Asian stocks fell this week, with the benchmark measure capping its longest weekly losing streak since June, amid concern the U.S. Federal Reserve may soon decide the economy is strong enough to begin paring stimulus and as investors awaited a meeting of China’s leaders this weekend.
Samsung Electronics Co., which counts America as its biggest sales market, dropped 6 percent for the week in Seoul. Industrial & Commercial Bank of China Ltd. fell 3.7 percent in Hong Kong before China’s leadership plenum begins today. Toyota Motor Corp. (7203), the world’s biggest carmaker, lost 2.1 percent after a profit forecast missed estimates. Japan’s Coca-Cola West Co. posted the MSCI Asia Pacific Index’s fifth-biggest gain of the week after net income surged.
The regional index dropped 1.6 percent to 138.98 since Nov. 1, capping a 3.1 percent three-week drop. U.S. economic growth accelerated to a 2.8 percent annualized rate last quarter, data showed Nov. 7, beating analyst estimates and spurring speculation that the Federal Reserve may pare asset purchases sooner than previously anticipated. China’s leaders meet in Beijing from today to map out reforms as the world’s second-largest economy heads for its slowest growth in more than two decades.
“The pace of tapering is quite important -- if they go hard with cutting back stimulus, the markets will get shaken,” said Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd., which manages $131 billion. “There is a lot of nervousness ahead of the China plenum. Expectations of a real aggressive growth strategy are quite high. It’s positive long-term, but short-term the market may be disappointed from a lack of details.”
Japan, Hong Kong
Hong Kong’s Hang Seng Index fell 2.2 percent and China’s Shanghai Composite slid 2 percent. South Korea’s Kospi Index slumped 2.7 percent while Taiwan’s Taiex Index fell 1.9 percent.
U.S. employers added 204,000 workers in October, the Labor Department reported Nov. 8, compared with a median estimate for a 120,000 gain in a Bloomberg survey of economists. That probably isn’t enough to convince policy makers that it’s time to start tapering the quantitative easing program, said Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut.
‘Not Enough Evidence’
“The strength of today’s payroll numbers at least brings December back on the table,” said Stanley, a former Richmond Fed researcher. “But in the end they’re not going to have enough evidence to pull the trigger.”
The Fed decided at its meeting last week to press on with $85 billion in monthly bond purchases, saying it needs to see more evidence that the economy will continue to improve.
Zhaojin Mining Industry Co. (1818), China’s No. 2 gold producer, tumbled 8.4 percent this week to HK$5.71 in Hong Kong, sinking for a seventh week and closing at the lowest since Aug. 9. The precious metal fell 1.5 percent to a three-week low at $1,288.50 an ounce in New York as investors weighed the Fed’s timetable for paring stimulus.
In China, Communist Party leaders enter a policy-making summit with services and manufacturing surveys showing the economy is strengthening.
A non-manufacturing Purchasing Managers’ Index rose to the highest level this year in October, a government report showed. The increase follows faster-than-estimated growth in two manufacturing indexes last week. Data on Nov. 8 showed that the country’s exports rebounded by more than estimated last month, pushing the trade surplus to the widest this year.
Ahead of the plenum, President Xi Jinping said China should speed up its strategy of using innovation to drive development and realize full-year economic targets, the official Xinhua News Agency reported.
Industrial & Commercial Bank of China slid 3.7 percent to HK$5.22. China Construction Bank Corp. fell 2.5 percent to HK$5.90.
Samsung Electronics sank 6 percent this week to 1,410,000 won in Seoul, the biggest drag on the MSCI Asia Pacific Index. Taiwan Semiconductor Manufacturing Co., the world’s largest contract maker of chips, slipped 3.2 percent to NT$106.00.
More than 150 companies on the MSCI Asia Pacific Index released earnings figures this week, according to data compiled by Bloomberg. Of the firms that have reported profits so far this quarter, about half beat analyst estimates, the data show.
Toyota dropped 2.1 percent this week to 6,200 yen in Tokyo after saying net income will probably rise to 1.67 trillion yen ($17 billion) this fiscal year. While that was 13 percent higher than the carmaker’s previous forecast, it missed the 1.82 trillion yen average estimate of 22 analysts surveyed by Bloomberg.
Woori Finance Holdings Co., South Korea’s largest financial group by assets, sank 2.8 percent to 12,000 won after reporting earnings that missed estimates. Woori’s third-quarter profit dropped 84 percent from a year earlier to 86.4 billion won ($81 million), missing the 315.5 billion-won average estimate of 21 analysts surveyed by Bloomberg.
Coca-Cola West jumped 11 percent to 2,201 yen in Tokyo. The beverage maker reported net income more than tripled to 15.8 billion yen for the nine months through September.
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