Asian Stocks Erase Monthly Advance on Economic Concerns

Asian stocks fell, with the regional benchmark index wiping out its gains for the month, as reports on Japanese retail sales and South Korean business confidence add to signs of an economic slowdown and investors doubt the Federal Reserve will announce further stimulus.

Samsung Electronics Co. (005930), the world’s biggest mobile-phone maker by sales, slipped 1.2 percent in Seoul. Atlas Iron Ltd. sank 5.5 percent, leading Australian iron-ore producers lower after the metal’s price in China declined to the lowest level in almost three years. China Cosco Holdings Co. slid 3.5 percent in Hong Kong after the nation’s largest listed shipping company posted a wider first-half loss.

The MSCI Asia Pacific Index fell 0.8 percent to 118.3 as of 7:53 p.m. in Tokyo, erasing this month’s advance and heading for its lowest close since Aug. 3. About three shares dropped for each that rose on the gauge. The Fed said the U.S. economy continued to expand “gradually,” damping speculation Chairman Ben S. Bernanke will announce a third round of quantitative easing to support growth in a speech tomorrow at a meeting of central bankers in Wyoming.

“Investors who expect Bernanke to deliver a clear commitment to QE3 might be disappointed, which could trigger some sort of sell-off in so-called risky assets,” said Mikio Kumada, a Singapore-based global strategist for LGT Capital Management, which oversees more than $20 billion. “This is still not a time to bet against major central banks’ ability to intervene in markets.”

Japan’s Nikkei 225 Stock Average (NKY) decreased 1 percent. The nation’s retail sales dropped 0.8 percent in July from a year earlier, the first decline in eight months. Australia’s S&P/ASX 200 Index lost 0.9 percent.

S. Korea Confidence

South Korea’s Kospi Index declined 1.2 percent. Business confidence among the country’s manufacturers stood near the lowest level since the global financial crisis, a report showed today, maintaining pressure for an interest-rate cut to support growth. Hong Kong’s Hang Seng Index both fell 1.2 percent, while China’s Shanghai Composite Index closed little changed.

The MSCI Asia Pacific Index is heading for its first monthly drop since May, as profit warnings in Hong Kong hit a record and Japanese companies including Sony Corp. cut earnings forecast. The MSCI All-Country World Index is heading for 2 percent advance in August, extending gains for a third month.

Futures on the Standard & Poor’s 500 Index lost 0.4 percent today. The gauge gained 0.1 percent yesterday as a report showed U.S. gross domestic product expanded at a 1.7 percent annual rate from April through June, up from an initial estimate of 1.5 percent.

Gradual Growth

The world’s biggest economy continued to expand “gradually” in July and early August as improving housing and retail sales helped outweigh weakness in manufacturing, the Fed said yesterday in its Beige Book business survey based on reports from its 12 districts. The report reflects information collected on or before Aug. 20.

South Korean manufacturers dropped as a central bank survey showed most businesses remained pessimistic as a slowdown in China and Europe’s debt crisis sapped demand.

Samsung Electronics, which gets almost half its sales from China and Europe, slid 1.2 percent to 1.215 million won in Seoul. LG Display Co., a maker of liquid-crystal displays, declined 2.1 percent to 26,250 won.

Raw-material producers posted the biggest decline among the 10 industry groups in the MSCI Asia Pacific Index (MXAP) today.

Australian iron-ore producers fell as benchmark prices of the commodity used to make steel slipped in China. Atlas sank 5.5 percent to A$1.38. Rio Tinto Group, the world’s second- largest producer of the metal, dropped 3.8 percent to A$48.63, a three-year low. Fortescue Metals Group Ltd. (FMG) fell 1.6 percent to A$3.59, the lowest close since May 2010.

BHP Falls

BHP Billiton Ltd. (BHP), the world’s largest mining company and Australia’s No. 1 oil producer, decreased 2.4 percent to A$31.99. Woodside Petroleum Ltd. slid 1.6 percent to A$34.09. Crude dropped a second day in New York as stockpiles unexpectedly rose.

China Cosco dropped 3.5 percent to HK$3.04 in Hong Kong, heading for its lowest close since Oct. 6. The company said its first-half net loss almost doubled from a year earlier to 4.87 billion yuan ($767 million) as freight rates fell amid a global shipping capacity glut and a deepening economic slowdown.

China Shipping Container Lines Co. (2866) slumped 11 percent to HK$1.57, the most on the regional benchmark index, after posting a first-half loss of 1.28 billion yuan, compared with a 630 million yuan loss a year.

Of the 566 companies in the Asia-Pacific index that have reported quarterly earnings since July 1, and for which Bloomberg has estimates, more than half failed to meet projections, according to data compiled by Bloomberg.

Asustek Soars

Among stocks that gained, Asustek Computer Inc. (2357) jumped 6.9 percent to NT$294.50 in Taipei, the biggest advance on the MSCI Asia Pacific Index, after posting second-quarter profit that exceeded analyst estimates.

Brilliance China Automotive Holdings Ltd., Bayerische Motoren Werke AG’s Chinese partner, climbed 4 percent to HK$7.31 in Hong Kong after saying first-half profit rose 42 percent, beating estimates as sales climbed.

The MSCI Asia Pacific Index fell 7.5 percent from this year’s high on Feb. 29 through yesterday. Stocks on Asia’s benchmark index were valued at 12.5 times estimated earnings on average, compared with 13.7 for the S&P 500 and 11.6 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Adam Haigh in Sydney at ahaigh1@bloomberg.net

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

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