both dropped more than 5 percent. Nippon Steel Corp. declined after ArcelorMittal said it will cut South African steel prices. China Huiyuan Juice Group Ltd. leapt 164 percent in Hong Kong after Coca-Cola Co. offered to buy it.

``There'll probably be more pain in the near term for commodities,'' said Prasad Patkar, who helps manage about $1.8 billion at Platypus Asset Management in Sydney.

The MSCI Asia Pacific Index declined 0.4 percent to 120.50 at 7:25 p.m. in Tokyo, the lowest since July 19, 2006. Raw- materials and energy shares had the biggest losses among the index's 10 groups, while utility companies led gains.

The main index has declined 24 percent this year as the global economy slowed and financial companies reported more than $500 billion in writedowns and credit losses.

Australia's S&P/ASX 200 Index dropped 1.1 percent after the country's economic expansion slowed in the second quarter to 0.3 percent, the weakest pace in two years. Newcrest Mining Ltd. fell.

Japan's Nikkei 225 Stock Average added 0.6 percent to 12,689.59. Bridgestone Corp., the world's largest tiremaker, advanced as raw-material costs declined. South Korea's Kospi Index rose 1.4 percent, led by Hyundai Motor Co. after workers agreed to a pay increase, signaling an end to stoppages.

Commodities Drop

Most Asian markets open for trading declined, while India's markets are closed for a holiday. U.S. stocks declined yesterday as a slump in commodity producers overshadowed gains in airlines and consumer companies, sending the Standard & Poor's 500 Index down 0.4 percent. S&P 500 futures added 0.1 percent today.

Cnooc tumbled 6 percent to HK$10.70 in Hong Kong after the Reuters/Jefferies CRB Index of commodities declined the most since March 19 as Hurricane Gustav spared U.S. Gulf petroleum rigs the destruction caused by Katrina and Rita in 2005. Commodities also slumped after the U.S. dollar jumped to the highest since October against six major currencies, eroding the appeal of raw materials priced in the U.S. currency.

Inpex Holdings Inc., Japan's largest oil explorer, lost 3.9 percent to 1.025 million yen. Sumitomo Metal sank 6.4 percent to 1,252 yen. Newcrest Mining, Australia's largest gold producer, slumped 9 percent to A$22.60. BHP Billiton Ltd., the world's biggest mining company, dropped 3.4 percent to A$37.95.

Deeper Concerns

Gasoline futures tumbled 9.2 percent. Oil futures fell as much as 8.7 percent to $105.46, the lowest since April 4, before closing at $109.71 yesterday. Gold futures lost 3 percent, the biggest drop since Aug. 11.

``Concerns have deepened that commodities and energy prices will drop further,'' said Wu Kan, a fund manager in Shanghai at Dazhong Insurance Co., which oversees $285 million.

Fuel-dependent companies gained on speculation lower energy costs will bolster earnings. Tokyo Electric Power Co., the world's second-biggest non-state buyer of liquefied natural gas, rose 3.9 percent to 3,230 yen. Korean Air Lines Ltd., South Korea's largest carrier, jumped 12 percent to 34,800 won.

Bridgestone added 5.6 percent to 1,951 yen. About seven gallons of oil are required to produce a car tire, according to the Rubber Manufacturers Association. Oji Paper Co., Japan's biggest user of high-sulfur fuel oil, climbed 6.9 percent to 586 yen, the highest since Oct. 11, 2007.

``Relief from falling energy prices provides a significant boost to earnings of fuel-dependent companies,'' said Platypus Asset's Patkar.

Coca-Cola Takeover

Huiyuan Juice, China's biggest maker of pure fruit juice, jumped 164 percent to HK$10.94. Coca-Cola offered to buy the company for HK$17.9 billion ($2.3 billion), Beijing-based Huiyuan said in a statement.

Hyundai Motor, South Korea's largest automaker, rose 0.6 percent to 71,100 won, after workers tentatively agreed yesterday to a 5.6 percent increase in basic pay.

Nippon Steel, the world's second-largest steelmaker, fell 2.9 percent to 503 yen, the most since Aug. 19, after rival ArcelorMittal said it will cut South African steel prices, raising concern prices will drop in Asia.

JFE Holdings Inc., Japan's No. 2 steelmaker, dropped 4.1 percent to 4,500 yen. South Korea's Posco declined 2.5 percent to 471,500 won. BlueScope Steel Ltd., Australia's largest steelmaker, lost 4.2 percent to A$8.88.

Komatsu Ltd., the world's second-largest maker of earthmoving equipment, dropped 7.1 percent to 2,095 yen, the most since Feb. 6. Mitsubishi UFJ cut its rating to ``market perform'' from ``outperform,'' citing increased concern that Komatsu may miss its profit forecast due to falling demand for construction machinery globally.

To contact the reporter for this story: Chua Kong Ho in Shanghai at kchua6@bloomberg.net; Shani Raja in Sydney at sraja4@bloomberg.net.

Last Updated: September 3, 2008 06:28 EDT