Asian Stocks Tumble on U.S. Growth, Europe Debt Concerns; Canon, BHP Slump
Asian stocks tumbled, dragging down the MSCI Asia Pacific Index by the most in 14 months after a U.S. jobs report missed economist estimates and concern grew that Europe’s sovereign-debt crisis is spreading.
Tokyo-based Canon Inc., which gets 78 percent of its sales outside Japan, slid 5.3 percent after a government report showed U.S. employers hired fewer workers in May than forecast and the euro slumped versus the yen. HSBC Holdings Plc, Europe’s largest bank, lost 3.9 percent in Hong Kong, amid concern of losses in Hungary, which an official said was in a “grave situation.” BHP Billiton Ltd., the world’s No. 1 mining company, sank 3.5 percent in Sydney on lower commodity prices.
The MSCI Asia Pacific Index retreated 3.3 percent to 109.65 as of 7:11 p.m. in Tokyo, the biggest decline since March 30, 2009. The gauge has slumped 15 percent from its high this year on April 15 amid growing concern the Greece-triggered sovereign debt crisis is spilling over to other European nations.
“What I’m afraid is that the volatility of the euro can trigger turmoil in the financial markets, prompting investors to reduce risk assets including stocks,” said Akio Yoshino, chief economist in Tokyo at Societe Generale Asset Management (Japan) Inc., which manages the equivalent of $18 billion. “We might as well think Hungary is in the same situation as Greece. I remember Greece’s announcement on its deficit didn’t appear to be a big deal in the media coverage at first.”
The Nikkei 225 Stock Average tumbled 3.8 percent in Tokyo, while Australia’s S&P/ASX 200 Index dropped 2.8 percent. The Kospi Index lost 1.6 percent in Seoul. Hong Kong’s Hang Seng Index declined 2 percent and China’s Shanghai Composite Index decreased 1.6 percent.
Taiwan’s Taiex index slumped 2.5 percent. Hon Hai Precision Industry Co., the world’s largest contract electronics maker, sank 5.6 percent after saying it will double the base wage for factory workers at a Chinese factory.
Futures on the Standard & Poor’s 500 Index were little changed today. The index fell 3.4 percent on June 4 after Labor Department figures showed the country’s private payrolls rose by 41,000, trailing the 180,000 gain forecast by economists.
Li & Fung Ltd., which got about 64 percent of sales in the U.S. last year, dropped 2.1 percent to HK$34.50. Yue Yuen Industrial (Holdings) Ltd., a shoe manufacturer that got 31 percent of sales in the U.S. in the year ended Sept. 30, slid 0.6 percent to HK$23.45.
Japanese exporters including Canon slumped as the yen appreciated to as much as 108.08 against the euro today, compared with 112.88 at the close of stock trading in Tokyo on June 4. Against the dollar, the Japanese currency strengthened to as much as 90.98 from 92.69. A stronger yen reduces the value of overseas income at Japanese companies when converted into their home currency.
Canon, the world’s biggest maker of digital cameras, sank 5.3 percent to 3,675 yen in Tokyo. Toyota Motor Corp., which gets 71 percent of its revenue overseas, slumped 4 percent to 3,210 yen and was the heaviest drag on MSCI’s Asian gauge, followed by BHP. Honda Motor Co., Japan’s No. 2 carmaker, retreated 4.6 percent to 2,696 yen.
The euro weakened on June 4 after Peter Szijjarto, a spokesman for the Hungarian Prime Minister, said the nation’s economy is in a “very grave situation” and that it was “no exaggeration” to talk about a default. State Secretary Mihaly Varga said the next day that comments about a possible default were “unfortunate.”
HSBC, which is based in London, fell 3.9 percent to HK$70.65. Standard Chartered Plc, a British bank lender that makes at least three quarters of its profit in Asia, slumped 4.3 percent to HK$182.60.
Bank Share Sales
“There’s a slew of financial companies that own Hungarian bonds, and loans to those businesses will be reduced or cut,” said Societe Generale’s Yoshino. “That will distract the money flows and destabilize the entire euro system.”
Chinese banks declined amid share-sale plans. Bank of Communications Co., the nation’s fourth-largest lender, dropped 3.3 percent to 6.187 yuan in Shanghai after saying it expects to raise about $4.8 billion in a rights issue starting this month.
Industrial & Commercial Bank of China Ltd., the nation’s largest lender, dropped 2.4 percent to 4.12 yuan. Agricultural Bank of China Ltd. will sell a 15 percent stake in an initial public offer, according to a prospectus published June 4. The lender will likely raise no more than $22 billion, Haitong Securities Co.
Gauges of raw-material producers and energy companies in the MSCI Asia Pacific Index slumped more than 3.5 percent after commodity prices extended declines from June 4. Copper futures in New York sank 2.5 percent in after-hours trading, while crude oil dropped 1.7 percent.
BHP dropped 3.5 percent to A$36.54 in Sydney. Rio Tinto Group, the world’s No. 3 mining company, lost 3 percent to A$65.55. PetroChina Co., the country’s biggest energy company, fell 3.2 percent to HK$8.26 in Hong Kong.
In Taipei, Hon Hai, the manufacturer of Apple Inc. iPhones, sank 5.6 percent to NT$117.50. The company said it will more than double base salaries at its Shenzhen factories over four months following a spate of suicides. Foxconn Technology Co., an affiliate of Hon Hai that makes metal computer cases, dropped by its 7 percent limit to NT$106.50.
Hitachi Ltd. slumped 7 percent to 345 yen and was the second most-active stock by value in Japan after Toyota. The company may lose a 1 trillion-yen ($11 billion) contract to supply intercity trains in the U.K. after the country’s transport secretary said he will overhaul plans to renew railway carriages, the Asahi newspaper reported June 5.