Asian Stocks Fall Amid Mixed Earnings, Fed Concern

Photographer: Jerome Favre/Bloomberg

A traditional Chinese lion-dance figurine sits next to a dot matrix printer on a trader's desk at the Hong Kong Stock Exchange in Hong Kong. Trading in Hong Kong will resume today after being canceled yesterday because of a typhoon. Close

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Photographer: Jerome Favre/Bloomberg

A traditional Chinese lion-dance figurine sits next to a dot matrix printer on a trader's desk at the Hong Kong Stock Exchange in Hong Kong. Trading in Hong Kong will resume today after being canceled yesterday because of a typhoon.

Asian stocks fell, snapping the regional benchmark’s longest winning streak in six weeks, amid mixed corporate earnings across the region and after economists predicted the Federal Reserve will reduce stimulus next month.

Sony Corp., an electronics maker that gets 68 percent of sales overseas, slid 1.6 percent, pacing declines among Japanese exporters as the yen rose. Thai Beverage Pcl (THBEV), a brewer controlled by billionaire Charoen Sirivadhanabhakdi, sank 5.2 percent in Singapore after posting lower sales and profit. Li & Fung Ltd., the world’s biggest supplier of toys and clothes to retailers, jumped 12 percent in Hong Kong after saying business is recovering.

The MSCI Asia Pacific Index dropped 0.7 percent to 135.09 as of 6:11 p.m. in Tokyo, with about three shares falling for each that rose. All 10 industry groups on the gauge declined. The measure climbed 8 percent through from this year’s low on June 25.

“The market’s had a good run over the last few weeks, so we’re likely to see a bit of selling pressure today,” Matthew Sherwood, head of investment markets research in Sydney at Perpetual Investments, which manages about $25 billion, said by telephone. “We’ve had a few results that missed expectations and the reporting season has been pretty mixed. The jobless claims will be watched as that’s regarded as a very good leading indicator for the U.S.”

Asian Earnings

While the Asia-Pacific benchmark stock index rose for the past five days, about 50 percent of members that have reported earnings this season posted profits that beat analyst estimates, data compiled by Bloomberg show. A report today may show U.S. jobless claims fell in the week to Aug. 3, fueling speculation that has 65 percent of economists surveyed by Bloomberg predicting the Fed will pare bond purchases next month.

Japan’s Topix index slid 1.7 percent, while the benchmark Nikkei 225 Stock Average dropped 2.1 percent. Japanese exporters declined as the yen climbed as much as 0.6 percent against the dollar today. A stronger Japanese currency reduces the overseas income of the nation’s carmakers and electronics manufacturers when repatriated.

The Topix surged 34 percent this year, retaining Japan’s position as the world’s best-performing developed equity market, amid optimism Prime Minister Shinzo Abe will push through reforms while the central bank provides record stimulus to spur a recovery in Asia’s second-largest economy.

Regional Gauges

Hong Kong’s Hang Seng Index (HSI) closed little changed, paring gains of as much as 0.7 percent. The gauge briefly erased this year’s losses this morning. Trading in the city resumed today after being canceled yesterday due to a typhoon. China’s Shanghai Composite Index dropped 0.9 percent.

Taiwan’s Taiex index slipped 0.8 percent. Singapore’s Straits Times Index declined 0.9 percent. Australia’s S&P/ASX 200 Index slipped 0.1 percent and New Zealand’s NZX 50 Index added 0.1 percent. Indian and South Korean markets are closed.

The MSCI Asia Pacific gauge traded at 13.1 times estimated earnings, compared with 15.3 yesterday for the Standard & Poor’s 500 Index and 14.1 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Futures on the Standard & Poor’s 500 Index fell 0.1 percent today. U.S. stocks dropped yesterday to the lowest since July 29 as Macy’s Inc. paced a drop in retailers after reducing its earnings forecast and as speculation heightened that the Fed will reduce stimulus in September.

Fed Stimulus

The Fed will probably reduce its $85 billion in monthly bond purchases at its meeting on Sept. 17-18, according to 65 percent of economists surveyed by Bloomberg. Data yesterday showed the euro area’s economy emerged from a record-long recession in the second quarter, led by Germany and France. Gross domestic product expanded 0.3 percent after contracting six quarters, the European Union’s statistics office said.

Japanese exporters declined as the yen headed for a second day of advance. Sony, the maker of Bravia televisions and PlayStation game consoles, dropped 1.6 percent to 1,968 yen. Panasonic Corp. (6752), Japan’s biggest consumer electronics maker, fell 3.2 percent to 858 yen. Nissan Motor Co., which gets about 80 percent of sales overseas, lost 1.5 percent to 1,039 yen.

Kubota Corp. (6326), a tractor maker that gets 23 percent of its sales from North America, dropped 3.2 percent to 1,474 yen after rival Deere & Co. forecast a decline in U.S. farm revenue.

Thai Beverage sank 5.2 percent to 54 Singapore cents. Second-quarter profit slipped 2 percent from a year earlier to 4.92 billion baht ($157.4 million) as sales declined 11 percent.

SM Investments Corp. (SM), the holding company of Philippine billionaire Henry Sy, declined 7.7 percent to 805.50 pesos in Manila. The stock’s weighting was cut in the MSCI Emerging Markets Index, according to Societe Generale SA.

PT Matahari Department Store (LPPF), Indonesia’s largest retailer, climbed 7.7 percent to 14,000 rupiah after the stock was added to the MSCI Emerging Markets Index.

Li & Fung

Li & Fung jumped 12 percent to HK$11.76 in Hong Kong, its biggest gain since April 2009. Orders for the second half are “solid,” Chief Executive Officer Bruce Rockowitz said on Aug. 13.

AMP Ltd. rose 3.5 percent to A$4.70 after Australia’s biggest life insurer and pension manager posted profit that beat estimates.

To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Emma O’Brien in Wellington at eobrien6@bloomberg.net

To contact the editor responsible for this story: Sarah McDonald at smcdonald23@bloomberg.net

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