Asian stocks fell as investors await economic data from the U.S. and amid concern gains in equities over the past two months have outpaced prospects for earnings.
Toyota Motor Corp. (7203), the world’s biggest carmaker, lost 1.3 percent in Tokyo after its net-income forecast fell short of estimates. Ausdrill (ASL) Ltd. slumped 29 percent in Sydney after the drilling contractor said it expects lower profit in fiscal year 2014. GungHo Online Entertainment Inc. gained 2.5 percent as Japan Exchange Group Inc. and Nikkei Inc. said the Internet-game maker will be included in their new index.
The MSCI Asia Pacific Index dropped 0.5 percent to 140.60 as of 4:44 p.m. in Hong Kong, with all 10 industry groups on the gauge falling. The measure rose 9.3 percent this year through yesterday amid unprecedented stimulus from the Bank of Japan and optimism the Federal Reserve will continue its monthly bond buying into 2014.
“It is hard to see where the global economy can surprise significantly on the upside to provide a further leg up for major indexes,” Matthew Sherwood, head of investment markets research in Sydney at Perpetual Investments, which manages about $25 billion, said in an e-mail. “The markets have bid prices up and are likely to ‘side trend’ for a period, so that earnings can catch up with investor optimism.”
Japan’s Topix index declined 0.6 percent. Australia’s S&P/ASX 200 Index fell 0.2 percent, dragged lower by lenders as Australia & New Zealand Banking Group Ltd. and National Australia Bank Ltd. traded without the right to the current dividend.
New Zealand’s NZX 50 Index lost 0.4 percent. South Korea’s Kospi Index and China’s Shanghai Composite Index both fell 0.5 percent. Hong Kong’s Hang Seng Index (HSI) declined 0.7 percent. Taiwan’s Taiex index was little changed, while Singapore’s Straits Times Index fell 0.2 percent.
U.S. growth and jobs data to be released today may help investors gauge the time line for stimulus cuts after two Federal Reserve officials said the level of slack in the economy justifies continuing accommodative policy.
Of the companies on the MSCI Asia Pacific Index that have reported quarterly results this season and for which Bloomberg compiles estimates, about half exceeded analysts’ projections on profit, while 53 percent posted better-than-expected revenue.
The Asia-Pacific gauge climbed the past two months, pushing valuations on the measure to 13.7 times estimated earnings, up from a multiple of 12.7 at the end of August, according to data compiled by Bloomberg. That compares with a current multiple of 16 on the Standard & Poor’s 500 Index and 15 for the Stoxx Europe 600 Index, the data show.
China’s leaders meet in Beijing from Nov. 9-12 to map out a blueprint for reform. A private survey this week showed services industries expanded after an official non-manufacturing gauge rose to the highest this year.
Futures on the S&P 500 slid 0.1 percent. Yesterday, the Dow Jones Industrial Average rose 0.8 percent to a record and the S&P 500 gained 0.4 percent. Microsoft Corp. climbed 4.2 percent as Nomura Holdings Inc. said the software company may exit its money-losing consumer business under a new chief executive officer.
The U.S. economy probably grew at a 2 percent annualized rate in the third quarter, compared with a 2.5 percent increase in the previous three months, according to a Bloomberg survey before today’s report. Economists predict data will show payrolls climbed by 120,000 in October and the unemployment rate increased to 7.3 percent from 7.2 percent in the previous month, according to a separate survey before data tomorrow. The U.S. will publish data on jobless claims today.
Toyota lost 1.3 percent to 6,270 yen in Tokyo after its net-income forecast fell short of analyst estimates. Daihatsu Motor Co. lost 0.9 percent to 1,808 yen, slumping for a fifth day and taking the carmaker’s decline to 6.8 percent since cutting its full-year profit forecast on Oct. 31.
Fosun International Ltd. (656) slumped 7.6 percent to HK$6.98 in Hong Kong. The company with interests in steel, property and retail plans to sell HK$3.88 billion ($501 million) of convertible bonds with an initial conversion price of HK$10 a share.
Ausdrill tumbled 29 percent to 98 Australian cents. The contractor said after it expects net income to fall to A$35 million to A$45 million ($33.2 million to $42.7 million) in the year ending June 2014, compared with A$91.31 million in the previous fiscal year. JPMorgan Chase & Co. cut the stock’s rating to neutral from overweight.
GungHo gained 2.5 percent to 57,900 yen on optimism its share price will rise after being included on the new stock gauge. Japan Exchange, the main bourse operator in the world’s second-biggest equity market, and Nikkei will create an index that selects members based on return on equity in a bid to highlight the nation’s best stocks. The measure, set to start on Jan. 6, will comprise 400 shares.
Lenovo Group Ltd., the world’s largest maker of personal computers, gained 2.1 percent to HK$8.60 in Hong Kong after posting profit that beat analyst estimates.
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