Asian stocks outside Japan fell even after a report that China’s manufacturing is accelerating as Apple Inc. (AAPL) suppliers dropped after the iPhone maker reported its weakest sales since 2009 and North Korea threatened a nuclear test. Japanese shares rallied on a weaker yen after China’s manufacturing beat estimates.
AAC Technologies Holdings Inc. (2018), which makes speakers for Apple, dropped 6 percent in Hong Kong. Tata Motors Ltd. retreated 6.6 percent in Mumbai after the Indian automaker’s Jaguar Land Rover Plc unit said profit growth probably stalled in the fiscal third quarter. Toyota Motor Corp. (7203), a Japanese automaker that gets more than a quarter of its revenue from North America, rose 2.2 percent in Tokyo.
The MSCI Asia Pacific excluding Japan Index dropped 0.4 percent to 477.73 as of 7:25 p.m. in Hong Kong after rising as much as 0.1 percent. About three stocks declined for every two that gained. The MSCI Asia Pacific Index, which includes Japan, slid 0.3 percent. The gauge jumped 10 percent through yesterday from Nov. 14, when elections were announced in Japan, spurring a rally in the country’s shares amid speculation the new government would take necessary steps to end deflation.
“There’s more caution in Asia,” said Ayako Sera, a market strategist at Sumitomo Mitsui Trust Bank Ltd., which has 33 trillion yen ($369 billion) in assets. “The long-term trend of emerging countries growing faster than developed countries still remains.”
Shares in Asia reversed or pared gains after the official Korean Central News Agency said North Korea will conduct a nuclear test “targeted” at the U.S. after the Obama administration pushed through additional sanctions at the United Nations.
The MSCI Asia Pacific Index, the benchmark regional equities gauge, traded at 14.2 times average estimated earnings compared with 13.5 for the Standard & Poor’s 500 Index and 12.2 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Hong Kong’s Hang Seng Index fell 0.2 percent. China’s Shanghai Composite Index (SHCOMP) retreated 0.8 percent after the gauge jumped as much as 1.8 percent earlier as a private survey of companies showed China’s manufacturing is expanding at the fastest rate in two years.
The preliminary reading of a Purchasing Managers’ Index was 51.9 in January, according to a statement from HSBC Holdings Plc and Markit Economics today. That compares with the 51.5 final reading for December and the 51.7 median estimate of 17 analysts surveyed by Bloomberg News. A reading above 50 indicates expansion.
‘Recovery on Track’
“The China manufacturing data was fantastic and more confirmation that the Chinese economic recovery is on track,” said Shane Oliver, Sydney-based head of strategy at AMP Capital Investors Ltd., which has about $126 billion under management. “It’s good for Chinese growth, Asian regional growth and the global economy given the contribution China makes to global growth. But the question is whether that’s fully priced into stocks.”
Japan’s Nikkei 225 Stock Average climbed 1.3 percent, rising the first time in four days, even after the nation’s December exports fell more than expected, dropping 5.8 percent from a year earlier. The yen weakened, snapping a three-day advance against the dollar that saw the equity benchmark yesterday cap its longest losing streak in two months.
The yen extended losses after Japan’s Deputy Economy Minister Yasutoshi Nishimura said its correction from high levels “isn’t over yet.” A weaker yen boosts overseas income at Japanese companies when repatriated.
Toyota rose 2.2 percent to 4,245 yen, while Sony Corp., an exporter of consumer electronics, advanced 1.9 percent to 1,189 yen.
Dainippon Sumitomo Pharma Co. (4506) surged 16 percent to 1,270 yen in Tokyo after public broadcaster said the drugmaker will soon apply for clinical trials in Japan on world’s first medicine to target cancer stem cells.
Lenovo Group Ltd. (992), a Chinese personal-computer maker, rose 6.6 percent to HK$8.43 in Hong Kong on a report the company’s smartphone business in China turned profitable.
Australia’s S&P/ASX 200 Index (AS51) advanced 0.5 percent. South Korea’s Kospi Index lost 0.8 percent after a report showed the economy expanded less than estimated in the fourth quarter. Taiwan’s Taiex Index dropped 0.6 percent.
Futures on the Standard & Poor’s 500 Index fell 0.2 percent today. The S&P 500 Index (SPX) yesterday closed at the highest level in five years as lawmakers voted to temporarily suspend the federal debt limit, and Google Inc. and International Business Machines Corp. shares rallied amid better-than-forecast earnings.
Nasdaq 100 Index futures fell 1.3 percent after Apple reported its slowest profit expansion since 2003 and weakest sales increase in 14 quarters amid rising costs and accelerating competition with Samsung Electronics Co. The results reinforce investor concerns about Apple’s growth after the stock fell 27 percent since September.
AAC Technologies slumped 6 percent to HK$28.20 in Hong Kong. Ibiden Co. (4062), an electronics substrate maker that supplies Apple, slid 4.7 percent to 1,248 yen in Tokyo. Hon Hai Precision Industry Co., which assembles Apple products, dropped 2.9 percent to NT$82.50 in Taipei.
Among other stocks that fell, Tata Motors, which derived three quarters of its operating income from Jaguar Land Rover in the last financial year, declined 6.3 percent to 293.45 rupees in Mumbai. The stock was the biggest drag on the benchmark BSE India Sensitive Index.
Huabao International Holdings Ltd., a provider of tobacco flavors, tumbled 11 percent to HK$4.31 in Hong Kong after going ex-dividend today. It was the biggest decline on the MSCI Asia Pacific Index.
Yaskawa Electric Corp (6506) slumped 4.1 percent to 793 yen in Tokyo after the robotics maker’s third-quarter operating profit missed analyst estimates.
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