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Asia Stocks Fall as Japan Economic Growth Slows

Asian stocks fell as slowing economic growth in Japan added to signs of a deepening global slump, overshadowing optimism the U.S. Federal Reserve will add new stimulus.

Nexon Co. sank 7.9 percent in Tokyo, sliding for a second day after the developer of online games cut its profit forecast. BlueScope Steel Ltd. (BSL) surged 35 percent in Sydney after agreeing to sell some of its operations to Nippon Steel (5401) Corp. Nikon Corp., a camera maker that depends on North America for a quarter of its sales, climbed 1.6 percent after a report the Fed Bank of San Francisco’s president is in favor of taking measures to boost the economy. Genting Singapore (GENS) Plc slid 2.7 percent after the casino operator’s sales missed estimates.

The MSCI Asia Pacific Index slid 0.2 percent to 120.29 as of 7:34 p.m. in Tokyo after earlier rising 0.1 percent. About five stocks fell for every four that rose. The gauge climbed 3 percent last week, its biggest weekly gain since January.

“The stock market is factoring in hopeful sentiment, with potentially good times ahead associated with more central bank action globally,” said Jason Teh, who helps manage $3 billion at Investors Mutual Ltd. in Sydney. “It’s a pretty volatile time. Time will tell whether the reality of the global economic slowdown will take hold.”

Comparative Valuations

The MSCI Asia Pacific Index (MXAP) fell 6.6 percent from this year’s high on Feb. 29 through Aug. 10 amid concern Europe’s sovereign-debt crisis will worsen and China’s economy is slowing. The regional benchmark index traded at 12.4 times estimated earnings compared with 13.6 times for the Standard & Poor’s 500 Index (SPXL1) and a multiple of 11.6 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

The Nikkei 225 Stock Average fell less than 0.1 percent today. Japan’s economic growth slowed to an annualized 1.4 percent pace in the three months through June, down from a revised 5.5 percent expansion in the first quarter, the Cabinet Office said today. The median forecast economists surveyed by Bloomberg was for 2.3 percent growth.

Volume on the Nikkei 225 was about 41 percent below the 30- day average because of the O-bon holiday, a week-long festival starting today when many Japanese companies close.

South Korea’s Kospi Index (KOSPI) retreated 0.7 percent, while Australia’s S&P/ASX 200 Index (AS51) gained 0.1 percent. Singapore’s Straits Times Index advanced 0.4 percent.

Hong Kong’s Hang Seng Index fell 0.3 percent, and the Shanghai Composite Index declined 1.5 percent. Taiwan’s Taiex Index slid 0.1 percent.

Stimulus Talk

Futures on the Standard & Poor’s 500 Index were little changed after falling as much as 0.4 percent. The gauge rose 0.2 percent on Aug. 10 after the San Francisco Chronicle reported that Fed Bank of San Francisco President John Williams said a lack of progress in reducing U.S. unemployment and the slow economic recovery have convinced him it’s time to move ahead with a third round of asset purchases.

Nikon rose 1.6 percent to 2,113 yen in Tokyo. Honda Motor Co., which depends on North America for more than 40 percent of its sales, climbed 0.6 percent to 2,512 yen.

Of the 1,008 companies listed on the Asian benchmark gauge, about 150 firms are scheduled to post earnings this week, according to data compiled by Bloomberg. Of the 504 companies to have reported quarterly earnings since July 1, and for which Bloomberg has estimates, 44 percent beat expectations while 55 percent trailed them.

Nexon slumped 7.9 percent to 1,138 yen in Tokyo, extending its 24 percent slump on Aug. 10 after cutting its net-income forecast by 13 percent for the year through December.

BlueScope Jumps

BlueScope Steel surged 35 percent to 35 Australian cents. The company agreed to sell half its coated products operations in Asia and the U.S. to Nippon Steel for net proceeds of $540 million. Nippon Steel climbed 0.6 percent to 167 yen in Tokyo.

Genting Singapore slid 2.7 percent to S$1.245 in Singapore after its second-quarter revenue missed analyst estimates and after brokerages including OSK Securities Bhd cut their ratings on the stock.

AU Optronics Corp., a Taiwanese maker of liquid-crystal displays, gained 3.3 percent to NT$9.27 after the Taipei-based Economic Daily News reported Lenovo Group Ltd. signed a contract to buy to buy about $1 billion of LCD panels from the company. Lenovo, a Chinese personal computer maker, dropped 1.1 percent to HK$6.08 in Hong Kong.

To contact the reporter on this story: Kana Nishizawa in Hong Kong at knishizawa5@bloomberg.net

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

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