Asian stocks fell for a third week, ending the regional benchmark's worst first half in 16 years, as record oil prices dimmed earnings prospects and concern grew that credit market losses haven't reached an end.
Toyota Motor Corp., the world's second-largest automaker, led declines after saying surging gasoline prices may crimp demand for cars. Mitsubishi UFJ Financial Group Inc. fell as Citigroup Inc. prepared to cut jobs and UBS AG forecast the U.S. bank will write down more assets. Brambles Ltd., the world's largest supplier of industrial pallets, advanced in Australia after saying it expects ``solid'' profit growth.
Japan's Nikkei 225 Stock Average sank 2.9 percent this week to 12,544.36, extending its losing streak to a seventh day, the longest since November. New Zealand's NZX 50 Index fell to its lowest since December 2005, dropping 1.7 percent to 3,226.91 after the economy shrank in the first quarter, putting the country on the brink of its first recession in 10 years.
U.S. stocks tumbled on June 26, sending the Dow Jones Industrial Average to its worst June since the Great Depression, as higher oil, credit-market writedowns and a slowing economy threatened to extend a yearlong profit slump.
Toyota, the world's second-largest carmaker, tumbled 6.3 percent to 5,070 yen this week. The company said it may cut its 2008 sales target to reflect slowing demand in the U.S. Hyundai Motor Co., South Korea's largest automaker, fell 7.3 percent to 72,500 won this week.
Automakers also fell after Japan's May core consumer prices climbed 1.5 percent from a year earlier after rising 0.9 percent in April. Crude oil surpassed $141 for the first time as a weaker dollar spurred investment in commodities.
Matsushita Electric Industrial Co., the world's largest consumer-electronics maker, lost 4.6 percent to 2,295 yen this week. Samsung Electronics Co., Asia's biggest mobile-phone maker, slid 3.7 percent to 643,000 won, the lowest since April 1, after Goldman Sachs Group Inc. said second-quarter operating profit will be ``weaker than expected'' and cut its price estimate by 3.2 percent.

European stocks fell, heading for the worst first half since at least 1987, as investors speculated record oil prices and higher borrowing costs will erode earnings.
Daimler AG and Renault SA retreated after crude topped $142 a barrel. Carrefour SA declined as Europe's biggest retailer cut its sales outlook, while Ericsson AB slumped after its mobile- phone venture with Sony Corp. scaled back forecasts for the second time this year. Barclays Plc and Deutsche Bank AG slipped as analysts said the banks may need more capital.
Analysts have slashed earnings estimates as confidence in the economy wanes. Earnings for companies in the Stoxx 600 are projected to fall 0.5 percent this year, down from 11 percent growth forecast at the end of 2007, according to data compiled by Bloomberg.
European business confidence dropped more than economists forecast this month, indicating the economy is continuing to cool, the European Commission said today.
``It could get worse before it gets better,'' Lucy MacDonald, London-based chief investment officer of global equities at RCM Ltd., which has $100 billion, said in a Bloomberg Television interview. ``There is more concern about growth generally, inflation and no help from interest rates. Weakness is going to be more widespread.''
National indexes declined in 14 of the 18 western European markets. France's CAC 40 fell 0.7 percent, and Germany's DAX slipped 0.6 percent. The U.K.'s FTSE 100 added 0.2 percent.
European Central Bank council member Yves Mersch said the bank will do whatever is needed to contain inflation in the 15- nation euro region. ECB President Jean-Claude Trichet reiterated on June 25 that policy makers may raise their key rate from a six-year high next month to curb price increases.
Fed policy makers kept rates unchanged this week, saying ``upside risks'' to prices have increased.
Stocks pared losses after a report showed consumer spending rose in the U.S. more than analysts estimated in May as tax rebates propelled the biggest gain in incomes almost three years.
Daimler, the world's second-largest maker of luxury cars, slipped 2.9 percent to 39.88 euros. Renault, France's second- biggest carmaker, dropped 2.7 percent to 51.49 euros.
Oil climbed as much as $2.62, or 1.9 percent, to $142.26, after jumping more than $5 yesterday, as a weaker dollar spurred investment in commodities. Oil has soared almost 50 percent in 2008. Goldman Sachs Group Inc. analyst Arjun N. Murti estimates it may rise to between $150 and $200 a barrel within two years.
Total SA, Europe's largest oil refiner, climbed 2 percent to 52.91 euros. Royal Dutch Shell Plc, the region's biggest oil producer, advanced 1.5 percent to 2,015 pence.
BHP Billiton Ltd., the world's largest mining company, added 3.7 percent to 1,875 pence. Anglo American Plc, the second- biggest, jumped 2.8 percent to 3,396 pence.
Gold rose to the highest in a month as record energy costs boost demand for the precious metal as a hedge against inflation. Silver also gained.
Carrefour dropped 7.8 percent to 34.91 euros as it said operating profit will increase at about the same pace as sales this year, six weeks after saying earnings would exceed the pace of revenue growth.
European retail sales plunged in June as soaring fuel and food prices hit consumers' budgets, prompting stores to cut jobs and lose confidence about their prospects, the Bloomberg purchasing managers index showed.

