Asian Stocks Fall as Technology Shares Drop; TSMC Slides

Photographer: Kiyoshi Ota/Bloomberg

A woman with an umbrella walks past Japan Exchange Group Inc.'s Tokyo Stock Exchange (TSE) in Tokyo. Close

A woman with an umbrella walks past Japan Exchange Group Inc.'s Tokyo Stock Exchange (TSE) in Tokyo.

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Photographer: Kiyoshi Ota/Bloomberg

A woman with an umbrella walks past Japan Exchange Group Inc.'s Tokyo Stock Exchange (TSE) in Tokyo.

Asian stocks fell, with the regional benchmark index set to decline for a third day, as Advantest (6857) Corp. and Taiwan Semiconductor Manufacturing Co. led technology stocks lower.

Advantest, the world’s biggest maker of chip-manufacturing equipment, sank 7 percent in Tokyo after Nomura Holdings Inc. lowered its rating on the stock. TSMC, as the No. 1 contract manufacturer of chips is known, dropped 6.9 percent in Taipei after forecasting sales that trailed estimates. Orica Ltd., the largest maker of industrial explosives, slumped 13 percent in Sydney after saying profit may drop by a tenth.

The MSCI Asia Pacific Index fell 0.5 percent to 134.83 as of 7:07 p.m. in Tokyo, with more than two shares slipping for each that rose. The gauge, which is little changed for the week, dropped 6.1 percent through yesterday from this year’s high on May 20 amid concern the Federal Reserve will start tapering monetary stimulus as the U.S. economy improves.

“The recovery in the U.S. is still sluggish and investors are concerned growth may not be sustained if the stimulus is withdrawn prematurely,” said Lee King Fuei, a Singapore-based fund manager at Schroders Plc, which oversees more than $300 billion. “I won’t be too bearish on Asian equities at this stage. Another 8-10 percent correction should give long-term investors a good entry level.”

Fed Chairman Ben S. Bernanke said yesterday it was “way too early to make any judgment” about starting to taper stimulus in September. Tighter financial conditions as a result of rising yields over the past two months are “unwelcome,” Bernanke said in response to a question from the Senate Banking Committee following his testimony yesterday.

Japanese Elections

Japan’s Topix index dropped 0.8 percent, its first decline in five days and paring a fifth straight weekly advance. The benchmark Nikkei 225 Stock Average slid 1.5 percent.

Japanese shares have topped gains this year among 24 major developed equity markets tracked by Bloomberg News. The Topix surged 42 percent through yesterday and the Nikkei 225 soared 43 percent as Prime Minister Shinzo Abe and Bank of Japan Governor Haruhiko Kuroda pushed to stoke the nation’s inflation rate to 2 percent. Elections on July 21 are expected to give Abe a mandate to pursue economic reforms.

“There’s some profit-taking ahead of elections,” said Seiichiro Iwamoto, who helps oversee the equivalent of $33 billion at Mizuho Asset Management Co. “Abe winning the upper house is already priced in, and there’s a feeling that all the good news is out already. Shares should start rising again once we see good earnings results.”

Regional Gauges

South Korea’s Kospi slid 0.2 percent, while Taiwan’s Taiex index dropped 1.6 percent. Australia’s S&P/ASX 200 Index lost 0.4 percent and New Zealand’s NZX 50 Index fell 0.6 percent. China’s Shanghai Composite Index declined 1.5 percent. Hong Kong’s Hang Seng Index added 0.1 percent.

The Asia-Pacific measure advanced 4.8 percent this year through yesterday. That left the Asian benchmark gauge trading at 13.3 times estimated earnings, compared with 15.3 times for the Standard & Poor’s 500 Index and 13.4 times for the Stoxx Europe 600 Index.

Futures on the S&P 500 Index dropped 0.1 percent after rising 0.5 percent to a record yesterday. Claims for jobless benefits in the U.S. dropped to the lowest since early May, less than the median economist estimate, data released yesterday showed. A separate report showed Philadelphia’s general economic index surged to a two-year high.

A gauge of information technology companies led declines among the 10 industry groups in the MSCI Asia Pacific Index, according to data compiled by Bloomberg.

Advantest, TSMC

Advantest dropped 7 percent to 1,529 yen in Tokyo after Nomura cut its rating to neutral from buy.

TSMC declined 6.9 percent to NT$98.20 in Taipei. The company yesterday forecast third-quarter sales of as much as NT$164 billion ($5.5 billion) in the three months through September. That compared with the NT$164.5 billion average of 25 analyst estimates compiled by Bloomberg.

FIH Mobile Ltd. (2038), a contract maker of phones for Nokia Oyj and BlackBerry, dropped 3.2 percent to HK$3.94 in Hong Kong. Finnish mobile-phone maker Nokia yesterday reported revenue that missed analysts’ estimates.

Orica slumped 13 percent to A$18.19. The explosives maker said profit before exceptional items will fall 10 percent to about A$585.2 million ($537 million) in the year ending September amid weaker demand.

Chinese Jewelers

Chinese jewelry retailers declined after the People’s Daily Online, citing unidentified people, reported that the National Development & Reform Commission is investigating price manipulation by some gold shops in Shanghai, including those owned by Chow Tai Fook Jewellery Group Ltd. and Chow Sang Sang Holdings International Ltd.

Chow Tai Fook (1929), the world’s biggest jewelry chain, slid 1.7 percent to HK$9.48 in Hong Kong. Chow Sang Sang fell 1.2 percent to HK$16.98. Cathy Tam, assistant manager of communications at Chow Sang Sang, said over the phone the jeweler is not under investigation.

Among stocks that advanced, GCL-Poly Energy Holdings Ltd. gained 4.3 percent to HK$1.96 in Hong Kong. Shares of the world’s biggest producer of polysilicon surged after China announced it was imposing duties of as much as 57 percent on shipments from the U.S. and South Korea of the material used for making solar panels.

OCI Ltd. jumped 4.9 percent to 160,000 won in Seoul after China imposed the lowest tariff for polysilicon shipped by the company.

To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net

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

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