June 30 (Bloomberg) -- Asian stocks rose, led by Toyota Motor Corp. and Hyundai Motor Co., as the dollar's gain against the region's currencies boosted optimism that the value of their U.S. sales will increase.

For exporters, ``it's certainly a free boost to their earnings when the currencies move the right way,'' said Michael Birch, who manages the equivalent of $80 million at Wallace Funds Management in Sydney.

The Morgan Stanley Capital International Asia-Pacific Index, which tracks more than 1,000 stocks, added 0.2 percent to 99.41 at 12:35 p.m. in Tokyo. About the same number of shares rose as fell. Indexes dropped in Japan, Hong Kong, China, Indonesia and the Philippines, while they gained elsewhere in the region.

Japan's Nikkei 225 Stock Average fell from an 11-week high. Kubota Corp., Japan's biggest farming equipment maker, led declines after saying 79 people died of diseases that may have been caused by asbestos used at two of its plants.

China Cosco Holdings Co., the nation's biggest container shipping line, slumped in its first day of trading in Hong Kong on concern excess capacity for sea freight may dent earnings.

An index of energy shares declined for a second day, led by PetroChina Co., after oil fell below $58 a barrel in New York. The Standard & Poor's 500 Index slipped 0.1 percent to 1199.85 yesterday. Energy shares such as Exxon Mobil Corp. made up almost a third of the drop as oil prices slumped.

Fluctuating Currencies

Toyota, Asia's biggest automaker, added 1 percent to 3,960 yen. The Japanese carmaker derives about 70 percent of operating profit from North America and its annual operating profit drops about 20 billion yen ($181 million) for every 1 yen the yen gains against the dollar, according to an estimate by Credit Suisse First Boston Japan Inc.

Hyundai Motor, South Korea's largest automaker, rose 1.2 percent to 58,400 won.

The dollar yesterday traded as high at 110.64 yen, the strongest since Oct. 15. It was recently at 110.47 yen. South Korea's won fell for a third day to its weakest since Feb. 11, losing 0.2 percent to 1,028.3 against the dollar, according to Seoul Money Brokerage Services Ltd.

``The weaker won is good news for exporters as it may support earnings recovery from the third quarter,'' said Kim Woo Sik, who helps oversee about $300 million at Daehan Investment Trust Management Co. in Seoul. ``The won is expected to weaken further in the second half of the year.''

The Thai baht fell as much as 0.1 percent to 41.38, its weakest since Oct. 22. The Taiwan dollar tumbled 0.3 percent to NT$31.69, its lowest since April 19, according to Taipei Forex Inc.

Not Attractive

China Cosco fell 8.8 percent to HK$3.875 in Hong Kong. The Beijing-based company raised HK$9.52 billion ($1.22 billion) in an initial public offering after pricing its shares at the bottom of a targeted range.

Credit Suisse First Boston analysts today started covering the stock with an ``underperform'' recommendation on concern shipping rates will decline. The company's Cosco Pacific Ltd. unit, a member of the Hang Seng Index, fell 1.3 percent to HK$15.25.

``The shipping industry may have reached the peak of its cycle,'' said Jacky Choi, who declined to say if he owns Cosco shares among $2.4 billion of Asian stocks he helps manage at Value Partners Ltd. in Hong Kong. China Cosco ``isn't attractive.''

Not Pleased

Chinese stock indexes are set for their third day of declines. Huaneng Power International Inc. led the largest companies by value lower amid concern shareholders won't approve compensation plans linked to government sales of shares.

Huaneng Power, the listed unit of China's largest power group, fell 2.9 percent to 6.34 yuan. Wuhan Iron & Steel Co., China's second-biggest publicly traded steelmaker by value, slid 3.9 percent to 3.43 yuan.

``Generally, investors weren't pleased with the compensation plans and are hoping that the companies will revise their proposals,'' said Zhang Xuejun, who manages the equivalent with $622 million with Guotai Junan Allianz Fund Management Co. in Shanghai.

PetroChina, the nation's biggest oil producer and Asia's biggest company by market value, fell 1.7 percent to HK$5.80. Inpex Corp., Japan's largest oil explorer, declined 1.6 percent to 620,000 yen. SK Corp., South Korea's largest oil refiner, slid 0.6 percent to 54,300 won.

Crude oil prices fell 1.6 percent to $57.26 a barrel in New York, bringing its two-day drop to more than $3 a barrel, as a government report showed U.S. oil and fuel inventories rose. Oil recently traded at $57.32 in after-hours electronic trading.

``Oil stocks, like many of the commodities plays in the market, look overstretched,'' said Atul Lel, who helps manage about $500 million at White Funds Management in Sydney. ``Demand levels probably won't be as high in the future.''

To contact the reporter for this story: Stuart Kelly in Sydney skelly22@bloomberg.net;

Last Updated: June 29, 2005 23:54 EDT