Asian stocks fell, with the regional benchmark posting its largest weekly retreat since May, amid concern a slowdown in economies from China and Korea to Australia will hurt corporate profits.
BHP Billiton Ltd. (BHP), the world’s largest mining company, and Samsung Electronics Co. (005930), the biggest maker of televisions and mobile phones, were the main drags on the MSCI Asia Pacific Index (MXAP) as investors sold shares with earnings closely tied to economic growth. Whitehaven Coal Ltd. (WHC) slumped 20 percent as takeover optimism for the Australia coal producer dissipated.
The MSCI Asia Pacific Index slid 2.8 percent, the largest weekly decline since the third week in May, to 115.28. Data this week showed China’s economy expanded at the slowest rate in three years and Singapore’s gross domestic product shrank last quarter as South Korea and Taiwan cut full-year forecasts, adding to concern that global growth is faltering.
“The global economy is deteriorating faster than central banks can ease policy,” said Tomomi Yamashita, a senior fund manager in Tokyo at Shinkin Asset Management Co., which oversees about $6.3 billion. “Your best bet is to hold on to cash right now.”
Central banks in China, Europe, Taiwan, South Korea and Brazil have cut interest rates in the past fortnight to bolster economies against the impacts of Europe’s debt crisis and the faltering recovery in the U.S.
The MSCI Asia Pacific Index fell almost 11 percent from this year’s high on Feb. 29 through July 13, as the deepening crisis in Europe weighed on growth and corporate earnings. Shares in the measure are valued at 11.75 times estimated earnings on average, compared with 13.06 times for the Standard & Poor’s 500 Index and 10.73 times for the Stoxx Europe 600 Index.
Japan’s Nikkei 225 Stock Average lost 3.3 percent, snapping five weeks of gains, as the Bank of Japan altered its stimulus program without adding extra money. The bank expanded its asset- purchase fund to 45 trillion yen ($564 billion) from 40 trillion yen, while paring a loan program by 5 trillion yen.
South Korea’s Kospi Index fell 2.4 percent as an unexpected interest rate cut from the Bank of Korea failed to alleviate investors’ concern that the central bank can spur growth. The MSCI Emerging Markets Index (MXEF) slid 2.1 percent this week.
Australia’s S&P/ASX 200 Index slid 1.8 percent after employers in the Pacific nation unexpectedly reduced payrolls in June and the jobless rate rose.
Hong Kong’s Hang Seng Index dropped 3.6 percent, the most since May, and China’s Shanghai Composite Index lost 1.7 percent as China’s growth slowed for a sixth quarter, putting pressure on Premier Wen Jiabao to boost stimulus to secure a second-half rebound.
Raw-material shares and information technology stocks posted the largest declines on the regional Asian benchmark this past week.
BHP Billiton fell 5 percent to A$30.48. Rio Tinto Group, the world’s third largest mining company, slid 6.4 percent to A$54.08. Cnooc Ltd., China’s largest offshore oil producer, declined 3.1 percent to HK$15.02.
Samsung Electronics slid 1.9 percent to 1.139 million won. ZTE Corp. (763), China’s second-biggest maker of telecommunications equipment, fell 16 percent to HK$12.50 amid concerns slower economic growth and a possible probe into European Union subsidies may threaten exports.
Whitehaven tumbled 20 percent to A$3.45 in Sydney amid speculation an improved takeover bid by Tinkler Group Pty., controlled by billionaire Nathan Tinkler, won’t materialize. Whitehaven said on June 13 it rejected a “conditional and incomplete” proposal from the mining magnate.
Tinkler led a group that made a conditional A$5.3 billion ($5.4 billion) offer to buy the company for A$5.20 a share, Whitehaven said in a statement after markets closed July 13. That’s a 51 percent premium to this week’s closing price.
Dentsu Inc. (4324) fell 9 percent to 2,145 yen after agreeing to buy Britain’s Aegis Group Plc for 3.16 billion pounds ($4.9 billion), a record acquisition by the 111-year-old Japanese advertising company and one of the biggest in the industry’s history, according to data compiled by Bloomberg.
Sun Hung Kai Properties Ltd. (16) dropped 0.1 percent to HK$95.45 this week before the shares were suspended. The billionaire co-chairmen of Sun Hung Kai, Hong Kong’s biggest developer, and the city’s former No.2 government official were charged with bribery and public misconduct by the municipal anti-graft agency.
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