Tags: asian | stocks | japan | china

Asian Stocks Fall Most in 7 Weeks on Japanese Yen, China Economy

Wednesday, 07 May 2014 08:48 AM

Asian stocks fell, with the regional equities benchmark index headed for its biggest drop in seven weeks, with Japanese shares declining as the yen maintained gains, and amid mounting concern China’s economy is slowing.

Panasonic Corp., a Japanese consumer electronics company that gets half its revenue overseas, dropped 2.8 percent. SoftBank Corp., which owns stake a in Alibaba Group Holding Ltd., slid 3.8 percent after the Chinese e-commerce company filed for a U.S. initial public offering. Giordano International Ltd. fell 15 percent in Hong Kong after the clothier forecast lower profit. Lynas Corp., which said it plans to defer some debt repayments and sell shares, lost 8.3 percent to extend this week’s decline in Sydney.

The MSCI Asia Pacific Index fell 1.3 percent to 137.12 as of 11:58 a.m. in Tokyo, with all 10 industry groups on the gauge falling, as markets in Japan, Hong Kong and South Korea reopened following holidays. Japan and Hong Kong equities have posted the largest declines this year among 24 developed markets tracked by Bloomberg as the yen strengthened and concern grew that Chinese economic growth is slowing.

“Investors need to remain cautious,” Matthew Sherwood, Sydney-based head of investment markets research at Perpetual Ltd., which manages about $29 billion, said in an e-mail. “They have decided to take some profits in the wake of recent upbeat sentiment.”

The U.S. trade deficit narrowed in March as exports grew by the most in nine months, the Commerce Department reported. A Purchasing Managers’ Index for services in the euro region climbed to 53.1 in April from 52.2 in March, Markit Economics said.

Yellen Testimony

Federal Reserve Chair Janet Yellen is due to testify to lawmakers today after the U.S. central bank pressed ahead April 30 with reductions to its monthly bond buying, while holding its short-term interest rate target at near zero.

Japan’s Topix index slid 2.2 percent as the yen traded at 101.60 after strengthening to a three-week high Tuesday. Most members of the Bank of Japan agreed to keep easing monetary policy until inflation stabilizes at 2 percent, according to minutes of the April 7-8 policy meeting released Wednesday.

Idemitsu Kosan Co., an oil refiner, tumbled 5 percent to 2,127 yen in Tokyo after forecasting net income that trailed estimates.

Regional Gauges

Hong Kong’s Hang Seng Index fell 1 percent, and Hang Seng China Enterprises Index of mainland shares traded in the city retreated 0.7 percent as Chinese developers dropped after the China Securities Journal said some medium and small property developers are facing liquidity problems. The Shanghai Composite Index lost 0.5 percent as a services index for China released by HSBC Holdings Plc and Markit Economics declined in April from March.

New Zealand’s NZX 50 Index rose 0.1 percent after Reserve Bank Governor Graeme Wheeler said it may sell the nation’s currency if it remains high. Australia’s S&P/ASX 200 Index retreated 1.1 percent after a report showed March retail sales rose less than economists forecast.

South Korea’s Kospi index declined 0.9 percent, while Singapore’s Straits Times Index lost 0.5 percent. Taiwan’s Taiex index slipped 0.4 percent.

Alibaba Group, China’s largest e-commerce operator, may raise as much as $20 billion via an initial public offering in the U.S., topping the $19.65 billion offering by Visa Inc. in 2008, data compiled by Bloomberg show. The company didn’t specify the number or price of shares it will offer. SoftBank, which owns 34 percent of Alibaba, slid 3.8 percent to 7,525 yen in Tokyo. Yahoo! Inc. is the second-largest investor at almost 23 percent.

Alibaba IPO

“We strongly believe that much of the good news in regards to the Alibaba IPO has been baked well into SoftBank’s share price,” said Amir Anvarzadeh, a manager of Japanese equity sales in Singapore at BGC Partners Inc. “Moreover, we also expect U.S. investors to divest from SoftBank and Yahoo as most will want direct exposure to Alibaba without the telecom businesses, which are facing pricing pressure.”

The MSCI Asia Pacific Index traded yesterday at 12.7 times estimated earnings, compared with 15.9 for the Standard & Poor’s 500 Index, according to data compiled by Bloomberg.

Futures on the S&P 500 dropped 0.1 percent today. The gauge yesterday retreated 0.9 percent as Twitter Inc. led a selloff in Internet shares while American International Group Inc. dragged down financial companies.

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Asian stocks fell, with the regional equities benchmark index headed for its biggest drop in seven weeks, with Japanese shares declining as the yen maintained gains, and amid mounting concern China's economy is slowing.Panasonic Corp., a Japanese consumer electronics...
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Wednesday, 07 May 2014 08:48 AM
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