Asian stocks plunged, with a gauge of Chinese companies listed in Hong Kong erasing the year’s gains, amid concern the Federal Reserve may scale back U.S. economic stimulus and as China ordered increased property curbs.
The MSCI Asia Pacific Index dropped 1.4 percent to 133.31 as of 7:59 p.m. in Tokyo, at one point heading for its biggest single-day decline since July. The Hang Seng China Enterprises Index tumbled 2.2 percent, erasing the year’s advance, and the CSI 300 Index (SHSZ300) of mainland-listed shares plummeted by the most in more than 18 months after China ordered local authorities to do more to rein in property speculation. More than three stocks fell for each that rose on the Asia-Pacific measure, which closed yesterday at the highest level since August 2011.
Guangzhou R&F Properties Co. (2777) lost 1.6 percent in Hong Kong, pacing declines among Chinese developers. BHP Billiton Ltd. (BHP), the world’s biggest mining company, dropped 3.8 percent, the most since May, on concern that global demand will decrease if policy makers reduce stimulus.
“Overseas markets didn’t do well overnight and there are rumors China may tighten the property market, and the central bank has withdrawn liquidity from the capital market the last couple of weeks in China -- all these are negative,” said Benjamin Tam, a fund manager who helps oversee about $1.5 billion at IG Investment in Hong Kong. “Many people may take money off the table, and everyone doing the same thing at the same time could trigger some selling pressure.”
The People’s Bank of China drained 910 billion yuan ($146 billion) from the financial system this week, according to data compiled by Bloomberg. That was the biggest withdrawal since Bloomberg started compiling the data in 2008.
The MSCI Asia Pacific Index advanced 11 percent from the start of November through yesterday, led by Japanese shares as Prime Minister Shinzo Abe pledged to beat deflation and pressed the central bank to ease monetary policy. Asia’s benchmark traded at 14.9 times estimated earnings as of yesterday compared with 13.7 for the Standard & Poor’s 500 Index (SPX) and 12.5 for the Stoxx Europe 600 Index (SXXP), according to data compiled by Bloomberg.
Hong Kong’s Hang Seng Index declined 1.7 percent, while China’s Shanghai Composite Index (SHCOMP) lost 3 percent, the biggest drop since November 2011.
Japan’s Nikkei 225 Stock Average (NKY) fell 1.4 percent. South Korea’s Kospi (KOSPI) Index lost 0.5 percent after yesterday rising the most since September. Australia’s S&P/ASX 200 Index dropped 2.3 percent, its biggest loss since May.
Taiwan’s Taiex Index (TWSE) slid 0.9 percent and Singapore’s Straits Times Index dropped 0.6 percent. New Zealand’s NZX 50 Index fell 1 percent.
Futures on the S&P 500 Index (SPXL1) slipped 0.4 percent today. The equity gauge fell 1.2 percent in New York yesterday, the biggest drop since November, as minutes of the Federal Open Market Committee’s Jan. 29-30 meeting showed policy makers were divided about the strategy behind Chairman Ben S. Bernanke’s program of buying bonds, known as quantitative easing, until there is “substantial” improvement in a U.S. labor market.
Some said an earlier end to purchases might be needed, and others warned against a premature withdrawal of stimulus. Several policy makers said the central bank should be ready to vary the pace of its $85 billion in monthly bond purchases.
Mainland developers fell after Chinese Premier Wen Jiabao called for local authorities to “decisively” curb real-estate speculation and take steps to rein in the property market.
Guangzhou R&F Properties slid 1.6 percent to HK$12.48. Country Garden Holdings Co. (2007) lost 3.3 percent to HK$3.76.
“They are trying to control the property market and that is not a good thing for the short term, but it’s something China has to go through,” said Mikio Kumada, a Hong Kong-based global strategist for LGT Capital Partners, which oversees more than $20 billion.
Raw material producers and energy companies posted the biggest decline among the 10 industry groups in the MSCI Asia Pacific Index after the S&P GSCI Index of commodities retreated a fourth straight day, the longest such streak since December.
BHP dropped 3.8 percent to A$37.17 in Sydney. Jiangxi Copper Co. (358), China’s biggest supplier of the metal, sank 3.2 percent to HK$18.74 in Hong Kong. Cnooc Ltd., the nation’s largest offshore oil producer, slipped 1.2 percent to HK$15.54.
Belle International Holdings Ltd. plunged 17 percent to HK$15.28, the biggest decliner on the MSCI Asia Pacific Index. The seller of women’s footwear said its 2012 profit will be at the lower end of analysts’ estimates ranging from 4.29 billion yuan to 4.85 billion yuan. The stock’s rating was downgraded to fully-valued from hold at DBS Vickers Hong Kong Ltd.
Of the 353 companies on the MSCI Asia Pacific Index that have reported quarterly earnings and for which Bloomberg has estimates, 49 percent exceeded profit expectations.
Origin Energy Drops
Origin Energy Ltd. slumped 8.5 percent to A$11.33 in Sydney after Australia’s biggest electricity retailer cut its profit forecast and reported a cost increase at its A$25 billion ($26 billion) gas project.
Among stocks that gained, GS Yuasa Corp., which makes batteries for Boeing Co., jumped 8 percent to 352 yen in Tokyo on optimism the plane manufacturer is preparing fixes for battery problems that grounded the 787 Dreamliner. The stock posted the biggest gain on the MSCI measure.
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