Asia Stocks Fall on Japan Machinery Orders, China Economic Data

Asian stocks fell, with the regional benchmark index headed for its first weekly loss in three weeks, after Japanese machinery orders declined, and as China reported inflation remained above 6 percent and growth in industrial production slowed.

Fanuc Corp. (6954) led Japanese machinery makers lower after an industry group said yesterday that machine orders fell. Industrial & Commercial Bank of China (601398) Ltd. slumped 0.8 percent. Unimicron Technology Corp. jumped 6.9 percent in Taipei after saying sales rose last month. China Yurun Food Group Ltd. (1068), the nation’s second-biggest listed meat processor, advanced 1.6 after addressing a report over pork additives.

The MSCI Asia Pacific Index fell 0.9 percent to 120.89 at 7:54 p.m. in Tokyo after rising as much as 0.4 percent. The gauge slumped 8.6 percent last month, the most since May 2010, amid concern global economic growth is slowing as Europe’s sovereign-debt crisis spreads and after Standard & Poor’s cut the U.S. credit rating.

“The inflation controls have curbed industrial growth,” in China, Richard Chen, a strategist at Jianghai Securities Co., said in Shanghai. “This will hurt the outlook for companies’ earnings as tightening measures won’t ease in the near term. Investors are selling into rallies as concerns over the economic slowdown may drag the index lower.”

On Course to Decline

The MSCI Asia Pacific index is on course to fall 2.6 percent this week, its first weekly decline since Aug. 19. All 10 industry groups on the measure fell. About five stocks fell for every four that climbed on the 1,017-member index.

Japan’s Nikkei 225 (NKY) Stock Average slid 0.6 percent after the Cabinet Office said the nation’s economy contracted more than the government initially estimated.

South Korea’s Kospi Index fell 1.8 percent, the biggest decline among benchmark measures in the region. South Korean financial markets will close on Sept. 12 and 13 for a holiday.

Australia’s S&P/ASX 200 Index advanced 0.2 percent. Hong Kong’s Hang Seng Index declined 0.2 percent, reversing an earlier gain of 0.9 percent. China’s Shanghai Composite Index sank 1.19 points to decline less than 0.1 percent.

Futures on the Standard & Poor’s 500 Index lost 0.4 percent today. In New York, the index fell 1.1 percent yesterday as Federal Reserve Chairman Ben S. Bernanke warned that policy makers should not disregard the “fragility” of the economic recovery and must put the federal government’s finances on a “sustainable trajectory” over the long term.

‘Better Than Nothing’

Obama’s plan “is certainly better than nothing,” said Matt Riordan, who helps manage almost $6.6 billion in Sydney at Paradice Investment Management Pty. “But it has to be kept in mind that this is a package being implemented in a period of forced fiscal austerity.”

In Japan, Fanuc led machinery stocks lower, dropping 7.6 percent to 10,730 yen. The Japan Machine Tool Builders’ Association said machinery tool orders fell 12.7 percent in August to 98.96 billion yen ($1.3 billion) from July.

Komatsu Ltd. (6301) slid 4.5 percent to 1,797 yen. Toshiba Machine Co. sank 7.9 percent to 328 yen. Industrial stocks posted the biggest drop among the 10 industry groups on the MSCI Asia Pacific Index, and were also the biggest drag on the measure.

China Data

Chinese stocks declined today after the country’s National Bureau of Statistics said inflation for August stood at 6.2 percent after rising 6.5 percent in July. Industrial production in August rose 13.5 percent from a year earlier, the statistics bureau said, down from a 14 percent increase the previous month and also less than the 13.7 percent median estimate in a Bloomberg News survey.

Industrial & Commercial Bank slumped 0.8 percent to HK$4.95 in Hong Kong, the third-biggest drag on the Hang Seng index. Belle International Holdings Ltd., a Chinese retailer of women’s shoes, dropped 1.9 percent to HK$14.60. Aluminum Corporation of China Ltd., the nation’s biggest producer of the metal by market value, lost 1.7 percent to HK$4.65.

Inflation is “down but not out,” said Alistair Thornton, a Beijing-based economist with IHS Global Insight. “It may have peaked but it will remain elevated for significant period of time and this will complicate monetary policy.”

Among stocks that gained, Unimicron Technology jumped 6.9 percent to NT$42.35 in Taipei, the third-biggest increase on the MSCI Asia Pacific Index. The company yesterday said sales in August rose 4.1 percent on last year.

In Hong Kong, China Yurun increased 1.6 percent to HK$14.16, after plunging 16 percent yesterday. The company issued a statement addressing a newspaper report yesterday that its pork products contained an illegal additive.

To contact the reporter on this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net

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