Most Asian Stocks Drop After Chinese Factory Output Data

Most Asian stocks declined, with the regional benchmark index retreating from its biggest rally in three weeks, as data showed China’s industrial production increased less than estimated last month.

China Coal (1898) Energy Co. fell 2.4 percent in Hong Kong after Macquarie Group Ltd. cut its investment rating. QBE Insurance Group Ltd. (QBE) slumped 9.8 percent, falling a second day after Australia’s largest insurer by market value forecast an unexpected loss yesterday. Shimizu Corp. (1803) gained 1.9 percent in Tokyo after Credit Suisse Group AG analysts advised buying shares of the building contractor.

The MSCI Asia Pacific Index slid 0.1 percent to 140.47 as of 4:58 p.m. in Hong Kong, with about five shares falling for every four that rose. The gauge jumped 0.8 percent yesterday, the biggest advance since Nov. 18. More than $8 trillion has been added to the value of global equities this year, the most since 2009, as central banks took steps to shore up economies worldwide.

“Investors are reluctant to chase the market at these levels,” Andrew Sullivan, a director of sales trading at Kim Eng Securities in Hong Kong, said by phone. “China’s industrial production and retail sales are very important data that could help people position for trading in 2014.”

Chinese factory output increased 10 percent in November from a year earlier, according to data released by the National Bureau of Statistics today. That compares with analysts’ median projection of 10.1 percent in a Bloomberg News survey. Retail sales in the world’s second-largest economy climbed 13.7 percent last month, a separate report showed.

Regional Gauges

Hong Kong’s Hang Seng Index (HSI) declined 0.3 percent and China’s Shanghai Composite fell less than 0.1 percent. South Korea’s Kospi index lost 0.4 percent. Taiwan’s Taiex index and Australia’s S&P/ASX 200 Index were little changed. New Zealand’s NZX 50 Index declined 0.3 percent.

The Hang Seng China Enterprises Index (HSCEI) of mainland firms listed in Hong Kong slid 0.4 percent. The measure climbed 29 percent from this year’s low on June 25 through yesterday, extending gains after China unveiled reform plans. Thai markets are closed for a holiday with the prime minister ordering new elections amid political unrest.

Singapore’s Straits Times Index dropped 0.9 percent, heading for its lowest close since Sept. 6. India’s S&P BSE Sensex index slipped 0.4 percent. Japan’s Topix index added 0.1 percent.

Futures on the Standard & Poor’s 500 Index advanced 0.1 percent today. The gauge yesterday climbed 0.2 percent to a record as investors weighed the timing of any cuts to Federal Reserve monetary support amid budget negotiations in Washington.

Relative Value

The MSCI Asia Pacific Index gained 8.7 percent this year through yesterday to trade at 13.9 times estimated earnings compared with multiples of 16.3 for the S&P 500 and 14.9 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg. The Asia-Pacific benchmark fell 1.8 percent last week.

“Don’t let the bumps in the road force you out of your equities positions,” Michael Shaoul, chief executive officer of Marketfield Asset Management LLC, which oversees about $17 billion, told Bloomberg TV. “Between now and the end of the bull market, there’s a lot of upside. You need to avoid the temptation to be panicked if we have a difficult period. This is a time when you want to remain patient with equities.”

Pacific Investment Management Co. said global economic growth will accelerate next year. Mohamed El-Erian, chief executive officer at Pimco, whose firm has $1.97 trillion in assets under management, said the world economy is likely to expand by between 2.5 percent and 3 percent in 2014, up from 2.3 percent this year.

FOMC Meeting

Federal Reserve Bank of St. Louis President James Bullard, a voter on policy this year, said the odds of tapering bond purchases have risen along with gains in the labor market, and any reduction should be modest to account for low inflation.

The Federal Open Market Committee will probably begin cutting stimulus at its Dec. 17-18 meeting, according to 34 percent of economists surveyed Dec. 6 by Bloomberg, an increase from 17 percent in a Nov. 8 survey.

Bank of Japan Governor Haruhiko Kuroda helped drive a 46 percent surge in Japan’s Topix this year with unprecedented monetary easing as he and Prime Minister Shinzo Abe sought to jolt the nation out of 15 years of deflation. The Topix is the best performing of 24 developed-market indexes tracked by Bloomberg.

Shimizu added 1.9 percent to 476 yen in Tokyo after Credit Suisse upgraded its recommendation to outperform.

China Coal dropped 2.4 percent to HK$4.92 in Hong Kong after Macquarie reduced its investment rating to neutral from outperform. Yanzhou Coal Mining Co., which the brokerage rates as underperform, slid 1.4 percent to HK$7.78.

QBE Slumps

QBE declined 9.8 percent to A$10.82 in Sydney, extending yesterday’s 22 percent slump. Confidence in QBE management is “shaken,” Sydney-based CIMB Group Holdings analyst Richard Coles wrote in a report, cutting his earnings-per-share estimate 24 percent for 2014.

NTPC Ltd., India’s biggest electricity generator, tumbled 11 percent to 136.65 rupees, the most in almost six years and the biggest decline on the regional gauge, after the country’s electricity regulator proposed changes to production incentives that may hurt the utility’s earnings.

Doosan Infracore lost 3.4 percent to 11,400 won in Seoul. The share price is retreating ahead of issuing global depositary receipts, Choi Won Kyung, Seoul-based analyst at Kiwoom Securities, said by phone today. The company is due to sell 40 million shares that will be listed in Singapore.

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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