Most Asian Stocks Fall as Japan GDP Report Fuels Economic Growth Concerns

Most Asian stocks fell, led by Japanese shares, after the country’s economy grew at the slowest pace in three quarters. The Shanghai Composite Index posted its biggest advance this month as China overtook Japan to be the world’s second-largest economy last quarter.

Sony Corp., which makes Bravia televisions, retreated 3 percent, while Honda Motor Co. sank 0.9 percent in Tokyo. China Cosco Holdings Co., the world’s largest operator of dry-bulk ships, jumped by the 10 percent daily limit in Shanghai as commodity-freight rates climbed. Hong Kong’s Sun Hung Kai Properties Ltd., the world’s biggest developer by market value, slumped 4.1 percent after the government introduced measures to cool home prices.

“We need to see some sort of catalyst to help investor sentiment recover, especially a good economic indicator from the U.S.,” said Yoshinori Nagano, a senior strategist in Tokyo at Daiwa Asset Management Co., which oversees about $104 billion. “The Japanese economy is simply weak.”

About five stocks declined for every four that advanced in the MSCI Asia Pacific Index, which was little changed at 117.01 as of 7:35 p.m. in Tokyo. The retreat extended last week’s 3.7 percent slump, the most since May, as economic reports indicated the global recovery is faltering.

Japan’s Nikkei 225 Stock Average declined 0.6 percent. The country’s economy grew at less than a fifth of the pace economists estimated last quarter, pushing it into third place behind the U.S. and China. The Nikkei 225 has fallen 19 percent from an 18-month high on April 5.

China Stocks Advance

South Korea’s Kospi index sank 0.2 percent. Australia’s S&P/ASX 200 Index retreated 0.5 percent. Hong Kong’s Hang Seng Index gained 0.2 percent.

The Shanghai Composite rallied for a second day, advancing 2.1 percent, as higher commodity-freight rates boosted shipping companies and rising power demand drove energy producers higher.

Futures on the Standard & Poor’s 500 Index slipped 0.1 percent. The index dropped 0.4 percent on Aug. 13 after a report from the Commerce Department showed retail purchases increased 0.4 percent in July, compared with economists’ estimates of a 0.5 percent gain.

Government figures today showed Japan’s gross domestic product rose an annualized 0.4 percent in the three months ended June 30, less than the median economist estimate in a Bloomberg News survey for annual growth of 2.3 percent.

‘Long Way’

Sony slipped 3 percent to 2,535 yen. Honda retreated 0.9 percent to 2,765 yen. Hyundai Motor Co., South Korea’s largest automaker, sank 0.4 percent to 137,000 won in Seoul.

“U.S. retail sales were pretty bad,” said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo. “There’s a long way to go before we have a self-sustaining recovery in the economy.”

The MSCI Asia Pacific has slumped 8.8 percent from its high for the year on April 15 as disappointing economic reports in the U.S., Chinese measures to curb property-price inflation and Europe’s debt crisis fueled concern global growth may stall.

Companies in the index trade at an average of 17.1 times profit from the past twelve months, according to data compiled by Bloomberg. That compares with a median multiple of 32 from the past 15 years, the data show.

Hong Kong’s Sun Hung Kai Properties dropped 4.1 percent to HK$110, the largest loss since May 25. Cheung Kong (Holdings) Ltd., the developer controlled by billionaire Li Ka-shing, slumped 2.3 percent to HK$99.35.

Land Sales

Down payments for apartments costing HK$12 million ($1.54 million) or more will rise to 40 percent, from 30 percent, with immediate effect, Hong Kong Monetary Authority Chief Executive Norman Chan said Aug. 13. The government will increase land sales next year, Financial Secretary John Tsang said earlier.

Tsang said last week that home prices are approaching the level of 1997, the height of a previous bubble that was followed by a six-year slump.

CLP Holdings Ltd., Hong Kong’s biggest power producer, gained 1.6 percent to HK$58.05. The company reported better- than-estimated profit during the city’s trading break. A gauge of utility companies in the MSCI Asia Pacific increased 0.8 percent, the most of 10 industries.

Belle International Holdings Ltd., a retailer of women’s shoes, and China Coal Energy Co. advanced after Hang Seng Indexes Co. said both companies will join Hong Kong’s equity benchmark. Belle International jumped 2.9 percent to HK$13.34.

China Coal, a unit of the country’s second-biggest producer of the fuel, rose 3.2 percent to HK$10.84. The company reported a 25 percent jump in first-half net income.

Largest Share Sale

Agricultural Bank of China Ltd. was the fourth most-active stock by trading volume among Chinese shares after boosting the size of its initial public offering to $22.1 billion. The bank sold more stock in Shanghai to make its IPO the world’s largest first-time share sale. The stock rose 0.7 percent to 2.71 yuan.

Shipping stocks in Asia rallied on speculation they will benefit from rising freight rates. The Baltic Dry Index, a measure of commodity-shipping costs, rose for a seventh day on Aug. 13 in London.

China Cosco surged 10 percent to 10.31 yuan in Shanghai. China Shipping Development Co. rose 9 percent to 10.22 yuan. STX Pan Ocean Ltd., South Korea’s biggest bulk carrier, gained 2 percent to 12,600 won.

Baoding Tianwei Baobian Electric Co., whose units make solar panels, climbed 6 percent to 26.34 yuan. The China Securities Journal reported the government may introduce a 10- year development plan for the alternative energy industry at the end of next month.

Australia’s Woodside Petroleum Ltd., the country’s No. 2 oil and gas producer, jumped 3.8 percent to A$43.10 after making a gas discovery.

AWB Ltd., Australia’s largest wheat exporter, surged 30 percent to A$1.42 for the biggest gain in the S&P/ASX 200. Agrium Inc. offered A$1.2 billion ($1.1 billion) in cash, or A$1.50 a share, for the company. That’s 38 percent more than a bid by GrainCorp Ltd., which values the stock at A$1.09 a share, based on Aug. 13 closing prices.

To contact the reporters for this story: Lynn Thomasson in Hong Kong at lthomasson@bloomberg.net; Monami Yui in Tokyo at myui1@bloomberg.net.

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