Asian stocks fell as investors shied away from riskier assets after an unexpected drop in U.S. jobless claims fueled speculation the Federal Reserve will cut stimulus next month. Chinese shares reversed the biggest intraday surge since March 2009.
Australia & New Zealand Banking Group Ltd. (ANZ) sank 3 percent after Australia’s third-largest bank by market value forecast interest margins will keep dropping. Hyundai Merchant Marine Co. jumped 6.9 percent in Seoul after North Korea and South Korea agreed to reopen the Gaeseong industrial complex. Chinese stock exchange officials are investigating a spike in the Shanghai Composite Index, which soared from a loss of as much as 1 percent to a gain of 5.6 percent in two minutes. Everbright Securities Co. said it experienced a trading error.
The MSCI Asia Pacific Index slid 0.4 percent to 134.37 at the close of trading, with all but two of the 10 industry groups on the gauge retreating. More than two shares dropped for each that rose. The measure gained 0.4 percent this week.
“We expect the slowdown in U.S. bond purchases to happen sooner rather than later,” John Milroy, a strategist at Macquarie Private Wealth, told Bloomberg TV in Sydney. “It’s the key question for markets at the moment. There was a point where it had to stop and you do get some reason to see profit taking.”
The Asia-Pacific gauge gained 4.2 percent this year through yesterday, lagging a 16 percent surge on the Standard & Poor’s 500 Index (SPX), as growth slows in China, the world’s second-largest economy, and speculation the Fed will curb U.S. bond buying spurred international investors to sell assets perceived riskier across Asia and emerging markets.
China’s Shanghai Composite fell 0.6 percent at the close. Shanghai’s stock exchange is looking into the earlier spike, according to a technical-services official at the bourse, who asked not to be named, citing the exchange’s rules.
Everbright Securities’ Board Secretary Mei Jian declined to comment further when contacted by Bloomberg News.
Hong Kong’s Hang Seng Index fell 0.1 percent, with volume 44 percent above its 30-day average.
A report today showed Hong Kong’s economy expanded 3.3 percent in the second quarter from a year earlier, beating the 3.2 percent median estimate of economists surveyed by Bloomberg.
New Zealand’s NZX 50 Index declined 0.4 percent. The market was closed for about an hour due to an earthquake near Wellington. Australia’s S&P/ASX 200 Index (AS51) dropped 0.8 percent. South Korea’s Kospi index slid 0.2 percent. Singapore’s Straits Times Index slipped 0.7 percent and Taiwan’s Taiex Index added 0.5 percent.
Japan’s Topix index and the benchmark Nikkei 225 Stock Average both retreated 0.8 percent. Volume on both gauges was about 26 percent below the 30-day average.
The Topix index surged 33 percent this year, retaining its 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 an economic recovery.
Claims for U.S. unemployment benefits unexpectedly dropped last week to the lowest level in almost six years, data yesterday showed, adding to concern that had 65 percent of economists in a Bloomberg survey Aug. 9-13 predicting a reduction in Fed bond purchases in September.
Futures on the S&P 500 rose 0.2 percent. The gauge fell 1.4 percent yesterday, the most since June, as a sales forecast from Cisco Systems Inc. and a profit outlook from Wal-Mart Stores Inc. disappointed investors while improving economic data pushed bond yields higher.
About 49 percent of MSCI Asia Pacific Index members that have reported earnings this season posted profits that beat analyst estimates, data compiled by Bloomberg show. The gauge traded yesterday at 13.1 times estimated earnings compared with 15.1 for the S&P 500 and 13.9 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
ANZ sank 3 percent to A$29.45. Group net interest margin excluding the bank’s global markets business, a key measure of lending profitability, dropped 3 basis points as at June 30 from three-months earlier and the lender expects it to decline by “several more basis points” by the end of the financial year.
J. Front Retailing Co. fell 2.7 percent to 724 yen in Tokyo after reporting a decline in department-store sales.
Hyundai Merchant soared 6.9 percent to 24,650 won in Seoul. North Korea yesterday reached an agreement with South Korea to reopen the jointly-operated Gaeseong industrial complex that was closed in April as ties deteriorated over the North’s nuclear program.
Magic Holdings International Ltd., a Chinese maker of cosmetic facial masks, surged 19 percent to HK$6.01. L’Oreal SA, the world’s largest cosmetics maker, will pay HK$6.30 per share for Hong Kong-based Magic, the companies said in a joint filing yesterday, a premium of about 25 percent over yesterday’s close.
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