June 3 (Bloomberg) -- Asian stocks slumped, reversing earlier gains, after crude oil futures climbed in New York, stoking concern rising fuel costs will slow economic growth.

Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Co. declined on concern Intel Corp. may miss its highest sales forecast this quarter, signaling a slowdown in the semiconductor industry.

Morgan Stanley Capital International's Asia-Pacific Index, which tracks more than 900 stocks in the region, shed 2 percent to 86.80 as of 5:45 p.m. in Tokyo. The index has lost 12 percent since its high this year on April 7 amid concern rising oil prices will hamper economic growth in Asia, where countries such as Japan and South Korea import most of their oil.

``Higher oil prices mean higher costs and lower income, and that will in turn affect consumption and slow growth,'' said Teo Chon Kiat, who helps manage the equivalent of $1.4 billion of Asian assets at DBS Asset Management Ltd. in Singapore. ``We have raised a bit of cash over the past week.''

South Korea's Kospi index slumped 4.3 percent to 770.06, the biggest decliner in the region. Japan's Nikkei 225 Stock Average lost 1.9 percent to 11,027.05.

Hong Kong's Hang Seng Index shed 2.2 percent, its biggest drop since May 17, to 11,929.26 after a South China Morning Post report fueled concern that Chinese interest rates will increase soon. Other stock benchmarks in the region also declined, except for in the Philippines.

Crude Oil

Crude oil futures rose as traders bet increased production pledged by some OPEC members will take several weeks to reach markets and ease concern about fuel shortages.

Crude oil for July delivery climbed as much as 2.2 percent to $40.85 a barrel in after-hours electronic trading on the New York Mercantile Exchange. The contract fell 5.6 percent yesterday after Qatar's energy minister, Abdullah bin Hamad al-Attiyah, said the Organization of Petroleum Exporting Countries should pump as much as possible to lower prices.

``Higher oil prices have been a negative for the market,'' said Koshi Kumagai, who helps manage the equivalent of $1.8 billion in assets as a fund manager at HSBC Asset Management (Japan) K.K. in Tokyo. ``Shares of companies that compete globally are the ones to avoid.''

Samsung Electronics, the world's second-biggest chipmaker after Intel, lost 5.7 percent to 473,500 won. Hynix Semiconductor Inc., the world's third-largest maker of computer memory chips, plunged 8.7 percent to 10,500 won.

Taiwan Semiconductor, the world's largest supplier of made- to-order chips, slid 4.5 percent to NT$53. Tokyo Electron Ltd., the world's second-largest maker of semiconductor production equipment, fell 3.8 percent to 5,850 yen. Advantest Corp., the world's biggest maker of equipment used to test memory chips, shed 4 percent to 7,000 yen.

Eyes on Intel

Intel may miss its highest sales forecasts this quarter because demand isn't as high as expected, Merrill Lynch & Co. analyst Joe Osha said. He lowered his estimate for Intel's second- quarter sales by $100 million to $7.95 billion. Intel will update investors on its business later today.

``If Intel missed that forecast, it will slow profit growth of all other chip shares, including Taiwan Semiconductor,'' said Michael On, who manages the equivalent of $30 million as a managing director of Beyond Asset Management in Taipei.

Chartered Semiconductor Manufacturing Ltd., Singapore's biggest maker of computer chips, dropped 3.6 percent to S$1.34.

CNOOC Ltd., China's largest offshore oil producer, lost 3.6 percent to HK$3.325. PetroChina Co., China's biggest oil producer, shed 3.3 percent to HK$3.65.

China's Rates

China is set to raise interest rates and electricity prices in a continuing effort to cool an overheating economy, the Post said. The decision will be announced in the next few weeks, the newspaper said, citing unidentified mainland officials.

China has no immediate plans to raise interest rates as it has other policy tools at its disposal to curb inflation, the central bank said.

Lenovo Group Ltd., China's largest personal computer maker, fell for a second day after profit missed some estimates, prompting Citigroup Inc. and Merrill Lynch (Asia Pacific) Ltd. to cut their stock forecasts. The shares slumped 9.5 percent to HK$2.15, after dropping 5 percent yesterday.

Stocks that export to China also declined. Komatsu Ltd., the world's second-largest maker of construction machinery, slid 3.9 percent to 615 yen. Hitachi Construction Machinery Co., Japan's second-biggest maker of construction machinery, shed 5.1 percent to 1,158 yen.

Posco, South Korea's largest steelmaker, lost 4 percent to 133,000 won. China is Posco's biggest export destination, accounting for 37 percent of its exports.

Mitsubishi Motors Corp., the only unprofitable Japanese passenger-carmaker, slumped 6.5 percent to 200 yen, its lowest close since Sept. 28, 2001. Japan's fifth-largest automaker will recall 116,352 vehicles to fix faults, its second recall this week.

Advantest Corp. (6857 JP)
Chartered Semiconductor Manufacturing Ltd. (CSM SP)
CNOOC Ltd. (883 HK)
Hitachi Construction Machinery Co. (6305 JP)
Hynix Semiconductor Inc. (000660 KS)
Komatsu Ltd. (6301 JP)
Mitsubishi Motors Corp. (7211 JP)
Lenovo Group Ltd. (992 HK)
PetroChina Co. (857 HK)
Posco (005490 KS)
Samsung Electronics Co. (005930 KS)
Taiwan Semiconductor Manufacturing Co. (2330 TT)
Tokyo Electron Ltd. (8035 JP)

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

Last Updated: June 3, 2004 04:47 EDT