Asian Stocks Fall on Japan’s Trade Deficit, Greek Bailout

Asian stocks dropped, with the regional gauge retreating from a three-month high, after Japan reported a wider-than-expected trade deficit and as investors await developments from a euro-area finance ministers meeting this week to discuss details of the bailout package for Greece.

Canon Inc. (7751), a camera maker that gets 31 percent of sales from Europe, fell 1.1 percent in Tokyo. Samsung Electronics Co. (DELL), the world’s largest maker of computer memory chips, slid 1.4 percent in Seoul after customer Dell Inc. cut its full-year profit forecast amid a slump in demand for personal computers. Woodside Petroleum Ltd. declined 3.1 percent in Sydney after Australia’s No. 2 oil producer posted first-half profit that missed analyst estimates.

The MSCI Asia Pacific Index slid 0.5 percent to 120.64 as of 7:40 p.m. in Tokyo, with almost two shares falling for each that rose. Investor optimism that global central banks will take action to stimulate economic growth has pushed the gauge up 11 percent from its June low.

“Markets should be pausing for breath until we see some more central-bank action,” said Nader Naeimi , Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd. The firm manages about $100 billion. “We’ve had a very strong rally in the last few weeks based on the verbal signs of intervention from the European Central Bank. Authorities are on the right track. It appears they are more united now.”

Trade Deficit

Japan’s Nikkei 225 Stock Average fell 0.3 percent. The nation’s trade deficit was 517.4 billion yen ($6.5 billion) in July as Europe’s sovereign-debt crisis and a slowdown in China dragged down exports, data released by the Finance Ministry showed. That compares with a revised 60.3 billion yen surplus in June and the median forecast of a 270 billion yen deficit in a Bloomberg News survey of 28 analysts.

South Korea’s Kospi Index dropped 0.4 percent. Australia’s S&P/ASX 200 Index lost 0.2 percent and New Zealand’s NZX 50 Index fell 0.8 percent. Hong Kong’s Hang Seng Index decreased 1.1 percent and China’s Shanghai Composite Index slid 0.5 percent.

Except for New Zealand, volume was below the 30-day average on all Asian markets for which Bloomberg has data.

Futures on the Standard & Poor’s 500 Index slid 0.2 percent today. The S&P 500 lost 0.4 percent yesterday, with the gauge failing to remain above a four-year high, as technology shares slumped.

Almost three years after the European debt crisis came to light in Greece, the country remains at the heart of the turmoil as contagion spreads to Italy and Spain.

Greece Concessions

French President Francois Hollande is due in Berlin tomorrow to discuss the crisis with German Chancellor Angela Merkel. Concessions are possible for Greece if its Prime Minister, Antonis Samaras, shows a willingness to meet the main targets set out in his country’s bailout program, a senior lawmaker with Merkel’s government said yesterday.

Companies that do business in Europe fell. Hutchison Whampoa Ltd., which operates ports in Spain and Germany, lost 1 percent to HK$69.30. Canon, the world’s biggest camera maker, fell 1.1 percent to 2,701 yen in Tokyo. Kyocera Corp., an electronics maker that gets almost 20 of its sales from Europe, decreased 1.2 percent to 6,820 yen.

Energy producers, raw material suppliers and information- technology companies posted the biggest declines among the 10 industry groups in the MSCI Asia Pacific Index. (MXAP)

Semiconductor-related companies and Dell suppliers declined after the world’s third-largest maker of personal computers forecast full-year profit of $1.70 a share, less than the company’s February projection of at least $2.13 a share. The company also predicted third-quarter revenue that missed analyst estimates.

Samsung, Compal

Samsung Electronics lost 1.4 percent to 1.264 million won in Seoul. Compal Electronics Inc. (2324), which makes laptops for Dell, slid 1.8 percent to NT$27.50 in Taipei. Advantest Corp., the world’s biggest maker of memory-chip testers, dropped 1.7 percent to 1,139 yen in Tokyo after seven straight days of advance.

The MSCI Asia Pacific Index retreated 6.5 percent from a Feb. 29 high through yesterday amid concern China’s economy is slowing and Europe’s debt crisis is deepening. Stocks on the measure were valued at 12.6 times estimated earnings on average, compared with 13.7 times for the Standard & Poor’s 500 Index and 11.8 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Airlines declined after Credit Suisse Group AG downgraded the sector to underweight on rising fuel costs and weakening Asian currencies. Air China Ltd. (753), China’s largest carrier by market value, slipped 2.5 percent to HK$5.07 in Hong Kong. Qantas Airways Ltd. fell 1.3 percent to A$1.17 in Sydney.

Woodside Petroleum dropped 3.1 percent to A$34.90 in Sydney after reporting first-half profit fell 2 percent from a year earlier to $812 million, missing the $855 million median estimate of six analysts surveyed by Bloomberg.

Estimates Missed

Of the 455 companies in the Asia-Pacific index that have reported quarterly earnings since July 1, and for which Bloomberg has estimates, about 55 percent have failed to meet projections, according to data compiled by Bloomberg.

China BlueChemical Ltd. (3983) slumped 5.5 percent to HK$4.60, the second-biggest decline on the regional gauge. The fertilizer maker reported first-half net income fell 12 percent from a year earlier to 908.5 million yuan ($143 million).

Fletcher Building Ltd. sank 5.1 percent to NZ$6.32 in Wellington after New Zealand’s biggest construction-products maker said full-year profit tumbled 35 percent NZ$185 million ($150 million).

Among stocks that rose, Hengdeli Holdings Ltd. climbed 9.8 percent to HK$2.36 in Hong Kong. The China retail partner of Swatch Group AG reported first-half profit increased 26 percent from a year earlier to 563 million yuan, exceeding the 448.8 million-yuan average of four analyst estimates compiled by Bloomberg.

To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net

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

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