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Asian Stocks Fall From 18-Month High on Europe Concerns

By Adam Haigh
February 05, 2013 5:50 AM EST 16 Comments
Asian Stocks Decline From 18-Month High on Europe Debt Concerns
Asian Stocks Decline From 18-Month High on Europe Debt Concerns

Asian stocks fell, dragging the regional benchmark index down from an 18-month high, amid renewed concern about Europe’s debt crisis. Hong Kong shares tumbled the most since November amid speculation the government may act to cool the property market.

Konica Minolta Holdings Inc. (4902), a Japanese maker of imaging equipment that gets 28 percent of its sales in Europe, dropped 3.1 percent. Macquarie Group Ltd. (MQG) lost 4.1 percent amid concern full-year earnings may trail the Australian lender’s forecast. China Petroleum & Chemical Corp. (600028) fell 6.4 percent in Hong Kong after Asia’s biggest refiner said it plans to sell shares worth HK$24 billion ($3.1 billion) at a discount.

The MSCI Asia Pacific Index (MXAP) slid 1.4 percent to 131.82 as of 7:50 p.m. in Tokyo, with almost four stocks falling for each that rose.

“It’s a return of worries about Europe,” said Shane Oliver, Sydney-based head of strategy at AMP Capital Investors Ltd., which has about $126 billion under management. “The market got very stretched and was due for a pullback, it was just a question of what the trigger would be. We could still see some further weakness this month.”

The MSCI Asia Pacific Index, the benchmark regional equities gauge, climbed 12 percent through yesterday since the Nov. 14 announcement of Japanese elections sparked optimism a new government would lead the country out of recession and deflation.

That pushed valuations on the gauge to 14.8 times average estimated earnings compared with 13.5 for the Standard & Poor’s 500 Index and a multiple of 12.1 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

U.S. Futures

Futures on the S&P 500 rose 0.4 percent. The measure sank 1.2 percent yesterday, its biggest decline since November, as bond yields in Spain and Italy soared.

HSBC Holding’s Plc, Europe’s largest lender, dropped 2.7 percent to HK$85.45 in Hong Kong. Exporters to Europe fell in Japan. Konica Minolta lost 3.1 percent to 722 yen and NTN Corp., a bearing maker that gets a quarter of its sales in Europe, slid 5.2 percent to 273 yen.

Japanese shares fell, with the Nikkei 225 Stock Average (NKY) slipping 1.9 percent after closing yesterday at its highest level since April 2010. Volume was 65 percent above its 30-day average, according to data compiled by Bloomberg.

South Korea’s Kospi Index lost 0.8 percent. Singapore’s Straits Times Index fell 0.8 percent and Taiwan’s Taiex Index dropped 0.5 percent. The Shanghai Composite gained 0.2 percent.

Hong Kong’s Hang Seng Index (HSI) slid 2.3 percent, with volume 56 percent above its 30-day average. Hong Kong’s market will be shut for three days next week for the Lunar New Year holidays, while markets in mainland China will be closed for the whole week.

Rajoy, Berlusconi

Spanish Premier Mariano Rajoy faces opposition calls to resign amid contested reports about illegal payments, and Italy’s Silvio Berlusconi narrowed the front-runner’s lead before elections this month.

Australia’s S&P/ASX 200 Index lost 0.5 percent, maintaining declines after the Reserve Bank of Australia kept its benchmark cash rate at 3 percent as forecast by 24 of the 28 economists in a Bloomberg survey. The central bank said Chinese economic growth has stabilized at a “fairly robust” pace.

Developers led the rout in Hong Kong, with Sun Hung Kai Properties Ltd., the world’s biggest builder by value, dropping 3.2 percent to HK$121.30. New World Development Co., which led gains on the Hang Seng Index this year through yesterday with a 20 percent increase, fell 4 percent to HK$13.84.

Property Measures

“Lots of people are taking profits and worrying there will be measures from the Hong Kong government to cool down the local property market,” Steven Leung, a Hong Kong-based institutional sales director at UOB Kay Hian Ltd., said. The Hang Seng Index has traded above its 50-day moving average since September.

Sinopec, as China Petroleum is known, plans to sell 2.85 billion Hong Kong-traded shares at HK$8.45 each, 9.5 percent less than yesterday’s close, according to a filing after the market closed yesterday. The stock fell 6.4 percent to HK$8.74.

Macquarie dropped 4.1 percent to A$37.16. Net income will rise to about A$803 million ($838 million) for the year ending March 31 from an eight-year low of A$730 million a year earlier, Bloomberg calculations based on the company’s forecast show. Macquarie was expected to post full-year adjusted earnings of A$838.5 million, according to the median of 12 analyst estimates compiled by Bloomberg.

Hitachi Ltd., Japan’s second-largest manufacturer, lost 6.4 percent to 531 yen after cutting its full-year forecast for operating profit.

HTC Corp. (2498) sank 6.8 percent, the most since Nov. 13, to NT$266 after the smartphone maker said first-quarter revenue will be NT$50 billion ($1.7 billion) to NT$60 billion, below the NT$64.8 billion average of 19 analyst estimates compiled by Bloomberg.

To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net

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