Asia Stocks Fall for Fourth Day Amid Europe Debt Concerns
Sony Corp. (6758), a consumer electronics company that gets about a fifth of its sales from Europe, slid 1.7 percent. Paladin Energy Ltd. sank 6.3 percent in Sydney after the uranium producer sold convertible notes. Huabao International Holdings Ltd., a maker of flavors for cigarettes, fell the most on the regional benchmark after a short-seller questioned its finances.
The MSCI Asia Pacific Index (MXAP) fell 0.3 percent to 123.23 as of 6:37 p.m. in Tokyo. Trading volumes in Japan and Hong Kong were at least 14 percent less than the 30-day average, while those in Shanghai were 45 percent higher. Shares fell after the resignation of Dutch Prime Minister Mark Rutte and French President Nicolas Sarkozy’s defeat in the first round of his re- election bid sparked concern European states will struggle to cut spending.
“It’s a time of a greatly unsettled atmosphere in Europe,” Quintin Price, the global investment chief for fundamental equities at BlackRock Inc., said in a Bloomberg Television interview from Hong Kong. BlackRock has about $3.68 trillion in assets. “You see this resistance to austerity. Europe continues to be central.”
Japan’s Nikkei 225 Stock Average (NKY) dropped 0.8 percent. South Korea’s Kospi Index fell 0.5 percent. China’s Shanghai Composite Index was little changed, while Hong Kong’s Hang Seng Index added 0.3 percent after earlier falling as much as 0.4 percent.
Futures on the Standard & Poor’s 500 Index rose 0.4 percent today. The gauge dropped 0.8 percent in New York yesterday as a revolt against spending cuts in budget-conscious Netherlands prompted Prime Minister Rutte to step down.
The backlash against austerity measures in Europe has expanded in recent weeks after Spain struggled to meet European Union-imposed deficit targets and election campaigns in Greece faced anti-austerity rumblings.
“This is destabilizing for the markets as a whole,” said Angus Gluskie, managing director at White Funds Management in Sydney who manages more than $350 million. “Europe is still really the focus.”
Sony slipped 1.7 percent to 1,330 yen. Canon Inc. (7751), a Japanese camera maker that depends on Europe for almost a third of its sales, lost 1.1 percent to 3,745 yen. Cosco Pacific Ltd., which operates a port in Greece, dropped 0.9 percent to HK$10.98 in Hong Kong.
Among mining stocks, Paladin Energy sank 6.3 percent to A$1.575 in Sydney. The company sold $274 million of five-year convertible notes to help finance debt maturing next year.
Newcrest Mining Ltd. dropped 3.6 percent to A$26.60, the lowest since December 2008, after Australia’s biggest gold miner cut its full-year production target after heavy rain at its mines reduced output, missing analyst estimates.
Huabao International slumped 8.1 percent to HK$3.98. A report by Anonymous Analytics posted on its website said Huabao consistently reported margins of more than 70 percent, while its industry peers were in the 40 percent to 50 percent range. Industry sources are saying it shouldn’t be possible for a company with “questionably low” research and development spending to report “absurdly” high margins, the report said.
United Phosphorus Ltd. retreated 6 percent to 120.05 rupees in Mumbai after India’s competition regulator imposed a 2.52 billion rupee ($48 million) penalty on the nation’s largest pesticide maker and two of its rivals. Paladin Energy sank 6.3 percent to A$1.575 in Sydney. The company sold $274 million of five-year convertible notes to help finance debt maturing next year.
Australia Rate Speculation
Australia’s S&P/ASX 200 Index added 0.2 percent, having swung between gains as much as 0.5 percent and losses of up to 0.3 percent. A report showed consumer prices rose less than economists forecast in the first quarter, boosting bets Reserve Bank Governor Glenn Stevens will reduce the 4.25 percent benchmark interest rate next week.
Westpac Banking Corp. (WBC), the nation’s second-largest lender by market value, gained 1.5 percent to A$22.47. Australia and New Zealand Banking Group Ltd., the third-biggest, rose 1.1 percent to A$23.72.
The MSCI Asia Pacific Index gained about 8.5 percent this year through yesterday, compared with a 8.7 percent advance by the S&P 500 and a 3 percent increase by the Stoxx Europe 600 Index. Stocks in the Asian benchmark were valued at 12.6 times estimated earnings on average, compared with 13 times for the S&P 500 and 10.5 times for the Stoxx 600.
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