Asian Stocks Drop Ahead of Fed Meeting; ANZ Bank Gains

Photographer: Kiyoshi Ota/Bloomberg

A man is seen through the window of a passing vehicle as he looks at an electronic stock board displaying the closing figure of the Nikkei 225 Stock Average and its movements over the past 12 months in Tokyo, Japan. Close

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Photographer: Kiyoshi Ota/Bloomberg

A man is seen through the window of a passing vehicle as he looks at an electronic stock board displaying the closing figure of the Nikkei 225 Stock Average and its movements over the past 12 months in Tokyo, Japan.

Asian stocks fell, with the regional benchmark gauge paring its first back-to-back monthly gain since April, as investors awaited a Federal Reserve policy meeting.

Komatsu Ltd. tumbled 8.1 percent in Tokyo after the world’s second-largest maker of construction equipment cut its full-year profit forecast by 26 percent. Galaxy Entertainment Group Ltd. slumped 3.3 percent in Hong Kong, leading Macau casino operators lower after Credit Suisse Group AG said gaming stocks are at risk of a correction following this year’s rally. Australia & New Zealand Banking Group Ltd. (ANZ) climbed 1.2 percent to a record in Sydney after posting its highest profit and raising its dividend more than forecast.

The MSCI Asia Pacific Index slid 0.3 percent to 142.2 as of 7:25 p.m. in Hong Kong. Investors are waiting for clues on the outlook for Fed monetary stimulus when a two-day meeting concludes tomorrow, after U.S. payrolls rose less than predicted last month and the 16-day government shutdown took at least $24 billion out of the world’s largest economy.

“We’ve seen very strong gains across Asia and the market is pondering what the Fed is going to say,” Tai Hui, Hong Kong-based chief Asia market strategist at JPMorgan Asset Management, which oversees about $2.2 trillion globally, told Bloomberg TV. “The market is positioning for some new messages from the Fed, especially their assessment after the government shutdown.”

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The Australia & New Zealand Banking Group Ltd. (ANZ) logo is displayed on the exterior of the bank's headquarters in Melbourne, Australia. Close

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Photographer: Carla Gottgens/Bloomberg

The Australia & New Zealand Banking Group Ltd. (ANZ) logo is displayed on the exterior of the bank's headquarters in Melbourne, Australia.

Cash Injection

China’s Shanghai Composite Index dropped 0.2 percent after the central bank’s first cash injection in two weeks failed to reduce money-market rates. Borrowing costs in the world’s second-biggest economy surged through Oct. 25 as the central bank refrained from injecting funds into the banking system.

“Liquidity flows are still going to be very accommodative from a central-bank perspective,” Stephen Davies, Singapore-based chief executive officer at Javelin Wealth Management Pte Ltd., told Bloomberg TV. “If that’s the case in the U.S., then it’s doubly so for the European Central Bank, the Bank of Japan and various central banks out here in Asia.”

Japan’s Topix index slid 0.4 percent. Australia’s S&P/ASX 200 Index dropped 0.5 percent and New Zealand’s NZX 50 Index fell 0.2 percent. South Korea’s Kospi, Taiwan’s Taiex index and Hong Kong’s Hang Seng Index climbed 0.2 percent. Futures on the Standard & Poor’s 500 Index were little changed.

Asian Earnings

The MSCI Asia Pacific Index has gained 2.6 percent in October, on course for a second monthly increase. That pushed its price-earnings multiple to 13.7 times estimated earnings from 12.7 at the end of August, according to data compiled by Bloomberg. That compares with 15.9 for the Standard & Poor’s 500 Index and 14.8 for the Stoxx Europe 600 Index.

Of the 158 companies in the MSCI Asia Pacific Index that have provided quarterly results this earnings season and for which Bloomberg compiles estimates, 53 percent posted profit that missed expectations, the data show.

More than 1,100 companies on the Topix are reporting results through Nov. 7, the peak for earnings season, according to data compiled by Bloomberg. Earnings per share for companies on the measure are expected to increase 56 percent from the previous quarter, according to analyst estimates.

Japanese shares are the best performers this year among developed markets amid optimism Prime Minister Shinzo Abe’s policies and unprecedented monetary easing from the Bank of Japan will lead the country out of deflation.

Indian Rates

India’s S&P BSE Sensex Index reversed losses after the Reserve Bank of India raised its benchmark interest rate for the second straight month to fight the fastest inflation rate in Asia. The gauge climbed 1.7 percent.

The Fed is likely to delay reducing its $85 billion in monthly bond purchases until March, according to a Bloomberg News survey of economists conducted Oct. 17-18.

Komatsu lost 8.1 percent to 2,168 yen in Tokyo. The firm, which sells large dump trucks and excavators to customers such as Rio Tinto Group and BHP Billiton Ltd., said yesterday that demand for mining equipment may fall by half in the 12 months ending March 31.

NSK Ltd. sank 5.1 percent to 1,028 yen, paring its surge this year to 69 percent, even after the Japanese maker of ball bearings reported net income that beat estimates.

Galaxy Entertainment, the best performer on the Hang Seng Index this year, fell 3.3 percent to HK$56.20. Sands China Ltd., the Macau casino operator controlled by billionaire Sheldon Adelson, slipped 3.2 percent to HK$53.85.

Chinese lenders and developers advanced. ICBC, as the nation’s biggest bank is known, jumped 2.7 percent to HK$5.34. China Construction Bank Corp. gained 2.1 percent to HK$5.89. China Overseas Land & Investment Ltd., the largest mainland real estate company traded in Hong Kong, added 1.1 percent to HK$23.65. Shimao Property Holdings Ltd., controlled by billionaire Hui Wing Mau, jumped 5.1 percent to HK$18.70.

ANZ, Australia’s third-largest bank by market value, rose 1.2 percent to A$33.63 after posting a 13 percent increase in second-half cash profit on higher lending and lower operating expenses. The bank boosted its final dividend to 91 Australian cents a share from 79 cents a year earlier. The median estimate of eight analysts surveyed by Bloomberg was for a dividend of 86 cents.

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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