Asia Stocks Drop as Materials Fall, China Banks Said to Halt Some Lending
Asian stocks fell, the regional benchmark index declining for a second day, as oil and metal prices dropped and after a report that Chinese banks suspended some lending fuelled speculation the country will act further to cool its economy.
Industrial & Commercial Bank of China Ltd. declined 1.5 percent in Hong Kong after the state-run China Real Estate Business newspaper said the biggest four banks won’t lend to developers until next year. China Construction Bank Corp. dropped 0.4 percent. China’s lenders pared losses after news reports they denied the loan halt. Newcrest Mining Ltd., Australia’s biggest gold producer, lost 2 percent in Sydney while Cnooc Ltd., China’s No. 1 offshore oil explorer, sank 1.8 percent in Hong Kong after commodity prices slumped on Nov. 12.
The MSCI Asia Pacific Index declined 0.4 percent to 131.66 as of 4:13 p.m. in Tokyo, with about the same number of stocks falling as rising. Energy, material and financial stocks paced declines with concerns about the sustainability of the global recovery intensifying as Ireland continued to resist pressure to accept European help with its sovereign debt.
“The market’s focus is firmly back on how secure Chinese growth is in the light of what’s come out on to the radar, and what policy measures are likely to be implemented in response,” said Tim Schroeders, who helps manage about $1 billion at Pengana Capital Ltd. in Melbourne. “We may well be headed for another period of consolidation as investors move to lock in gains against a backdrop of rising uncertainty in the near term.”
Japan Growth
China’s Shanghai Composite Index rose 1 percent after dropping as much as 1.5 percent earlier today. Hong Kong’s Hang Seng Index lost 0.6 percent. Japan’s Nikkei 225 Stock Average rose 1.1 percent as a report showed the nation’s economy grew at a faster-than-estimated pace in the third quarter.
Australia’s S&P/ASX 200 Index slipped 0.1 percent, while New Zealand’s NZX 50 Index added 0.5 percent in Wellington as third-quarter retail sales unexpectedly increased.
Futures on the Standard & Poor’s 500 Index gained 0.2 percent today. In New York, the index declined 1.2 percent to 1,199.21 on Nov. 12 amid concern China may raise interest rates to curb inflation.
Industrial & Commercial Bank dropped 1.5 percent to HK$6.51 in Hong Kong. China Construction Bank fell 0.4 percent to HK$7.40. China Overseas Land & Investment Ltd., a builder controlled by China’s construction ministry that makes 98 percent of its revenue in the country, fell 2.7 percent to HK$16.02 in Hong Kong.
Loan Approvals
Approvals of new loans to property developers by the country’s four largest banks ceased since the end of October after they met their allotted targets for the year, the state- run China Real Estate Business reported, citing unidentified executives at the banks.
Agricultural Bank of China Ltd. and China Construction Bank denied that loans to property developers have been halted, Caixin Online reported today, citing unidentified people at the banks. Agricultural Bank’s loans to developers next year will be about 13 percent to 15 percent of total loans, the report said, citing one of the people.
The Shanghai Composite Index tumbled 5.2 percent on Nov. 12, the steepest drop since August 2009, on speculation an interest- rate increase was imminent.
“The plunge may not fully reflect further tightening by the government such as interest-rate and reserve requirement increases,” said Zhao Zifeng, who helps oversee about $10.2 billion at China International Fund Management Co. “It’s better to be cautious.”
The MSCI Asia Pacific Index increased 9.7 percent through Friday in 2010, compared with gains of 7.5 percent by the S&P 500 and 6.4 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at an average 14.5 times estimated earnings, compared with 14.1 times for the S&P 500 and 12.2 times for the Stoxx 600.
Oil, Metals
Crude oil for December delivery dropped 3.3 percent to $84.88 a barrel in New York on Nov. 12. The London Metal Exchange Index of prices for six industrial metals including copper and aluminum tumbled 3 percent amid concern that China’s attempts to rein in inflation will cool demand for industrial metals.
BHP Billiton Ltd. slipped 0.4 percent to A$44.14 in Sydney. The world’s largest mining company resumed a share buyback after abandoning its hostile $40 billion takeover offer for Canada’s Potash Corp. of Saskatchewan Inc. in the face of government opposition.
Newcrest Mining Ltd. sank 2 percent to A$41.66 in Sydney, and rival St. Barbara Ltd. lost 5 percent to 47.5 Australian cents after gold futures for December delivery fell 2.7 percent in New York on Nov. 12.
Woodside Petroleum Ltd., Australia’s second-biggest oil and gas producer, dropped 1.4 percent to A$42.49. Cnooc declined 1.8 percent to HK$17.14 in Hong Kong and PetroChina Co., Asia’s largest company by market value, sank 2 percent to HK$10.06.
Takeda Speculation
Takeda Pharmaceutical Co. dropped 0.5 percent to 3,920 yen in Tokyo. Spokeswoman Mihoko Shinomiya declined to comment on a report in the Mail on Sunday yesterday that said it had started talks with Genzyme Corp. to buy the U.S. drugmaker for more than $18.5 billion.
Among stocks that rose today, Fast Retailing Co., Japan’s biggest clothing chain operator, advanced 2.4 percent to 12,500 yen in Tokyo and Konami Corp., a video-game developer, gained 2.8 percent to 1,534 yen.
Japan’s economy grew at a faster pace in the third quarter as consumer spending increased, shielding the expansion from a stronger yen and export slowdown that are likely to have a greater impact this quarter.
Gross domestic product rose an annualized 3.9 percent in the three months ended Sept. 30, following a revised 1.8 percent expansion in the previous quarter, the Cabinet Office said in Tokyo today. The median forecast of 21 economists surveyed by Bloomberg News was for a 2.5 percent increase.
AXA Asia Pacific surged 6.8 percent to A$6.17 in Sydney. AMP Ltd., Australia’s second-biggest asset manager, and France’s Axa SA bid at least A$13.3 billion ($13.1 billion) for the company, about 20 percent more than an initial offer that was rejected a year ago. AMP’s bid matches a takeover offer from National Australia Bank Ltd. that the country’s competition regulator rejected two months ago.
To contact the reporters for this story: Shani Raja in Sydney at sraja4@bloomberg.net.
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.
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