Asia Stocks Fall From 4-Month High Amid U.S. Budget Talks

Photographer: Yuriko Nakao/Bloomberg

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Photographer: Yuriko Nakao/Bloomberg

A man walks past an electronic monitor displaying graphs of various market indices outside a securities firm in Tokyo.

Asian stocks fell from a four-month high amid a political showdown in Washington over the U.S. budget and as investors examined speeches from Federal Reserve officials for clues on monetary policy.

Nikon Corp. (7203), a camera maker that gets 85 percent of sales overseas, sank 2.3 percent as a stronger yen cut the earnings prospects for Japanese exporters. Lixil Corp. (5938), a toilet maker said to be in advanced talks to buy German bathroom-fixtures company Grohe Group for more than 3 billion euros ($4 billion), lost 6.3 percent in Tokyo. Jiangxi Copper Co., China’s biggest producer of the metal, slipped 1.7 percent in Hong Kong as copper futures fell.

The MSCI Asia Pacific Index fell 0.6 percent to 140.37 as of 6:15 p.m. in Hong Kong, with all 10 industry groups on the gauge declining. The measure has climbed 7.8 percent in September, on course for the best month since January 2012, after the Fed maintained the pace of its stimulus and data showed China’s economic growth is stabilizing. The yen traded at 98.76 per dollar, strengthening from the Sept. 20 close of equity markets in Tokyo last week.

“The increasingly ugly debate on the U.S. fiscal position is certainly a primary concern for markets,” Angus Gluskie, chief investment officer who helps oversee about $500 million at White Funds Management in Sydney, said by telephone. “Markets are comforted by the realization that the Fed is not going to rush at it. They are much more likely to go slowly at the tapering.”

Government Shutdown

House Speaker John Boehner and his Republican caucus are pushing the federal government closer to a shutdown in a fight over funding and the debt limit, Democrats Max Baucus and Patty Murray said in a letter to colleagues yesterday. Investors are considering these political disagreements one week after the Fed unexpectedly maintained $85 billion a month in bond purchases.

Hong Kong’s Hang Seng Index retreated 0.8 percent. The Hang Seng China Enterprises Index (HSCEI) of mainland shares traded in the city fell 1.1 percent. The measure entered a bull market this month after rebounding more than 20 percent from a June low, while the Hang Seng Index erased its 2013 loss. China’s Shanghai Composite Index today slid 0.6 percent

Japan’s Topix (TPX) index lost 0.3 percent. Australia’s S&P/ASX 200 Index declined 0.4 percent, and South Korea’s Kospi index fell 0.1 percent. Singapore’s Straits Times Index slipped 0.1 percent while New Zealand’s NZX 50 Index rose 0.2 percent. Taiwan’s Taiex Index added 0.1 percent. Futures on the Standard & Poor’s 500 Index were little changed.

Fed Chiefs

Regional Fed bank presidents spoke yesterday. Fed Bank of New York President William C. Dudley said policy makers must “forcefully” push against economic headwinds as the U.S. has yet to show “any meaningful pickup” in momentum. Fed Bank of Atlanta President Dennis Lockhart said monetary policy should focus on creating a more dynamic economy. Meanwhile, Fed Bank of Dallas President Richard Fisher said the central bank harmed its credibility with the last week’s decision not to reduce bond buying.

The MSCI Asia Pacific Index trades at 13.7 times estimated earnings, compared with 15.4 for the S&P 500 and 14.3 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Japan’s Topix climbed 41 percent this year, the most among 24 developed markets tracked by Bloomberg, amid optimism Prime Minister Shinzo Abe and the Bank of Japan can lead the country out of deflation through unprecedented monetary easing.

Exporters Slip

Japanese exporters sank as the yen strengthened against the dollar. Nikon lost 2.3 percent to 1,768 yen. Canon Inc., the world’s largest camera maker, declined 2 percent to 3,155 yen. Honda Motor Co. (7267), which gets 83 percent of sales overseas, slipped 1 percent to 3,840 yen.

Lixil sank 6.3 percent to 2,043 yen. Lixil and Grohe may announce an agreement as early as this week, said people with knowledge of the matter, asking not to be identified because the negotiations are private. An initial public offering remains an option because no final deal has been reached, they said.

Raw-material producers and energy companies declined as copper and oil futures fell. Jiangxi Copper dropped 1.7 percent to HK$16. Inpex Corp., Japan’s top energy explorer, fell 1.4 percent to 459,000 yen. Rio Tinto Group (RIO), the world’s second-largest miner, lost 0.8 percent to A$62.10 in Sydney.

Apple Inc. (AAPL) suppliers and part makers climbed after the U.S. company sold a record nine million iPhones during the weekend debut of two new models.

Murata Manufacturing Co., an electronic-components manufacturer that counts Apple as its biggest customer, gained 1.5 percent to 7,410 yen in Tokyo. Largan Precision Co., which makes lenses for the cameras in Apple’s phones, advanced 1.5 percent to NT$1,010 in Taipei.

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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