Asian Stocks Drop as China, Japan Data Signal Slowodown

Asian stocks dropped a second day after Japan’s largest manufacturers became more pessimistic and China’s factory output shrank for a second month amid a global economic slowdown that has sapped export demand.

Toyota Motor Corp. (7203), the world’s biggest carmaker by market value, fell 1.7 percent. Nippon Shokubai Co. plunged 13 percent after a deadly fire shut output at one of the chemical maker’s factories. BEC World Pcl, Thailand’s biggest publicly traded television broadcaster, tumbled 20 percent after its chief financial officer said the stock’s rally couldn’t be justified. Arrium Ltd., an Australian iron ore producer, surged 25 percent after rejecting a bid from companies led by Noble Group Ltd.

The MSCI Asia Pacific Index declined 0.4 percent to 121.98 as of 6:30 p.m. in Tokyo. About two shares fell for each that rose on the gauge, with markets in China, Hong Kong and South Korea closed for holidays. The regional benchmark slid 0.9 percent in the previous two weeks amid concern political discord would keep Europe from resolving its debt crisis.

“People still have to downgrade their assumptions for economic growth, and that will probably flow through the next quarter or next half in lower profit assumptions for companies,” said Tim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “Given markets are closed in many parts, I think we are probably in for a relatively quiet, but soft start to the week.”

Japanese Cabinet

Japan’s Nikkei 225 Stock Average (NKY) slipped 0.8 percent. Prime Minister Yoshihiko Noda appointed Koriki Jojima the fifth finance minister in three years as part of a cabinet reshuffle ahead of an election that may come by the end of the year.

Taiwan’s Taiex Index lost 0.5 percent and Singapore’s Straits Times Index slipped 0.2 percent. Australia’s S&P/ASX 200 Index was little changed, with volume 52 percent below the 30- day average as many businesses were closed for a public holiday. India’s Sensitive Index added 0.3 percent.

Futures on the Standard & Poor’s 500 Index rose 0.5 percent today. The index dropped 0.5 percent in New York on Sept. 28, capping the biggest weekly loss since June, after reports showed business activity contracted in September and consumer spending stalled in August. Data due Oct. 5 is expected to show the jobless rate increased last month.

Exporters Drop

Exporters declined as reports from South Korea, India, China and Japan pointed to a regional slowdown. Indian manufacturing growth held at a nine-month low in September, a private survey showed, while South Korean exports fell for a third month. China’s purchasing managers’ index signaled for a second month that manufacturing is contracting, the first time that’s happened since 2009.

Japan’s Tankan index of sentiment among large industrial companies fell to minus 3, posting a negative reading for a fourth quarter, the Bank of Japan said today. A number below zero figure means pessimists outnumber optimists.

Toyota dropped 1.7 percent to 2,989 yen in Tokyo. AU Optronics Corp. (2409), Taiwan’s second-largest maker of liquid crystal displays, sank 1.9 percent to NT$10.40 in Taipei. Creative Technology Ltd., a maker of music players that compete with Apple Inc.’s iPod, slid 1.5 percent to S$3.25 in Singapore.

Nippon Shokubai, which supplies a third of the global market for chemicals used in diapers, slumped 13 percent to 757 yen in Tokyo, the most since October 1987, after a fire at its western Japan factory on Sept. 29 led to a death and stopped output.

Unjustified Rally

BEC World plunged 20 percent to 61.50 baht in Bangkok, the most on the MSCI Asia Pacific Index. The Stock Exchange of Thailand should investigate a last minute trade that caused a 30 percent rally on BEC World’s shares on Sept. 28, Chatchai Thiamtong, the company’s CFO said in a phone interview today. The gain wasn’t justified because the company has no news or information that could have affected the share price, he said.

The MSCI Asia Pacific Index (MXAP) climbed 7.1 percent this year, compared with a 15 percent gain on the S&P 500 and an 9.8 percent increase on the Stoxx Europe 600 Index. The Asian benchmark traded at 12.8 times estimated earnings compared with 13.9 for the S&P 500 and 11.9 for the Stoxx 600.

PAL Holdings Inc. tumbled 15 percent to 6.40 pesos in Manila after the Philippine Star newspaper reported unit Philippine Airlines is in talks to buy a regional airline, citing PAL President Ramon Ang. Ang couldn’t be reached for comment.

“The market doesn’t think it’s rational for the company to be making these huge investments until its house cleanup is completed and its return to profit is sustained,” said James Lago, head of research at Manila-based PCCI Securities Brokers Corp.

Among stocks that advanced, Arrium jumped 25 percent to 68 Australian cents. The company rejected an offer from a consortium led by Noble Group and Posco Australia Pty. to buy its shares at 75 Australian cents apiece, saying the offer “undervalues Arrium.”

Olympus Corp. gained 1.3 percent to 1,540 yen in Tokyo after Sony Corp. announced plans to invest 50 billion yen ($642 million) in the endoscope maker.

To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@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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