Asian Stocks Fall Amid Global Recovery Concern; Toyota Slides on Forecast
Asian stocks dropped, extending the regional benchmark index’s longest streak of weekly losses since October 2008, amid concern the global economy is slowing.
Toyota Motor Corp. (7203), the world’s biggest carmaker by revenue, declined 2.4 percent after forecasting a decline in profit. Bridgestone Corp., Japan’s No.1 tiremaker by market capitalization, slid 2.5 percent after Japan’s machinery orders fell in April, missing economist forecasts for a gain. In Taipei, HTC Corp. (2498), a maker of smartphones using operating systems from Google Inc. and Microsoft Corp., dropped 6.9 percent after UBS AG said the company cut around 1 million units of orders across different models. Taiwan Semiconductor Manufacturing Co. fell 0.8 percent after reporting sales fell in May from a month earlier.
“Downward pressure on stocks is building -- make no mistake about it,” said Hideo Arimura, who helps oversee about $2.2 billion at Mizuho Asset Management Co. in Tokyo. “The consensus is bearish. There’s no good news coming out.”
The MSCI Asia Pacific Index fell 0.5 percent 131.36 as of 7:24 p.m. in Tokyo, extending last week’s 1.4 percent decline. About two stocks fell for each that rose in the gauge. The measure has lost more than $461 billion in market capitalization since this year’s peak on May 2, amid disappointing economic data, capped by a jobs report that showed U.S. companies hired fewer workers than estimated.
A “perfect storm” of fiscal woe in the U.S., a slowdown in China, European debt restructuring and stagnation in Japan may converge on the global economy, New York University professor Nouriel Roubini said. There’s a one-in-three chance the factors will combine to stunt growth from 2013, Roubini said in a June 11 interview in Singapore.
Nikkei, Kospi Fall
Japan’s Nikkei 225 (NKY) Stock Average declined 0.7 percent. South Korea’s Kospi Index (KOSPI) climbed 0.1 percent. New Zealand’s NZX 50 Index fell 0.4 percent. Hong Kong’s Hang Seng Index (HSI) climbed 0.4 percent, reversing a drop of up to 1.2 percent, and China’s Shanghai Stock Exchange Composite Index slipped 0.2 percent. Australian markets are closed today for a public holiday.
Futures on the Standard & Poor’s 500 Index added 0.1 percent today. In New York, the index declined 1.4 percent on June 10 amid concern the global economy is slowing. The gauge has retreated six straight weeks, the longest slump since 2008.
A gauge of consumer discretionary stocks fell the most among the 10 industry groups on the MSCI Asia Pacific Index today, led by Toyota.
Toyota slid 2.4 percent to 3,220 yen in Tokyo, the biggest single contributor to the MSCI Asia Pacific Index’s declines today. The company forecast a drop in profit after the nation’s record earthquake disrupted production and sales and while the yen strengthened.
Net income at the automaker may fall to 280 billion yen ($3.5 billion) in the 12 months ending March 31 from 408 billion yen a year earlier, the company said in a statement on June 10 after markets closed.
“Investors are likely selling Toyota, being disappointed at its forecasts. That may bring about speculative selling on other carmakers and parts makers,” said Toshiyuki Kanayama, a market analyst at Tokyo-based Monex Inc.
Ricoh Co., an office equipment manufacturer, slumped 0.4 percent to 862 yen. Bridgestone dropped 2.5 percent to 1,801 yen. Canon Inc. (7751), the world’s largest camera maker by sales, lost 0.9 percent to 3,730 yen.
Machinery orders in Japan declined 3.3 percent in April from March, the Cabinet Office said today in Tokyo. Orders, an indicator of capital spending in three to six months, were projected to increase 1.7 percent, according to the median forecast of 30 economists surveyed by Bloomberg News.
Canon also fell after the Nikkei newspaper reported sales volumes of digital single-lens reflex, or SLR, cameras fell in May in its first year-on-year decline in 17 months. Sales volumes declined 8.6 percent in May after supply disruptions following the March 11 earthquake caused product shortages at retailers, the Nikkei newspaper said, citing research firm BCN Inc.
The MSCI Asia Pacific Index has fallen about 4.7 percent so far this year, compared with a gain of 1.1 percent by the S&P 500 and a drop of 2.8 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 13.3 times estimated earnings on average, compared with 12.8 times for the S&P 500 and 10.8 times for the Stoxx 600.
In Taipei, HTC Corp. slumped 6.9 percent to NT$1,085, the second-biggest drag on the MSCI Asia Pacific Index. The company cut around 1 million units of orders across different models in the third quarter, UBS AG said in a report today.
Taiwan Semiconductor Manufacturing Co. also declined in Taipei trading, losing 0.8 percent to NT$74.7. The world’s largest contract chipmaker reported NT$35.96 billion in May sales, a decline from NT$36.23 billion in April.
Foxconn Technology Co., a maker of electronic parts, slumped 6.9 percent to NT$121.5. The company said sales slumped 53 percent in May to NT$3.85 billion ($133 million) from a year earlier. The company was also lowered to “neutral” from “add” at Fubon Securities Co.
Among stocks that gained, Aluminum Corporation of China Ltd., also known as Chalco, rose 2.8 percent to HK$6.66 in Hong Kong after a media report said China may select three rare-earth companies to lead restructuring.
In Shenzhen, China Nonferrous Metal Industry’s Foreign Engineering & Construction Co. increased 5.5 percent to 38.38 yuan. In Shanghai, Rising Nonferrous Metals Share Co., which receives about 72 percent of its revenue from China, jumped 6 percent to 73.23 yuan in Shanghai. Minmetals Development Co., which imports and exports metals and minerals, advanced 10 percent to 37.99 yuan.
Financial shares posted the smallest decline among the MSCI Asia Pacific’s industry groups as Chinese banks advanced, reversing earlier losses.
Industrial & Commercial Bank of China (1398) Ltd., China’s biggest bank by market value, rose 1.4 percent to HK$5.89 in Hong Kong, reversing an earlier 1.2 percent retreat. China Construction Bank Corp., the No.2 bank by market capitalization, increased 1.6 percent to HK$6.95. Bank of China Ltd. advanced 1 percent to HK$3.95.
“We’re getting to the point of a pretty oversold market where people could start stepping in,” said Todd Martin, Asia equity strategist at Societe Generale SA in Hong Kong. “People have been talking about relative values in China and we’ve seen two weeks of pretty heavy selling.”
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