Asian stocks fell, with the regional benchmark index heading to a six-month low, after U.S. jobs and factory data missed estimates and investors speculated whether the Federal Reserve will scale back bond purchases.
Techtronic Industries Co. (669), a maker of power tools that gets 73 percent of its sales in North America, dropped 2.3 percent in Hong Kong. Tokyo Electric Power Co. (9501) tumbled 7.4 percent, leading utilities lower. Newcrest Mining Ltd., the worst performer of Australia’s 20 largest companies this year, fell 6.9 percent after Credit Suisse Group AG cut its rating amid concern it will lower output and halt expansion. Rinnai Corp. (5947), a maker of gas appliances, slumped 7.9 percent in Tokyo on a share-sale plan.
The MSCI Asia Pacific Index slid 1.1 percent to 130.87 as of 8 p.m. in Tokyo. More than four shares fell for each that rose on the gauge, which is heading for the lowest close since Jan. 8. The measure is down 9.3 percent from this year’s high on May 20 amid concern the Federal Reserve may scale back stimulus and as Japanese stock indexes entered a correction last week.
“The Fed is putting out a feeler in the market with a stimulus-exit debate,” said Kiyoshi Ishigane, a Tokyo-based senior strategist at Mitsubishi UFJ Asset Management Co., which oversees the equivalent of $70 billion. “The market gets sold after mediocre economic reports, while being bought on good ones. It’s repeating that zigzag pattern.”
The MSCI Asia Pacific Index gained 2.3 percent this year through yesterday. The measure yesterday traded at 12.9 times average estimated earnings, compared with 14.6 for the Standard & Poor’s 500 Index and 13 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
A gauge of consumer discretionary companies in the Asia-Pacific index led gains this year as Japanese shares rallied on the back of a weaker yen and the promise of policies to end deflation. Energy companies had the biggest declines amid concern that China’s demand for fuel will drop as economic growth slows.
Japan’s Topix index slid 1.8 percent, reversing an earlier gain of 0.8 percent, after plunging 3.2 percent yesterday. The Tokyo Stock Exchange Mothers Index of smaller firms tumbled 13 percent, its biggest drop since March 14, 2011.
The Topix is down 16 percent from a May 22 five-year high, cuttings its 2013 advance to 25 percent. Japan’s broadest equity measure has swung an average of about 3.8 percent daily since May 23, when it had the biggest one-day plunge since the disaster.
Australia’s S&P/ASX 200 Index declined 1.1 percent and New Zealand’s NZX 50 Index was little changed. Taiwan’s Taiex Index retreated 1.1 percent and Singapore’s Straits Times Index dropped 1.5 percent. South Korea’s market was closed for a public holiday.
Hong Kong’s Hang Seng Index lost 1.1 percent and the Hang Seng China Enterprises Index of mainland companies slid 1.1 percent, capping the longest losing streak in a year. China’s Shanghai Composite Index fell 1.3 percent.
Futures on the S&P 500 Index rose 0.4 percent today after the gauge dropped 1.4 percent in New York yesterday, when a report from ADP Research Institute showed companies in the U.S. hired fewer workers than projected in May amid federal budget cuts and higher taxes. Separate data from the Commerce Department showed factory orders in April fell short of estimates.
The Fed’s Beige Book showed the U.S. economy expanded at a “modest to moderate” pace in 11 of 12 central-bank districts, with broad-based gains ranging from business services to construction and manufacturing. The survey is based on data collected by Fed regional banks on or before May 24.
Exporters to the U.S. dropped. Techtronic slid 2.3 percent to HK$19.42 and Mazda Motor Corp. (7261), a Japanese automaker that gets 29 percent of its sales in North America, dropped 4.4 percent to 349 yen in Tokyo.
Utilities fell, led by Japanese power companies. Tokyo Electric Power, the owner of the stricken Fukushima Dai-Ichi nuclear plant, tumbled 7.4 percent to 475 yen. Even after dropping 23 percent in the last two days, the company is still the best performing stock in the Nikkei 225 Stock Average (NKY) this year.
Newcrest Mining, Australia’s biggest gold producer, slid 6.9 percent to A$13.36, the lowest since June 2005. Citigroup Inc. and UBS AG have also downgraded the miner to sell, citing concerns over costs and expected production cuts.
Rinnai Corp. slumped 7.9 percent to 7,150 yen in Tokyo as it plans to raise as much as 22.5 billion yen ($227 million) in a share sale for capital spending, according to a filing with Japan’s Ministry of Finance.
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