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Most Asia Stocks Outside Japan Fall After Rally Through New Year

Most Asian stocks outside Japan fell this week as investors locked in profits after a rally through the first week of the year and amid mixed economic reports from China.

China Resources Land Ltd. (1109), a state-controlled developer, slumped 3.6 percent in Hong Kong on speculation there will be less room for monetary easing after consumer prices rose. BHP Billiton Ltd. (BHP), the world’s No. 1 mining company by market value, dropped 3.2 percent after climbing 15 percent through seven straight weekly gains. Japanese shares capped their longest streak of weekly gains in more than 20 years as the nation’s government announced 10.3 trillion yen ($116 billion) in further stimulus measures.

The MSCI Asia Pacific Index (MXAP) fell 0.1 percent to 131.82 this week after a seven-week winning streak, the longest in almost a year. The MSCI Asia Pacific excluding Japan slipped less than a 10th of a percentage point, with more than six stocks falling for every five that rose, while the MSCI Japan Index (MXJP) jumped 1.1 percent in its eighth weekly gain.

“We don’t expect a no-brainer, one-way climb for stocks,” said Michael Kurtz, chief global equity strategist at Nomura Holdings Inc. in Hong Kong. “Japan for its part has delivered a key step toward expectations of a major pro-reflation policy shift.”

The benchmark Asia gauge climbed 14 percent in 2012 as central banks from the U.S., Europe, Japan and China took action to spur economic growth.

Stocks on the index were at about 14.2 times estimated earnings, compared with multiples of 13.3 for the Standard & Poor’s 500 Index and 12 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

1989 Peak

Japan’s Nikkei 225 Stock Average (NKY) rose 1.1 this week, a ninth straight advance. The Topix Index, the country’s broadest measure of share price performance, also rose for a ninth week, the longest such streak since it hit an all-time high in December 1989.

South Korea’s Kospi Index (KOSPI) dipped 0.8 percent as the nation’s central bank left its key rate unchanged as expected. Singapore’s Straits Times Index slipped 0.3 percent. Taiwan’s Taiex Index increased 0.2 percent. The Philippine Stock Exchange Index gained 1.3 percent, reaching a record close on Jan. 9.

Australia’s S&P/ASX 200 Index dropped 0.3 percent this week as BHP fell 3.2 percent to A$36.68 and Commonwealth Bank of Australia slid 3 percent to A$61.38 after an 8.5 percent, seven week rally through Jan 4.

Hong Kong’s Hang Seng Index (HSI) sank 0.3 percent this week. The Shanghai Composite Index (SHCOMP) fell 1.5 percent. China’s inflation in December accelerated to a seven-month high as the nation’s coldest winter in 28 years pushed up vegetable prices.

China CPI

China’s consumer price index rose 2.5 percent from a year earlier in December, the National Bureau of Statistics said yesterday, a pickup that may limit room for easing to support an economic recovery.

China Resources Land dropped 3.6 percent to HK$22.65 in Hong Kong, while China Overseas Land & Investment Ltd., the biggest mainland developer by value listed in Hong Kong, retreated 0.4 percent to HK$24.60. Both companies last week reached record highs.

“The market lacks catalysts for more gains in January and needs to consolidate,” said Li Jun, a strategist at Central China Securities Co. in Shanghai. “Inflation is a potential threat to the market. Though it won’t trigger an immediate interest-rate increase, it will weigh on investors’ sentiment.”

Shippers Rally

While Chinese property developers dropped, shipping companies rallied after the nation’s customs office on Jan. 10 said China’s exports rose 14.1 percent from a year earlier in December, and imports increased 6 percent.

China Cosco Holdings Co. (1919), the world’s largest operator of dry-bulk ships, surged 8.6 percent to HK$4.56 this week in Hong Kong while China Shipping Container Lines Co. advanced 5.3 percent to HK$2.57.

Japanese exporters gained as the nation’s currency depreciated and as the government announced a stimulus package including 3.8 trillion yen for disaster prevention and 3.1 trillion yen to stimulate investment. The plan will increase gross domestic product by about 2 percentage points and create about 600,000 jobs, according to the Cabinet Office.

Japanese Exporters

The yen traded near a 2 1/2 year low against the dollar this week, boosting the value of overseas earnings for Japanese companies.

Honda Motor Co., a Japanese carmaker that gets about 43 percent of sales from North America, gained 3.4 percent to 3,380 yen this week in Tokyo.

Sharp Corp. (6753), Japan’s biggest maker of liquid-crystal displays, soared 12 percent to 330 yen. The company, which gets more than half its revenue from overseas, had an operating profit of about 20 billion yen in the three months ended Dec. 31, the Mainichi newspaper reported, without saying where it got the information.

BEC World Pcl (BEC), Thailand’s biggest publicly traded television broadcaster, fell 11 percent in Bangkok after Macquarie Group Ltd. and Kasikorn Securities Pcl cut their rating on the shares to underperform from neutral.

Hyosung Corp. (004800), a chemicals and trading company, slumped 11 percent to 66,400 won in Seoul after Kiwoom Securities Co. cut its price target to 87,000 won from 93,000 won, citing the company’s slower-than-expected pace of earnings recovery.

Aluminum producers rose after industry bellwether Alcoa Inc. reported fourth-quarter sales that exceeded analysts’ estimates. Alumina Ltd. (AWC), a supplier of the material used to make aluminum, surged 15 percent to A$1.09 in Sydney, while Aluminum Corp. of China Ltd., the nation’s biggest supplier of the light metal, climbed 3.4 percent to HK$3.95 in Hong Kong.

BYD Co. (1121), the Chinese carmaker partly owned by Warren Buffett’s Berkshire Hathaway Inc. rose 13 percent to HK$25.85 after CCB International raised its rating on the stock to neutral from underperform.

To contact the reporters on this story: Kana Nishizawa in Hong Kong at knishizawa5@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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