Asia Stocks Fall for Fifth Day on Greece, Italy Concerns

Asian stocks fell for a fifth day as the political impasse in Greece added to speculation the nation will leave the euro union and Moody’s Investors Service downgraded Italian banks.

Nippon Sheet Glass Co. (5202), a glassmaker that counts Europe as its No. 1 market, slumped 3.1 percent in Tokyo after saying it may continue to suspend some production in Europe this year on slumping demand. BHP Billiton Ltd. (BHP), the world’s largest mining company, declined 1.7 percent in Sydney after metal prices fell. China Southern Airlines Co., a mainland carrier, dropped 4.6 percent after paring Philippine flights on Chinese travel alert to the region.

The MSCI Asia Pacific Index (MXAP) slid 0.6 percent to 117.35 as of 7:45 p.m. in Tokyo. Almost twice as many stocks declined as rose on the measure, which is headed for its lowest close since Jan. 16. The gauge is about 1 percent away from closing 10 percent below this year’s high on Feb. 29, a level some investors call a correction.

A Greece exit “won’t have much direct impact on Asian companies, but it will impact the market,” said Tomomi Yamashita, a senior fund manager in Tokyo at Shinkin Asset Management Co., which oversees $6 billion. “That will affect companies in ways such as hurting their ability to raise capital. When U.S. stocks fall, that affects consumer spending, which will impact Asian companies.”

Nikkei, Kospi

Futures on the Standard & Poor’s 500 Index (SPXL1) rose 0.6 percent today. The gauge fell 1.1 percent in New York yesterday and the Dow Jones Industrial Average closed at its lowest level since January.

Asian shares pared their losses today after data showed Germany’s economy grew five times more than analysts predicted, easing concern that Europe’s debt crisis is weighing on growth. The nation’s growth helped the 17-nation euro region avoid a second recession in three years. Gross domestic product in the region stagnated in the first quarter compared with the prior three months, the European Union’s statistics office in Luxembourg said today.

Japan’s Nikkei 225 Stock Average (NKY) fell 0.8 percent and Australia’s S&P/ASX 200 Index slid 0.7 percent. South Korea’s Kospi Index (KOSPI) retreated 0.8 percent.

Hong Kong’s Hang Seng Index added 0.8 percent, reversing an earlier decline, and China’s Shanghai Composite Index fell 0.3 percent.

The Asia-Pacific gauge gained 3.7 percent this year through yesterday, compared with a 6.4 percent increase by the S&P 500 and a 1.2 percent advance by the Stoxx Europe 600 Index. Stocks in the Asian benchmark were valued at 12.1 times estimated earnings on average yesterday, compared with 12.7 times for the S&P 500 and 10.2 times for the Stoxx 600.

Italian Banks

Seven of the 10 industries on the Asia-Pacific gauge retreated today. German Finance Minister Wolfgang Schaeuble said Europe has done its “utmost” to rescue Greece, limiting any further room for leniency after about 240 billion euros ($308 billion) of aid pledges.

UniCredit SpA and Intesa Sanpaolo SpA were among 26 Italian banks whose credit ratings were cut by Moody’s, citing weakened earnings and the country’s economic outlook. The downgrade followed Moody’s decision on Feb. 13 to cut the credit rating of Italy and five other nations, including Spain, on concern over the euro region’s ability to deal with the debt crisis.

Nippon Sheet Glass dropped 3.1 percent to 93 yen in Tokyo. The company said one of two furnaces at a German float plant will remain out of operation until at least the end of this year. Further cuts in float-glass capacity in Europe is under review, the company said.

BHP fell 1.7 percent to A$33.86 in Sydney, while Rio Tinto Group, the world’s the world’s third-biggest mining company, slid 1.1 percent to A$60.31 after the London Metal Exchange Index of prices for six industrial metals including copper and aluminum fell 1.9 percent yesterday.

China Southern Airlines slid 4.6 percent to HK$3.30 in Hong Kong. The company cut its flights to the Philippines as many tour groups canceled trips to the region. China last week told citizens to avoid “unnecessary” travel to the Philippines amid a dispute over island in the South China Sea.

To contact the reporters on this story: Kana Nishizawa in Hong Kong at knishizawa5@bloomberg.net; Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

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

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