The higher oil price ``cuts a chunk out of consumers' budgets,'' said Karl Siegling, who helps manage the equivalent of $230 million at Wilson Asset Management in Sydney. He has sold shares of companies related to household spending such as Coles Myer Ltd., Australia's biggest retailer.

The Morgan Stanley Capital International Asia-Pacific Index, which measures 945 stocks, lost 0.4 percent to 99.95 at 5:15 p.m. in Tokyo. Shares of consumer-good producers account for more than a third of the regional benchmark. Other indexes in the region dropped, while they rose in Australia, Taiwan, India, Indonesia, Thailand and the Philippines.

Oil producers such as Perth, Australia-based Woodside Petroleum Ltd. gained after crude oil for May delivery in New York climbed 0.7 percent to $53.71 a barrel yesterday, rebounding from the lowest since March 2. Oil prices have surged 44 percent from a year ago.

Japan's Nikkei 225 Stock Average declined 0.6 percent to 11,670.30, while South Korea's Kospi index dropped 0.4 percent. Both countries import almost all of their oil. Pakistan's Karachi Stock Exchange 100 Index slumped 4.2 percent, the biggest decline in Asia, after the country's central bank yesterday raised the key interest rate to curb inflation.

Shares of companies that rely on overseas sales including Toyota Motor Corp. also declined after the dollar dropped against regional currencies, including the yen and won.

Consumer Spending

Sony, the maker of the PlayStation Portable game console and Cyber-shot digital cameras, lost 1.8 percent to 4,260 yen. The world's second-biggest consumer electronics maker got about 70 percent of its sales from abroad in 2003.

Hyundai Motor, South Korea's biggest automaker, fell 0.7 percent to 57,300 won. LG Electronics Inc., the nation's second- largest electronics maker, declined 0.6 percent to 69,500 won.

Consumer sentiment has been falling in the U.S., Asia's biggest export market, as record-high gasoline prices leave households with less money to spend. The University of Michigan's confidence index dropped for a third month in March.

In Japan, household spending dropped 4.1 percent, seasonally adjusted, in February from the month before, the statistics bureau said last month. Consumer spending makes up half of Japan's economy.

High Prices

Woodside, Australia's second-largest oil and gas producer, added 1.5 percent to A$25.59. Santos Ltd., the country's No. 3 producer, gained 0.9 percent to A$9.38.

S-Oil Corp., South Korea's third-largest refiner, rose 0.9 percent to 86,400 won. CNOOC Ltd., China's third-largest oil producer, climbed 0.6 percent to HK$4.275.

``I expect oil prices to stay high for the time being,'' said Soichiro Monji, who helps oversee about $28 billion globally as senior strategist at Daiwa SB Investments Ltd. in Tokyo.

The dollar fell 0.1 percent to 107.79 yen and slipped 0.2 percent to 1,013.50 won. A lower U.S. currency means exporters get less for their dollar-denominated sales while their products become less competitive.

``A stronger yen certainly works against exporters and reduces investor appetite for their shares,'' Monji said.

Toyota, the world's biggest automaker by market value, fell 1.2 percent to 4,030 yen. The company gets as much as 70 percent of its operating profit from North America, according to Koji Endo, an analyst at Credit Suisse First Boston Japan Inc.

Kia, Chartered

Kia Motors Corp., South Korea's second-largest automaker, slipped 2 percent to 15,050 won. Samsung SDI Co., the world's largest maker of plasma display panels, dropped 1.1 percent to 98,300 won.

Chartered Semiconductor Manufacturing Ltd., Singapore's biggest chipmaker, fell 2 percent to S$1. The dollar slid 0.3 percent to S$1.6458 in Singapore, after the city-state's central bank said it will keep a policy of allowing the currency to gain to curb inflation.

LG.Philips LCD Co., the world's second-largest maker of liquid crystal displays, slid 3.9 percent to 44,900 won in Seoul.

After the market closed yesterday, LG.Philips reported a first-quarter net loss of 79 billion won ($78 million), compared with a year-earlier profit.

The company's operating loss excluding income from overseas affiliates was 162 billion won, worse than the average 97 billion won loss estimated by analysts in a Thomson Financial survey. Sales dropped 16 percent to 1.8 trillion won, the company said.

``The losses were greater than we had thought and the outlook doesn't look encouraging,'' said Jeong Jung Woo, who manages the equivalent of $494 million at Daehan Investment Trust Management Co. in Seoul.

Low Confidence

Pakistan's KSE-100 tumbled to its lowest since Feb. 11. State Bank of Pakistan yesterday raised the rate at which it lends to commercial banks by 1.5 percentage points to 9 percent, the first change since Nov. 16, 2002, and the biggest since a move to 20 percent from 17 percent in October 1996.

Pakistan Telecommunication Co., the nation's biggest phone company, dropped 5 percent to 58.10 rupees. Pakistan State Oil Ltd., the nation's biggest supplier of fuels, slid 5 percent to 374.55 rupees.

``Confidence is low,'' said Humaira Zaheer, director of research at Capital One Equities in Karachi. The market ``may extend losses for awhile.''

To contact the reporter on this story:
Darren Boey in Hong Kong at  dboey@bloomberg.net.
To contact the editor responsible for this story:
Ben Richardson at  brichardson8@bloomberg.net.