Asian Stocks Fall 3rd Day on Greek Concern, Australia GDP
Asian stocks fell for a third day, with the regional benchmark index (CRY) headed for the lowest close in a month, amid concern about a Greece debt-swap deal and after reports showed European gross domestic product contracted and Australia’s economy grew less than forecast.
Sony Corp. (6758), Japan’s No. 1 exporter of consumer electronics, slid 2.4 percent. Newcrest Mining Ltd. (NCM) lost 3.8 percent in Sydney as metal prices dropped. China Life Insurance Co. slumped 6.1 percent in Hong Kong after saying profit may have fallen by half last year. Industrial & Commercial Bank of China Ltd., the most actively traded stock by volume in the regional benchmark index today, dropped amid speculation Goldman Sachs Group Inc. will sell its shares in the bank.
The MSCI Asia Pacific Index slid 0.8 percent to 124.54 as of 7:59 p.m. in Tokyo, set for the lowest close since Feb. 3. All 10 industry groups on the measure fell, with more than two stocks dropping for each that rose.
“We are seeing a correction after a rapid rally,” said Hitoshi Asaoka, a Tokyo-based senior strategist at Mizuho Trust & Banking Co. “The major trend in Europe hasn’t changed in that banks strengthen their capital, which leads to a credit crunch and an economic slowdown. The market will remain sensitive to European news flow until Greece makes it through March 20,” a bond redemption date.
Japan’s Nikkei 225 Stock Average lost 0.6 percent and South Korea’s Kospi Index declined 0.9 percent. Australia’s S&P/ASX 200 fell 1.5 percent after a report showed the nation’s economy grew at half the pace economists forecast last quarter amid a slump in housing construction.
Hong Kong’s Hang Seng Index dropped 0.9 percent amid trading volume that was 25 percent above the 30-day intraday average. The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, fell 0.7 percent as the National People’s Congress meets this week.
Futures on the Standard & Poor’s 500 Index (SPXL1) added 0.5 percent today. The gauge sank 1.5 percent in New York yesterday, the biggest drop since Dec. 8, amid concern may not convince enough of its creditors to trade their bonds for new ones, at a loss of as much as 75 percent, before tomorrow’s deadline.
Shares also fell after a report showed the euro region’s gross domestic product shrank 0.3 percent last quarter from the previous period.
“There’s concern about whether or not there will be enough participants in the Greek debt swap,” Michael Koskuba, who helps oversee $28 million at Victory Capital Management Inc. in New York, said in a telephone interview. “The fear is that if it doesn’t happen the way most want it to happen, there’s potential for a greater recession in Europe.”
Private investors who have so far declared their participation in Greece’s debt restructuring hold only about one-fifth of the bonds involved in the swap required for a bailout.
Sony, which depends on Europe for a fifth of its sales, dropped 2.4 percent to 1,638 yen. Cosco Pacific Ltd. (1199), which operates container facilities at Greece’s Piraeus port, declined 1.3 percent to HK$11.10 in Hong Kong.
Mining companies fell after the London Metal Exchange Index of prices for six industrial commodities including copper and aluminum sank 2.6 percent yesterday, falling the most since Feb. 10. The Thomson Reuters/Jefferies CRB Index (CRY) of raw materials dropped 1.6 percent.
Newcrest Mining lost 3.8 percent to A$30.60 in Sydney. Minmetals Resources Ltd. (1208) fell 2.4 percent to HK$4.01 in Hong Kong. Inpex Corp. (1605), Japan’s No. 1 energy explorer, lost 1.1 percent to 550,000 yen.
China Life Insurance lost 6.1 percent to HK$20.80 after the Beijing-based insurer yesterday said 2011 profit may have fallen by between 40 percent and 50 percent from the previous year on lower investment yields and bigger impairment losses.
The MSCI Asia Pacific Index gained 10.2 percent this year through yesterday, compared with a 6.8 percent advance by the S&P 500 and a 5.7 percent increase by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 14.6 times estimated earnings on average, compared with 12.9 times for the S&P 500 and 10.8 times for the Stoxx 600.
Industrial & Commercial Bank of China (1398) slid 1.1 percent to HK$5.20 after saying a lock-up period barring the sale of its shares had ended, giving Goldman Sachs the right to sell its stake. Shares of the lender, the world’s biggest by market value, slid 3.8 percent yesterday after South China Morning Post reported Goldman Sachs approached several institutions about the possibility of selling a “big chunk” of its shares.
Among stocks that rose, Aeon Credit Service Co. gained 4.8 percent to 1,281 yen in Tokyo. The credit card company said it will buy back as much as 8.93 percent of its outstanding shares from March 7 through March 6, 2013.
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