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By Bloomberg

Asian stocks slipped, heading for their third weekly drop this month, as a surprise drop in a Chinese manufacturing gauge threatened to worsen a commodity rout. Copper slumped to a six-year low and gold slid to the lowest since 2010.

The MSCI Asia Pacific Index fell 0.7 percent by 12:46 p.m. in Hong Kong, with technology and mining shares driving the gauge down 1.4 percent this week. Copper futures lost 0.3 percent as Goldman Sachs Group Inc. forecast further declines and spot gold was down 1.1 percent. U.S. oil was below $49 a barrel after capping a 20 percent loss from its recent high on Thursday. The Australian dollar weakened as much as 1.2 percent to 72.56 U.S. cents, the least since April 2009.

A private gauge of Chinese manufacturing fell to the lowest in 15 months, with similar measures for Japan, the U.S. and euro area due. The Bloomberg Commodity Index slumped to a 13-year low as concern over supply gluts sent metals and crops tumbling. The focus will shift to next week’s Federal Reserve policy meeting as a stronger dollar has aggravated raw material declines.

The manufacturing figure “was rather poor and surprised most analysts,” said Gerry Alfonso, a sales trader at Shenwan Hongyuan Group Co. in Shanghai. “If that trend continues over the next few months then it would reasonable to assume that the economy was in a weaker shape than many analysts forecasted.”

Chinese Economy

Hong Kong’s Hang Seng Index slumped 0.9 percent as the preliminary Purchasing Managers’ Index from Caixin Media and Markit Economics was at 48.2 for July, down from 49.4 the previous month. The median estimate in a Bloomberg survey was for an increase to 49.7. Numbers below 50 indicate contraction. The Shanghai Composite Index, subject to trading restrictions, gained 1.1 percent. Japan’s Topix index lost 0.6 percent as Korean stocks sank 0.8 percent. Australia’s benchmark lost 0.5 percent as BHP Billiton Ltd. fell 1 percent.

“Commodities have been under pressure due to strong dollar and weak Chinese economy, while oil entered a bear market, so we should expect continued pressure in the commodity space,” said John Spallanzani, chief macro strategist in New York at GFI Group Inc.

Nasdaq 100 Index futures climbed 0.1 percent after Amazon.com Inc. soared in extended trading on a surprise profit. The Standard & Poor’s 500 Index slipped 0.6 percent on Thursday as disappointing earnings from Caterpillar Inc. and 3M Co. sent their stocks down at least 3.6 percent.

Dollar Strength

The Bloomberg Dollar Spot Index has held on to its gains this week, trading close to a three-month high with odds the Fed will raise rates in September for the first time since 2006 at 50 percent. The New Zealand dollar fell 0.4 percent versus the greenback, while the Malaysian ringgit and the South Korean won both slid 0.3 percent.

Spot gold headed for the longest run of weekly losses since 2012 as a drop in U.S. jobless claims supported the case for higher Fed rates. Copper in London slid as Freeport-McMoRan Inc., the biggest publicly traded producer of the metal, said it is weighing asset sales and the prospect of curtailing operations in the face of lower commodity prices. Nickel fell 1 percent. Corn for December delivery declined 0.6 percent.

West Texas Intermediate rose 0.4 percent, trimming its weekly loss to 5 percent. U.S. inventories unexpectedly rose by 2.47 million barrels last week, a government report showed on Wednesday. Stockpiles, which had been forecast to fall, remain almost 100 million barrels above the five-year average.

The Bloomberg Commodity Index fell 0.2 percent. Iron ore futures on the Dalian Commodity Exchange fell 1.3 percent. Prices for the steel-making material are sinking as the world’s largest producers including Rio Tinto Group and BHP Billiton Ltd. boost output. Supplies will expand further while demand is weak, according to Ivan Szpakowski, a commodity strategist at Citigroup Inc. in Hong Kong. “Our most-preferred trade at this point would be short iron ore,” he said.