Asia Stocks Fall on U.S. Stimulus Bets After GDP Quickens

Asian stocks fell, with the regional benchmark index completing its longest streak of weekly losses in five months, after faster U.S. economic growth fueled concern the Federal Reserve may reduce stimulus sooner than expected.

Sony Corp., a TV maker that gets 68 percent of sales outside Japan, lost 2.7 percent after the yen’s surge against the dollar yesterday weighed on Japanese exporters. Fortescue Metals Group Ltd. (FMG) sank 4.2 percent after Teck Resources Ltd. sold a stake worth about A$500 million ($473 million) in Australia’s third-biggest iron-ore exporter. Samsung Electronics Co. preferred shares declined 5 percent in Seoul after Citigroup Inc. managed the sale of a $350 million stake in the electronics manufacturer.

The MSCI Asia Pacific Index dropped 0.4 percent to 139.72 as of 8:44 p.m. in Tokyo, extending this week’s retreat to 1.1 percent and capping a three-week loss. About three shares declined for every one that rose. The gauge has gained 8 percent so far this year amid unprecedented stimulus from the Bank of Japan and optimism the Fed will continue its bond buying into 2014.

“The stronger GDP data has led some to believe that the Fed will start tapering a bit earlier than they otherwise thought,” Keith Poore, head of investment strategy at AMP Capital Investors Ltd. in Wellington, which manages about $130 billion, said by telephone. “Payrolls is going to be a messy number because of the impact of the shutdown. The market has got ahead of earnings, so we shouldn’t be surprised to see a little bit of weakness,” he said, referring to last month’s partial closure of the U.S. government.

U.S. Payrolls

Investors’ focus now shifts to today’s U.S. payrolls report for October after data yesterday showed growth in the world’s biggest economy accelerated to a 2.8 percent annualized rate last quarter, faster than the 2 percent median estimate of economists, and the European Central Bank unexpectedly cut interest rates.

Japan’s Topix index fell 0.7 percent. Australia’s S&P/ASX 200 Index slid 0.4 percent, while New Zealand’s NZX 50 Index added 0.6 percent. South Korea’s Kospi index dropped 1 percent. Futures on the Standard & Poor’s 500 Index rose 0.2 percent.

Hong Kong’s Hang Seng Index slipped 0.6 percent and China’s Shanghai Composite fell 1.1 percent. Singapore’s Straits Times Index declined 0.8 percent. Taiwan’s Taiex Index retreated 0.7 percent.

Economists predict a report today will show U.S. payrolls climbed by 120,000 in October and the unemployment rate increased to 7.3 percent from 7.2 percent in the previous month.

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 and revenue.

Relative Value

The Asia-Pacific gauge climbed the past two months, pushing valuations on the measure to 13.5 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 15.8 for the S&P 500 and 14.9 for the Stoxx Europe 600 Index.

China’s trade surplus expanded more than forecast to $31.1 billion last month from $15.21 billion in September. Exports grew 5.6 percent after contracting last month.

China releases reports on industrial production, inflation and retail sales tomorrow, with factory output growth projected to have slowed to 10 percent in October from a year earlier.

China Reform

A meeting of China’s leaders begins tomorrow in Beijing through Nov. 12 to map out a blueprint for economic reform.

The S&P 500 dropped 1.3 percent yesterday, its biggest loss in two months, after the GDP report. Still, the data showed the biggest gain in inventories since the beginning of 2012, which risks holding back the economy this quarter as companies limit production.

The benchmark of American equities has rallied 23 percent this year, challenging 2009 for the best annual gain in a decade, as corporate earnings beat estimates and the central bank kept interest rates low to spur economic growth.

The yen maintained gains, trading at 98.18 per dollar as of 5:31 p.m. in Tokyo, after the surprise decision by the ECB to cut interest rates. A stronger yen reduces the overseas income of Japanese exporters when repatriated.

Sony lost 2.7 percent to 1,649 yen. Panasonic Corp. (6752), the maker of Viera televisions, declined 2.6 percent to 994 yen. Toyota Motor Corp., Asia’s biggest carmaker, fell 1.1 percent to 6,200 yen. Honda Motor Co. slid 0.8 percent to 3,870 yen.

Fortescue lost 4.2 percent to A$5.46. CIMB Group Holdings Bhd. sold about 91 million Fortescue shares at A$5.50 each on behalf of Teck, according to a person with knowledge of the matter.

Samsung, Dena

Samsung Electronics preferred shares fell 5 percent to 985,000 won in Seoul. Citigroup Inc. managed the sale of about $350 million of preferred shares at 975,000 won each, according to terms of the sale obtained by Bloomberg News.

DeNA Co. (2432) slumped 11 percent to 1,840 yen after the social-media website operator reported a larger than forecast decline in second-quarter profit.

China Cosco Holdings Co. dropped 5 percent to HK$3.58 in Hong Kong, the most in more than four months, after the nation’s largest shipping company said an executive director is under investigation by a regulatory body.

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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