Asian Stocks Fluctuate as Earnings Temper Goldman Sachs Cutting Japan
Asian Stocks Drop Goldman Sachs Cuts Japan GDP Forecast
Tomohiro Ohsumi/Bloomberg
Asian stocks fell, dragging the benchmark regional index lower for a second day, after Goldman Sachs Group Inc. lowered its economic forecast for Japan as the nation struggled to contain a meltdown at a nuclear plant.
Asian stocks fell, dragging the benchmark regional index lower for a second day, after Goldman Sachs Group Inc. lowered its economic forecast for Japan as the nation struggled to contain a meltdown at a nuclear plant. Photographer: Tomohiro Ohsumi/Bloomberg
Asian stocks fluctuated as better- than-estimated earnings in China and Hong Kong offset concerns economic growth in Japan will falter as the nation struggled to contain a partial meltdown at a nuclear plant.
Mitsubishi UFJ Financial Group Inc., Japan’s largest bank by market value, led declines among the nation’s biggest lenders after Goldman Sachs Group Inc. cut its forecast for the country’s economic growth. Anhui Conch Cement Co., China’s biggest cement maker, and Brilliance China Automotive Holdings Ltd. (1114), the Chinese partner of Bayerische Motoren Werke AG, climbed more than 4.7 percent after posting full-year earnings that beat estimates. Japanese stocks pared earlier declines after a stricken nuclear plant began pumping fresh water to a damaged nuclear reactor.
The MSCI Asia Pacific Index lost 0.3 percent to 133.25 as of 7:47 p.m. in Tokyo, having declined as much as 0.9 percent earlier. Almost five stocks advanced for every four that declined in the index. The gauge had its biggest weekly gain since November last week as Japan moved to stabilize nuclear reactors damaged by a March 11 earthquake and as companies from Cnooc Ltd. to Bank of China Ltd.’s earnings surpassed estimates.
“Until the reactor can be cooled automatically, the situation remains critical and it could impact company earnings,” said Takeshi Fukushima, who helps manage about $37 billion at Meiji Yasuda Asset Management Co. “However, we’re starting to find out that it probably won’t become a tragedy.”
No Ocean Leak
Japan’s Nikkei 225 (NKY) Stock Average swung between gains and losses after Tokyo Electric Power Co., operator of the crippled nuclear plant, said radioactive water hasn’t leaked into the sea. The company started using freshwater to cool spent fuel in one of the reactors, Teruaki Kobayashi, head of nuclear maintenance at Tokyo Electric, said.
The Japanese benchmark index fell as much as 1.7 percent after Goldman Sachs lowered its growth forecast for the country’s gross domestic product this year to 0.7 percent from 1.3 percent previously in the aftermath of power cuts and damage from the March 11 earthquake. It closed 0.2 percent lower after rising as much as 0.3 percent.
China’s Shanghai Composite Index dropped 0.9 percent, while Hong Kong’s Hang Seng Index was little changed. Australia’s S&P/ASX 200 Index climbed 0.5 percent, while New Zealand’s NZX 50 Index increased 0.4 percent.
Futures on the Standard & Poor’s 500 Index rose 0.1 percent today. The index slipped 0.3 percent yesterday in New York as Marriott International Inc. led consumer shares lower and concern grew that Japan is failing to contain hazardous materials at Fukushima Dai-Ichi nuclear plant.
Uncertainty ‘Very Negative’
“The situation at the nuclear plant isn’t getting better, and any improvement looks like it’ll be delayed, and that’s weighing on the stock market,” said Yoshinori Nagano, a senior strategist in Tokyo at Daiwa Asset Management Co., which oversees about $104 billion. “We still don’t know how much of a negative effect it’ll have on the economy. The uncertainty is very negative for stocks.”
Water in a tunnel outside the No. 2 reactor at the nuclear plant in northeastern Japan had radiation levels exceeding 1 sievert an hour, a spokesman for plant operator Tokyo Electric Power Co. said yesterday. A partial meltdown of fuel rods in the No. 2 reactor probably caused a jump in the readings, Japan Chief Cabinet Secretary Yukio Edano said.
Exposure to that dose for 30 minutes would trigger nausea and four hours might lead to death within two months, according to the U.S. Environmental Protection Agency.
A magnitude-9 earthquake and ensuing tsunami on March 11 knocked out power at the plant, forcing Tokyo Electric to dump thousands of tons of seawater on the complex as a stop gap cooling measure.
Tepco Pummeled
Tokyo Electric tumbled 19 percent to 566 yen at the close of trading, the lowest on record. The stock has declined 74 percent since the last market close before the earthquake.
Government data showed Japan’s unemployment rate fell in February and retail sales beat analysts’ forecasts, indicating that the economy was picking up before the earthquake and tsunami that devastated northeastern regions. Goldman Sachs said the economy will shrink next quarter.
Mitsubishi UFJ dropped 2.8 percent to 378 yen in Tokyo. Sumitomo Mitsui Financial Group Inc., Japan’s second-biggest lender by market value, slipped 1 percent to 2,623 yen. Smaller rival Mizuho Financial Group Inc. declined 2.1 percent to 140 yen.
Uranium suppliers dropped amid concern the worst nuclear disaster since Chernobyl will crimp demand for the fuel. Extract Resources Ltd. (EXT), a uranium mining company, declined 5.1 percent to A$7.80 in Sydney, while rival Paladin Energy Ltd. decreased 2.9 percent to A$3.64.
Computer Makers Drop
In Taipei, Acer Inc. (2353), the world’s second-biggest maker of personal computers, slumped 6.9 percent to NT$63.1, its lowest close since July 2009. Goldman Sachs cut its rating to “sell” from “neutral” and Citigroup Inc. said sales of notebook computers are unlikely to stage a rebound in the second half of the year. Compal Electronics Inc. (2324), the world’s second largest maker of notebook computers, slipped 2.6 percent to NT$30.
Among stocks that advanced, Anhui Conch jumped 4.7 percent to HK$45.60. The company said full-year net income increased 74 percent to 6.2 billion yuan ($945 million) from a year ago, beating the 5.4 billion yuan average estimate of 13 analysts in a Bloomberg survey.
Brilliance China Automotive surged 5.3 percent to HK$7.13. The company posted a full-year net income of 1.27 billion yuan, compared with a loss of 1.64 billion yuan in the previous year. That exceeded the average estimate of 1.09 billion yuan of 10 analysts compiled by Bloomberg.
Philippine phone company Globe Telecom Inc. jumped 7 percent to 746 pesos, the best performer on the MSCI Asia Pacific Index, on optimism industry competition will ease amid speculation Philippine Long Distance Telephone Co. may buy Digital Telecommunications Philippines Inc.
To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Toshiro Hasegawa in Tokyo at thasegawa6@bloomberg.net.
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.
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