Asian stocks fell, dragging a benchmark regional index lower for a third day this week, on concern U.S. unemployment and efforts by emerging countries to tame inflation will hamper a global economic recovery.
PetroChina Co., the nation’s biggest energy producer, fell 3 percent in Hong Kong after announcing an asset purchase as oil and metal prices dropped. China Resources Land Ltd., a property developer, sank 3.6 percent. ASX Ltd., the operator of Australia’s main stock exchange, jumped 4.7 percent on speculation yesterday’s merger announcements by overseas bourses make it more likely that Australian regulators will approve its takeover by Singapore Exchange Ltd.
“Investors are worried that if inflation continues to accelerate, Asian central banks may be more aggressive in tightening monetary policy,” said Lee King Fuei, a Singapore- based fund manager at Schroders Plc which held about $292 billion as of September. “It’s also happening at a time when the global economy is not yet stable.”
The MSCI Asia Pacific Index fell 1 percent to 136.98 as of 7:48 p.m. in Tokyo, with more than twice as many shares declining as advancing. All 10 industry groups dropped.
The index, which rose 0.1 percent earlier today, climbed 1.4 percent last week for the sharpest weekly gain this year as improving earnings outweighed concern over anti-government protests in Egypt.
Emerging Markets Drop
Benchmark indexes in developing nations led declines. The MSCI Emerging Markets Index retreated 1.9 percent in its sixth straight day of losses. The Philippine Stock Exchange Index slumped 2.7 percent and Taiwan’s Taiex index lost 1.9 percent.
South Korea’s Kospi Index fell 1.8 percent and Hong Kong’s Hang Seng index slipped 2 percent. China’s Shanghai Composite index rose 1.6 percent, erasing an earlier loss of 0.5 percent.
Japan’s Nikkei 225 Stock Average slid 0.1 percent, while the broader Topix index gained 0.3 percent. The country’s stock exchanges will be closed tomorrow for a public holiday. Australia’s S&P/ASX 200 Index climbed 0.2 percent.
Futures on the Standard & Poor’s 500 Index slipped 0.5 percent today. The index dropped 0.3 percent yesterday in New York amid growing investor concern that accelerating global inflation will lead to higher borrowing costs.
Federal Reserve Chairman Ben S. Bernanke said the U.S. unemployment rate is likely to remain high “for some time” even after the biggest two-month drop in the jobless rate since 1958.
PetroChina lost 3 percent to HK$10.22 in Hong Kong. The company agreed to buy a 50 percent stake in Encana Corp.’s Cutbank Ridge gas assets in North America for C$5.4 billion ($5.4 billion) in its largest overseas acquisition.
Aluminum Corp. of China Ltd., the country’s No. 1 producer of the metal, sank 2.5 percent to HK$7.34. Mitsubishi Corp., Japan’s largest commodities trader, lost 0.5 percent to 2,331 yen in Tokyo.
Crude oil for March delivery slipped 0.3 percent to $86.71 a barrel in New York yesterday, the lowest settlement price since Jan. 27. The London Metal Exchange Index of prices for six industrial metals including copper and aluminum dropped 1.2 percent yesterday, the sharpest retreat in two weeks.
Emerging Markets Decline
SM Prime Holdings Inc., the Philippines’ biggest shopping mall operator, sank 4.9 percent to 10.20 pesos. Samsung Electronics Co., the world’s second-largest maker of mobile phones, dropped 2.5 percent to 936,000 won in Seoul. PT Bumi Resources, Indonesia’s biggest coal producer, slumped 1.9 percent to 2,600 rupiah. China Resources Land fell 3.6 percent to HK$12.88 in Hong Kong.
The People’s Bank of China raised the one-year lending rate by a quarter point to 6.06 percent and the one-year deposit rate an equivalent amount to 3 percent on Feb. 8 to curb inflation.
The Bank of Korea may lift its benchmark policy rate by a quarter percentage point to 3 percent at its meeting tomorrow, according to nine of 12 analysts surveyed by Bloomberg News. Also, the Philippine central bank meets on interest rates today.
“We continue to see funds flow out from Asian and emerging markets,” said Castor Pang, Hong Kong-based research director at Cinda International Holdings Ltd. “Inflationary pressure in emerging markets still high. That will have a negative impact on stock markets.”
The MSCI Asia Pacific Index increased 0.5 percent through yesterday in 2010, compared with gains of 5 percent by the S&P 500 and 4.2 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 14 times estimated earnings on average, compared with 13.8 times for the S&P 500 and 11.4 times for the Stoxx 600.
Deutsche Boerse AG is in advanced talks to buy NYSE Euronext in an all-stock transaction that would create the world’s biggest exchange operator, accelerating a day of takeovers yesterday that began with London Stock Exchange Group Plc’s acquisition of Canada’s TMX Group Inc. The latest mergers may bolster the case for approving the takeover of ASX in pursuit of the Australian government’s stated aim of turning Sydney into a global financial hub.
ASX, operator of Australia’s biggest bourse, jumped 4.7 percent to A$38.41 in Sydney. Singapore Exchange’s shares rose as much as 2.3 percent.
“This gives those in favor of the SGX deal a little more ammunition,” said Jason Teh, who helps manage about $3.1 billion at Investors Mutual Ltd. in Sydney. “It shows that the rest of the world is clearly moving in this direction and the question now is whether Australia will adopt what’s happening elsewhere in the world.”
Osaka Securities Exchange Co. advanced 1.5 percent to 419,500 yen on the Jasdaq exchange. Hong Kong Exchanges & Clearing Ltd., currently the world’s largest exchange company by market value, fell 3.6 percent, the biggest intraday decline since October, to HK$169.90. The bourse operator said today it remains open to “compelling” mergers today.
“This consolidation theme is going to continue,” said Chris Hall, who helps manage $4 billion at Argo Investments Ltd. in Adelaide, Australia.“It’s inevitable that you have to have consolidation given that fund flows are a global game. I think consolidation is going to continue globally.”
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