Asian stocks fall for fourth day as consumer companies lead drop
By Bloomberg
Asia-Pacific stocks fell a fourth day, with the benchmark index heading for its lowest close in almost four weeks, after the Standard & Poor's 500 Index retreated from a record and as consumer shares slipped.
Calbee Inc., Japan's largest seller of potato chips, dropped 3.2 percent. Newcrest Mining Ltd., Australia's biggest gold producer, slid 2 percent after the price of bullion closed yesterday at a three-month low. Honda Motor Co., a carmaker that gets about 84 percent of sales abroad, added 1.1 percent as Japan's currency touched the weakest in almost six years.
The MSCI Asia Pacific Index slipped 0.4 percent to 147.76 as of 5:05 p.m. in Tokyo, heading for its lowest close since Aug. 13. The equity gauge rose 14 percent from a February low through yesterday amid signs the U.S. economy is strengthening and as China introduced stimulus. The S&P 500 retreated from an all-time high yesterday following a five-week rally.
"The market is taking its lead from the U.S.," Daphne Roth, head of Asian equity research at ABN Amro Private Banking, which manages about $218 billion said by phone. "We're seeing a temporary consolidation after the recent rally. Global economic growth is still on track. We're still overweight on equities."
New Zealand's NZX 50 Index slipped 0.3 percent. The Jakarta Composite Index and the Philippine Stock Exchange Composite Index each declined 0.8 percent. India's S&P BSE Sensex index dropped 0.4 percent. Taiwan's Taiex index and Singapore's Straits Times Index each added 0.3 percent. Australia's S&P/ASX 200 Index rose 0.6 percent. China's Shanghai Composite Index closed little changed. Markets in South Korea and Hong Kong are closed for a holiday.
Topix Gains
Japan's Topix index climbed 0.1 percent, paring gains of as much as 0.5 percent, after the yen touched its lowest since October 2008.
"The weaker yen will steadily contribute to exporters' earnings," said Toshihiko Matsuno, chief strategist at SMBC Friend Securities Co. in Tokyo. "We're getting closer to an end to tapering and the raising of interest rates in the U.S., so this yen weakening is set to continue."
While the Bank of Japan maintained an unprecedented level of stimulus as Asia's second-largest economy weakened, the Federal Reserve has been winding back its stimulatory bond buying program this year and is due to report on the outlook for monetary policy next week.
Relative Value
The MSCI Asia Pacific Index traded at 13.7 times estimated earnings at the last close, compared with 16.7 for the S&P 500 and 15.5 for the Stoxx Europe 600 Index.
Futures on the S&P 500 were little changed today. The U.S. equity benchmark gauge retreated 0.3 percent as declines in energy companies along with oil prices overshadowed a rally by Yahoo! Inc.
European Union governments abruptly put on hold for at least a "few days" new sanctions against Russia, allowing more time to assess the viability of a cease-fire in Ukraine without risking further trade retaliation by the Kremlin.
Consumer companies led declines among the 10 industry groups on the MSCI Asia Pacific Index. Calbee dropped 3.2 percent to 3,380 yen in Tokyo, the biggest decline since March 14. NH Foods Ltd., a producer of processed meat products, slipped 2.5 percent to 2,121 yen.
Gold producers dropped as the bullion traded near the lowest since June 9. Newcrest slipped 2 percent to A$10.51 in Sydney. Alacer Gold Corp. fell 2.2 percent to A$2.28.
MMC Slumps
Okuma Corp. dropped 5 percent to 803 yen in Tokyo after Credit Suisse Group AG cut its rating on the machine-tools maker to underperform from outperform and reduced its share-price forecast to 750 yen from 1,300 yen.
MMC Corp., which has interests in ports and utilities, sank 4.1 percent to 2.56 ringgit in Malaysia, extending losses for a second day. The Edge Malaysia reported over the weekend that construction of its unit Malakoff Corp.'s coal-fired power plant may be delayed by more than six months. Malakoff may have to pay the government 110 million ringgit ($34.5 million) as a result of the delay, according to the report.
Japanese exporters advanced. Honda climbed 1.1 percent to 3,592.5 yen. Mazda Motor Corp., which gets three quarters of its sales overseas, gained 1.6 percent to 2,569 yen. Sony Corp., the maker of PlayStation game consoles, added 1.2 percent to 2,042 yen.
SoftBank Corp. jumped 4.5 percent to 7,969 yen, extending its two-day gain to 6.7 percent, after Alibaba Group Holding Ltd., in which the Tokyo-based phone carrier owns a stake, unveiled details of its initial share sale.