Asian Stocks Pare Best Run Since ’05 as Europe Delays Greek Aid

Asian stocks fell, paring the regional index’s longest streak of weekly gains since 2005, after European leaders held back a debt bailout for Greece pending a parliamentary vote on an austerity plan and as companies cut earnings forecasts.

Samsung Electronics Co. (005930), a South Korean consumer electronics maker that gets a fifth of its sales from Europe, slid 2 percent. AOC Holdings Inc. (5017), a Japanese oil and gas explorer, tumbled 9.8 percent in Tokyo after cutting its full- year profit forecast by half. Rio Tinto Group, the world’s third-biggest mining company, dropped 2.3 percent in Sydney after posting a second-half loss.

“There still needs to be fine-tuning process for a Greece package,” said Chu Moon Sung, a Seoul-based fund manager at Shinhan BNP Paribas Asset Management Co., which oversees $28 billion. “Investors are taking a breather following the recent solid rally.”

The MSCI Asia Pacific Index (MXAP) declined 1.4 percent to 124.80 as of 7:27 p.m. in Tokyo, with more than two shares falling for each that rose. The gauge is set for a 0.4 percent gain this week, its eighth consecutive weekly advance and the longest winning streak since December 2005, on improving U.S. economic data, efforts to contain Europe’s sovereign-debt crisis and signs China will act to support growth.

The benchmark Asian index gained 11 percent this year through yesterday, compared with a 7.5 percent advance by the Standard & Poor’s 500 Index and a 7.8 percent increase by the Stoxx Europe 600 Index.

Earnings Season

Stocks on the Asian gauge were valued at 14.1 times estimated earnings on average, compared with 12.9 times for the S&P 500 and 10.9 times for the Stoxx 600. More than half of the 334 companies on the MSCI Asia Pacific Index that reported earnings since Jan. 9 missed estimates, according to data compiled by Bloomberg.

The Nikkei 225 Stock Average lost 0.6 percent today. South Korea’s Kospi Index dropped 1 percent. Hong Kong’s Hang Seng Index both fell 1.1 percent. Australia’s S&P/ASX 200 Index slid 0.9 percent as the Reserve Bank of Australia lowered its forecasts for economic growth and inflation this year.

China Exports Fall

China’s Shanghai Composite Index (SHCOMP) settled at 0.1 percent higher after swinging between gains and losses as the nation’s exports fell for the first time in more than two years in January and imports slid more than forecast after the weeklong Lunar New Year holiday disrupted trade.

Futures on the S&P 500 fell 0.6 percent today. The gauge rose 0.2 percent in New York yesterday after jobless claims declined last week.

European finance chiefs’ refusal to deliver the bailout reflects frustration with Greece’s bickering politicians and the prospect they may again backtrack on austerity measures. Prime Minister Lucas Papademos yesterday agreed with political parties on budget cuts required for the 130-billion-euro ($172) financing package. The deal has yet to be voted on.

Companies that get revenue from Europe declined after Luxembourg Prime Minister Jean-Claude Juncker said there will be “no disbursement without implementation” of the austerity measures. Greece faces a 14.5 billion-euro bond payment on March 20 and is struggling to secure financing to avoid a default that could spark a new round of contagion in the euro area.

Greek Agreement

“Greece reached some sort of agreement, but it’s still up for negotiation whether the rest of the European authorities will accept that agreement,” said Stephen Halmarick, Sydney- based head of investment markets research at Colonial First State Global Asset Management, which oversees about $150 billion. “It was a positive step last night, but only a small one and there’s a long way to go.”

Samsung Electronics fell 2 percent to 1.062 million won. Canon Inc. (7751), a camera maker that gets about 31 percent of sales from Europe, lost 1.3 percent in Tokyo to 3,415 yen. Esprit Holdings Ltd. (330), the Hong Kong-based clothier most dependent on Europe, dropped 1 percent to HK$14.30.

AOC, Citizen

AOC Holdings plunged 9.8 percent to 500 yen. The Japanese company cut its full-year net-income forecast by 55 percent to 1.3 billion yen ($17 million), citing foreign-exchange losses and falling energy prices.

Citizen Holdings Co. slid 2.2 percent to 436 yen after the watchmaker cut its full-year net-income forecast by 22 percent to 7 billion yen.

Rio Tinto fell 2.3 percent to A$69.98 in Sydney. The miner swung to a second-half loss, its first in four years, after taking a one-time charge of $8.9 billion on the value of its aluminum business.

Among stocks that advanced, Newcrest Mining Ltd. (NCM) rose 1.7 percent to A$34.01 after Australia’s largest gold producer said first-half net income rose 50 percent from a year earlier to a record A$659 million ($711 million).

Yamada Denki Co. climbed 9 percent to 5,460 yen in Tokyo, the second-biggest advance on the MSCI Asia Pacific Index, after the Japanese electronics retailer forecast earnings that beat analysts’ estimates.

Shipping companies rallied after carriers announced plans to raise Asia-U.S. cargo rates for the second time this year. Members of the Transpacific Stabilization Agreement yesterday said they would seek a $300 increase per 40-foot box next month after “successfully” pushing through a boost in January.

Hanjin Shipping Co., South Korea’s largest shipping line, climbed 4.5 percent to 17,600 won in Seoul. Mitsui O.S.K. Lines Ltd. (9104), Japan’s biggest marine transport company, added 1.2 percent to 339 yen.

To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Saeromi Shin in Seoul at sshin15@bloomberg.net

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

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