Asian Stocks Outside Japan Drop, Led by Emerging Markets

Asian stocks outside Japan fell for a third day as a retreat in emerging markets dragged the regional equities gauge to its lowest level in a week. Japan’s Topix index gained amid low trading volume.

Tokyo Electric Power Co. dropped 3.6 percent after saying two workers were exposed to dangerous radiation at its crippled Fukushima Dai-Ichi nuclear reactor. BlueScope Steel Ltd. (BSL) sank 14 percent as sales missed analyst estimates and Australia’s No. 1 steel producer forecast a weaker first half of the financial year. JX Holdings Inc. (5020) gained 4 percent after Mitsubishi UFJ Morgan Stanley Securities Co. advised buying the Japanese refiner’s shares.

The MSCI Asia Pacific excluding Japan Index fell 0.9 percent to 442.97 as of 7:25 p.m. in Tokyo, with all 10 industry groups on the gauge dropping. The measure has lagged an increase in U.S. stocks this year as growth slows in China and speculation that the Federal Reserve will curb bond buying spurred investors to sell risk assets across Asia and emerging markets. The Federal Open Market Committe’s July meeting minutes are scheduled to be released on Aug. 21.

“The market’s going to be watching the FOMC minutes this week to see if there’s any more indication in regards to potential of tapering in September, which is what we’re currently predicting,” Martin Lakos, a Sydney-based director at Macquarie Private Wealth, told Bloomberg TV. “There are still some concerns that a big move in QE will be disruptive.”

The MSCI Asia Pacific excluding Japan Index has dropped 5 percent this year, lagging a 16 percent surge in the Standard & Poor’s 500 Index.

Relative Value

The MSCI Asia Pacific Index, the benchmark regional gauge that includes Japan, slid 0.4 percent today. It traded at 13 times estimated earnings through Aug. 16, compared with 15 for the Standard & Poor’s 500 index and 13.9 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Japan’s Topix index rose 0.6 percent, reversing a decline of 0.4 percent, with trading volume 43 percent below its 30-day average. Japanese exports increased 12.2 percent in July from a year earlier, data showed today, less than the 12.8 percent estimated by economists. Imports jumped 19.6 percent.

The Topix gained 34 percent this year, 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. Daily trading volume on the gauge fell to the lowest this year on Aug. 12 and remained near that level throughout last week as investors took summer vacations.

Regional Gauges

Australia’s S&P/ASX 200 Index was little changed. New Zealand’s NZX 50 Index fell 0.2 percent and South Korea’s Kospi index lost 0.1 percent. Singapore’s Straits Times Index slipped 0.8 percent and Taiwan’s Taiex Index slid 0.3 percent. Thailand’s SET Index slid 3.3 percent and Indonesia’s Jakarta Stock Exchange Composite Index plunged 5.6 percent. India’s S&P BSE Sensex Index retreated 1.6 percent.

Hong Kong’s Hang Seng Index fell 0.2 percent as property developers retreated. China’s Shanghai Composite gained 0.8 percent.

Chinese stocks were roiled Aug. 16 by a trading error at Everbright Securities Co. that spurred a 53 percent surge in volume and a swing of more than 6 percent in the Shanghai Composite Index. Erroneous buy orders from Everbright’s proprietary trading group sparked the early rally, the securities regulator said.

China Property

China’s new home prices rose in July for a third month in all but one city, led by gains in the biggest metropolitan centers on anticipation the government will focus on a longer-term housing plan rather than immediate curbs.

Country Garden Holdings Co. dropped 2.6 percent to HK$4.91 in Hong Kong, pacing losses among Chinese developers.

“If prices rise too quickly, it does encourage the mainland authorities to come back with some policy measures to try to cool the market,” Andrew Lawrence, a Hong Kong-based analyst at CIMB Group Holdings Bhd., told Bloomberg TV. “This rise in prices will concern investors with regards to policy responses.”

Huaneng Power International Co. (902), the unit of the mainland’s largest electricity producer, tumbled 9.4 percent to HK$7.70, leading utilities lower in Hong Kong. Chongqing Times reported China may cut electricity prices as soon as this October, citing unidentified people close to National Development & Reform Commission.

Futures on the S&P 500 were little changed today. The U.S. gauge capped its biggest weekly drop in almost two months on Aug. 16 as investors weighed data showing housing starts climbed in July while a gauge of consumer confidence fell.

Tepco Radiation

Tokyo Electric Power retreated 3.6 percent to 622 yen. Two workers at the Fukushima Dai-Ichi nuclear plant were exposed to radiation today near a quake-resistant building, after the radioactivity alarm of a dust monitor went off, according to an e-mailed statement from the utility.

Bluescope tumbled 14 percent to A$4.70 after forecasting profit this half won’t beat the preceding six months.

JX Holdings advanced 4 percent to 547 yen in Tokyo. Mitsubishi UFJ Morgan Stanley upgraded the shares to outperform from neutral.

To contact the reporter on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net

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

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