U.S. stocks slumped last week, pushing the Dow Jones Industrial Average to the brink of a bear market, on mounting concern that writedowns and record oil prices will keep eroding profit and economic growth.
JPMorgan Chase & Co., Citigroup Inc. and Bank of America Corp. led financial stocks in the Standard & Poor's 500 Index to the fourth week of declines, the longest streak since 2005. Goldman Sachs Group Inc. recommended investors sell bank shares because credit losses will linger into 2009. United Parcel Service Inc. fell the most since July 2006 after saying profit will miss its prior forecast because fuel costs and an ``anemic'' economy reduced demand for air shipments.
The Standard & Poor's 500 Index dropped 3 percent to 1,278.38, a three-month low. The Dow average retreated 4.2 percent to 11,346.51 and needs to fall another 0.1 percent to complete a bear-market decline of 20 percent from its October record. The Nasdaq Composite Index lost 3.8 percent to 2,315.63.
``The market is dealing with anxiety about further losses and also coming to grips that we're in a significantly slower period of economic growth,'' said Kevin Cronin, Boston-based head of investments at Putnam Investments, which manages $180 billion. ``People thought the worst was behind us.''
Nine out of 10 S&P 500 industries fell this week, giving the index an 8.7 percent plunge in June. That's the steepest monthly slide since September 2002. Analysts forecast earnings at companies in the S&P 500 will slump 11 percent on average in the second quarter, according to a Bloomberg survey yesterday, compared with a projected decline of 8.9 percent a week earlier.

The dollar declined to a two-week low against the euro and the yen after the Federal Reserve gave no indication it will start reversing the most aggressive series of cuts in two decades.
The greenback dropped for a second week as the Dow Jones Industrial Average headed for the worst June since the Great Depression and crude oil surged to a record. The European Central Bank is expected to raise interest rates by a quarter- percentage point on July 3, the same day a government report is forecast to show the U.S. lost jobs in June for a sixth month.
``It's a combination of less hawkishness than expected from the Fed and a fairly sharp breakdown in equities,'' said Richard Franulovich, a senior currency strategist at Westpac Banking Corp in New York. ``That's a pretty toxic mix for the dollar.''
The dollar fell 1.2 percent to $1.5794 per euro, from $1.5606 on June 20, after reaching $1.5791 yesterday, the weakest since June 9. It dropped 1.1 percent to 106.15 yen, from 107.33, touching 105.87 yesterday, also the lowest since June 9. The euro was little changed at 167.62 yen after touching the all-time high of 169.46.
Futures on the Chicago Board of Trade show a 24 percent chance that the Fed will increase the target rate for overnight lending between banks by a quarter-percentage point at its next meeting on Aug. 5, compared with 40 percent odds a week ago. The central bank held the benchmark rate at 2 percent on June 25, saying in its statement that ``uncertainty'' about the inflation outlook remains high.
The central bank cut borrowing costs seven times beginning in September from 5.25 percent to prevent the housing slump and credit market losses from dragging the world's largest economy into a recession.
The dollar advanced to a one-month high against the euro on June 13, four days after Fed Chairman Ben S. Bernanke said the risk of a ``substantial downturn'' had diminished and accelerating inflation ``would be destabilizing for growth.''
The Canadian dollar appreciated to a three-week high against the U.S. dollar this week as crude oil rose above $142 per barrel. The loonie, named after the bird on the one-dollar coin, increased 0.6 percent to C$1.0105 per U.S. dollar and touched C$1.0049 yesterday, the highest since June 3.
Norway's krone rose 1.7 percent to 5.0645 per dollar, reaching 5.0421 yesterday, the strongest since June 9.
Commodities such as crude oil and gold account for 54 percent of Canada's exports. Oil is Norway's biggest export.
The ECB is poised next week to raise its 4 percent main refinancing rate for the first time since June 2007, according to the median forecast of 57 analysts surveyed by Bloomberg News. The Labor Department will probably report that U.S. non- farm payrolls fell by 60,000 in June, according to the median forecast of 64 analysts in a separate survey.
The euro pared its weekly gain as ECB council member Miguel Angel Fernandez Ordonez, who is also governor of the Bank of Spain, told reporters in Rome yesterday that an interest-rate increase by the ECB ``is not certain, but possible.'' ECB President Jean-Claude Trichet said on June 9 that rates my rise by a ``small amount.''
``The market is positioned for a series of rate increases, and the ECB is trying to talk down expectations,'' said Ian Stannard, a senior currency strategist in London at BNP Paribas SA, the largest French bank. ``The euro will come under pressure as rate expectations are adjusted.'' The euro may fall to $1.5285 in two weeks, Stannard said.
Investors reduced wagers on additional rate increases by the ECB this year, futures contracts showed. The implied yield on the December Euribor futures contract dropped 14 basis points this week to 5.16 percent.
An index measuring confidence in the euro area fell to 94.9, the lowest since May 2005, from 97.6 the previous month, the European Commission said in Brussels yesterday.
The yen gained 0.9 percent to 10.28 against Mexico's peso and 0.8 percent to 66.27 versus the Brazilian real this week as the Dow dropped 4.1 percent and the Standard & Poor's 500 Index fell 3 percent. The Dow has declined 10 percent this month for the worst June since 1930.
Investors bought the yen to pay back loans in the currency used to fund investments in higher-yielding assets, which become less profitable when stocks fall.
``There's very little appetite to go against market trends,'' said Jens Nordvig, a strategist at Goldman Sachs Group Inc. in New York. ``The overall risk appetite is very low.''
The Bank of Japan will keep its target lending rate at 0.5 percent through September 2009, a Bloomberg News survey of economists shows. Brazil's benchmark rate is 12.25 percent, while Mexico's is 7.75 percent.
Implied volatility on one-month dollar-yen options reached 11.48 percent, the highest since June 16. Bigger currency swings can wipe out the profits of the carry trade, in which investors borrow in countries with low interest rates and buy assets where returns are higher.