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Asian Stocks Drop After Two-Day Gain; Nikkei 225 Rises

Asian shares dropped, with the regional benchmark index snapping two days of gains, led by Samsung Electronics Co. and Australian banks. The Nikkei 225 Stock Average pared gains after the Bank of Japan rejected a call for an immediate start to open-ended asset purchases.

Samsung, which yesterday announced it will invest 10.4 billion yen ($111 million) in troubled Japanese electronics maker Sharp Corp., fell 2.6 percent in Seoul. Sharp tumbled 7.9 percent. Australia & New Zealand Banking Group Ltd., Australia’s No. 3 lender by market value, slid 0.8 percent after announcing plans to cut jobs and as the nation reported a bigger-than- expected trade deficit. Honda Motor Co. (7267), Japan’s second-biggest automaker by market value, pared gains to 0.6 percent in Tokyo.

The MSCI Asia Pacific Index slipped 0.3 percent to 135.44 as of 7:38 p.m. in Tokyo, erasing a gain of less than 0.1 percent. About the same number of shares rose as fell the index, which capped a four-month advance in February, the longest such winning streak since September 2009, as central banks maintained loose monetary policy to support economic growth.

“The market is certainly not as cheap, but we don’t think it’s overpriced,” said Angus Gluskie, managing director at Sydney-based White Funds Management, which oversees more than $350 million. “Most investors believe the growth upside outweighs the risks.”

Shares on the MSCI Asia-Pacific Index traded at 14.9 times estimated earnings compared with 13.9 for the Standard & Poor’s 500 Index and 12.6 for the Stoxx Europe 600, according to data compiled by Bloomberg.

Australian Trade

Australia’s S&P/ASX 200 Index slipped 0.2 percent. The nation’s trade deficit was twice as wide as economists forecast in January as floods in the northeastern state of Queensland disrupted coal exports and telecommunications equipment imports surged.

South Korea’s Kospi Index declined 0.8 percent. Hong Kong’s Hang Seng Index was little changed. China’s Shanghai Composite Index slid 1 percent, while Taiwan’s Taiex Index increased 0.1 percent.

Japan’s Nikkei 225 rose 0.3 percent, paring a gain of as much as 1.2 percent.

Futures on the Standard & Poor’s 500 Index climbed 0.2 percent today. The U.S. equity gauge gained 0.1 percent yesterday and the Dow Jones Industrial Average extended its record high after a report by the ADP Research Institute Research Institute showed companies added more workers than expected in February.

Factory Orders

A U.S. Labor Department report due tomorrow may show private payrolls rose by 170,000 last month, according to the median estimate in a Bloomberg survey of economists. Orders to U.S. factories fell in January, weighed down by a slump in demand for military hardware and commercial aircraft, the Commerce Department reported yesterday.

Samsung slid 2.6 percent to 1,520,000 won, the biggest drag on the MSCI Asia Pacific Index. (MXAP) The South Korean company will acquire 3 percent of Sharp for 10.4 billion yen to secure liquid-crystal displays for smartphones and televisions.

Sharp fell 7.9 percent to 314 yen, its biggest decline since Oct. 9, paring yesterday’s 14 percent jump. The company may suffer from the deal as Samsung may demand priority supply with preferential prices, according to a report by analyst Yasuo Nakane at Deutsche Bank AG.

Job Cuts

Australia & New Zealand Banking Group declined 0.8 percent to A$29.01. The lender announced plans to cut about 50 jobs in institutional and international banking as lenders trim costs amid weak credit demand.

The bank also fell after the Bureau of Statistics said the country’s trade deficit was twice as wide as economists forecast in January. Westpac Banking Corp. also sank 1.2 percent.

Japanese shares pared gains after the Bank of Japan concluded a two-day policy meeting today. The central bank decided to keep the asset-purchase fund unchanged at 76 trillion yen, while rejecting a call for an immediate start to open-ended asset purchases due to begin next year.

Honda, which earlier rose as much as 1.6 percent, pared gains to 0.6 percent. Sumitomo Mitsui Financial Group Inc. (8316), Japan’s second-largest bank by market value, dropped 2.5 percent to 3,755 yen, the second-biggest drag on the MSCI Asia Pacific Index.

GS Yuasa Corp., which makes batteries for Boeing Co., surged 9 percent 437 yen, the second-biggest jump on the MSCI Asia Pacific Index, following a Reuters report that U.S. authorities may allow 787 Dreamliner flight tests with a fix for a battery problem blamed for fires on the planes.

To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Anna Kitanaka in Tokyo at akitanaka@bloomberg.net

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

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