Aug. 31 (Bloomberg) -- Japan's Nikkei 225 Stock Average slipped after oil prices climbed for a third day and a report showed industrial production dropped twice as much as economists expected. Advantest Corp. led declines by electronics companies.

``It's inevitable that the surge in oil prices we're seeing now will eventually affect growth,'' said Hideaki Kurimoto, who helps oversee about $2.7 billion at Meiji Dresdner Asset Management Co. in Tokyo. ``The production report does raise concern that a recovery will be delayed a bit.''

The Nikkei lost 0.3 percent to 12,429.43 at the 11 a.m. break in Tokyo, paring its gain this month to 4.4 percent. The Topix index dropped 0.2 percent. The broader index has jumped 5.5 percent this month, on course for its biggest advance since an 8.9 percent climb in March 2004.

Cnooc Ltd., China's third largest oil company, fell after reporting first-half profit that missed some analyst estimates. Creative Technology Ltd. climbed after the Singapore company won a patent for technology used in MP3 music players such as its Zen machine and Apple Computer Inc.'s iPods.

Stock indexes in Australia, Hong Kong, and the Philippines fell, while others in the region rose. The Morgan Stanley Capital International Asia-Pacific Index, which tracks more than 1,000 companies, was little changed at 104.48. The benchmark is set for a 2.7 percent gain this month, its third straight monthly advance.

The U.S. Standard & Poor's 500 Index fell 0.3 percent yesterday after minutes released from the Aug. 9 Federal Reserve meeting showed policy makers were concerned that surging fuel prices would curb economic growth. The U.S. is the region's biggest export market.

Kyocera, Nissan

Crude oil futures in New York reached a record $70.85 a barrel yesterday as companies in the U.S. assessed damage to Gulf Coast refineries from Hurricane Katrina. The contract recently changed hands at $70.33 in after-hours trading.

Advantest, the world's biggest maker of equipment used to test memory chips, lost 1.6 percent to 8,710 yen. Advantest is the biggest member in the Nikkei. Kyocera Corp., the world's largest maker of ceramic packaging used to protect finished microchips, fell 1.2 percent to 7,690 yen.

Japan's industrial production declined 1.1 percent in July from a month ago after a slump in export demand caused manufacturers to cut back production on electronic parts, a government report showed. The median forecast in a Bloomberg survey of 37 economists was for a 0.5 percent drop.

Cnooc, Creative

Cnooc, China's third largest oil company, slid 3.5 percent to HK$5.55. First-half net income surged 69 percent to a record 11.8 billion yuan ($1.5 billion) on higher demand and oil prices, the company said yesterday after the market closed. The median estimate in a Bloomberg survey of seven analysts was for profit of 12.36 billion yuan.

Creative Technology jumped 6.2 percent to S$13.80. The company may seek licensing payments or sue competitors that use the technology, which lets users scroll through songs and choose tracks, said Craig McHugh, president of Creative Labs, the U.S. division of Creative.

Elsewhere in the region, Santen Pharmaceutical Co. jumped 6.8 percent to 2,830 yen, on course for a six-year high. Merrill Lynch & Co. rated the shares ``buy'' in new coverage, citing the introduction of two new drugs to treat eye ailments. The stock had the biggest fluctuation in the MSCI World Index.

To contact the reporter on this story: Michael Tsang in Tokyo at mtsang1@bloomberg.net; Tomoko Yamazaki in Tokyo at tyamazaki@bloomberg.net.

Last Updated: August 30, 2005 23:07 EDT