Asian Stocks Fall Third Day on Fed Concern, China PMI

Photographer: Tomohiro Ohsumi/Bloomberg

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Photographer: Tomohiro Ohsumi/Bloomberg

A visitor reads a newspaper in front of a monitor displaying financial data at the Tokyo Stock Exchange in Tokyo.

Asian stocks outside Japan fell for a third day after minutes from the Federal Reserve’s last meeting signaled bond purchases may be reduced in coming months and a gauge of China manufacturing fell more than expected.

Perseus Mining Ltd. (PRU) led gold producers lower, slumping 10 percent in Sydney after prices for metal fell amid concern tapering stimulus will erode demand for haven assets. Prince Frog International Holdings Ltd. (1259), a maker of baby-care products, suspended after its accounting came under scrutiny by a short seller and lost 22 percent in Hong Kong as it resumed trading. Honda Motor Co., a Japanese carmaker that gets more than 80 percent of revenue abroad, rose 3.4 percent as the yen fell.

The MSCI Asia Pacific Index dropped 0.7 percent to 141.17 at 7:38 p.m. in Hong Kong, with nine of the gauge’s 10 industry groups falling. The MSCI Asia Pacific Excluding Japan Index declined 1.3 percent, with Japan’s Topix (TPX) index gaining 1 percent.

“There’s a feeling around that the Fed is starting to see the cost of ongoing quantitative easing mounting,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which oversees $135 billion. “The market is still feeling very twitchy about it.”

Hong Kong’s Hang Seng Index lost 0.5 percent, while the Hang Seng China Enterprises Index of mainland companies listed in Hong Kong slid 0.9 percent. China’s Shanghai Composite Index was little changed. A preliminary gauge of China’s factory activity in November from HSBC Holdings Plc and Markit Economics fell to 50.4 in November from 50.9 in October. Analysts surveyed by Bloomberg had expected a reading of 50.8, with 50 the dividing line between growth and contraction.

Inflation Goal

Japan’s Nikkei 225 Stock Average rose 1.9 percent as the central bank kept monetary policy unchanged today. The Bank of Japan will at some stage alter its target of 2 percent inflation in two years as unprecedented bond-buying proves insufficient to achieve the goal, economists forecast in a Bloomberg News survey.

Japan’s 121 trillion yen ($1.2 trillion) pension fund needs more independence from bureaucrats and should put some of the world’s biggest retirement-savings pool into private equity and commodities, an expert panel said. The Government Pension Investment Fund should review domestic bond holdings and consider investing more overseas, according to a report released by the advisory group yesterday.

South Korea’s Kospi index lost 1.2 percent. Australia’s S&P/ASX 200 Index fell 0.4 percent, while New Zealand’s NZX 50 Index declined 0.5 percent.

Singapore’s Straits Times Index fell 0.4 percent even after the government raised its growth forecast for 2013 after the economy unexpectedly expanded last quarter. Taiwan’s Taiex index retreated 1.3 percent.

U.S. Futures

Futures on the Standard & Poor’s 500 Index climbed 0.2 percent today after the stocks gauge dropped 0.4 percent yesterday. Central bank policy makers “generally expected that the data would prove consistent with the committee’s outlook for ongoing improvement in labor-market conditions and would thus warrant trimming the pace of purchases in coming months,” according to minutes of the Federal Open Market Committee’s Oct. 29-30 gathering released yesterday.

Perseus (AS51) plunged 10 percent to 30 Australian cents as gold traded near the lowest level in more than four months. Newcrest Mining Ltd. (NCM), Australia’s biggest gold producer, declined 4 percent to A$8.70. Zijin Mining Group Co., China’s largest producer of the precious metal, dropped 2.2 percent to HK$1.80.

Yen Slides

Japanese exporters rallied as the yen dropped against all of its 16 major counterparts. Honda added 3.4 percent to 4,240 yen. Fanuc Corp. (6954), a maker of factory robotics that gets 78 percent of its sales abroad, rose 1.8 percent to 16,980 yen.

Prince Frog International slumped 22 percent to HK$3.63 as it resumed trading after allegations from Glaucus Research Group dropped the stock by a record last month. The short-seller on Oct. 16 initiated coverage of Prince Frog at a strong sell, saying tax records indicate the company’s net income was less than reported. Prince Frog said the report was without merit and said it will consider buying back shares.

Australand Property Group (ALZ) fell 4 percent to A$3.60 in Sydney, extending yesterday’s loss, after CapitaLand Ltd. said it was selling part of its 59 percent stake in the developer to raise as much as A$433.7 million ($403 million).

The Asia-Pacific gauge traded at 13.9 times estimated earnings as of yesterday, compared with 16.1 for the S&P 500 and 15.1 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

To contact the editor responsible for this story: Sarah McDonald at smcdonald23@bloomberg.net

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