Asian stocks fell for a second week as investors weighed the timing of a reduction in the Federal Reserve’s unprecedented stimulus amid improving U.S. data.
BHP Billiton Ltd., the world’s largest mining company, slumped 2.5 percent in Sydney. Nitto Denko Corp., a Japanese chemical products maker, plunged 18 percent after cutting its profit forecast. Haier Electronics Group Co. soared 21 percent in Hong Kong after Alibaba Group Holding Ltd. agreed to invest HK$2.82 billion ($364 million) in the home-appliance maker and its logistics business. Gree Inc. surged 9.9 percent in Tokyo after Goldman Sachs Group Inc. raised its outlook on the operator of a mobile gaming social network.
“After a strong November, markets in Asia were overbought which made them vulnerable to some falls,” said Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd., which manages $131 billion. “The transition from a liquidity or monetary policy driven rally to a fundamentally driven rally will create nervouness and volatility. But I believe bulls will come out on top.”
The MSCI Asia Pacific Index dropped 1.1 percent to 137.94 this week after falling the past three days. The gauge has gained 6.6 percent this year as the Bank of Japan deployed unprecedented stimulus and China’s economy showed signs of stabilization. The index traded at 13.6 times estimated earnings as of yesterday, compared with multiples of 16 for the Standard & Poor’s 500 Index (SPX) and 14.6 for the Stoxx Europe 600 Index yesterday, according to data compiled by Bloomberg.
Australia’s S&P/ASX 200 Index fell 1.7 percent, while New Zealand’s NZX 50 Index climbed 0.1 percent. Japan’s Topix index gained 0.3 percent. South Korea’s Kospi index lost 0.9 percent. Hong Kong’s Hang Seng Index declined 2.1 percent, and China’s Shanghai Composite slid 1.8 percent. Taiwan’s Taiex Index added 0.1 percent. Singapore’s Straits Times Index slid 1.6 percent
The Standard & Poor’s 500 Index declined 1.6 percent to 1,775.32 this week, as improving economic data and a U.S. budget accord spurred speculation the Federal Reserve will cut stimulus next week. Data on Dec. 12 showed retail sales rose more than forecast in November on discounts going into the holiday season. Reports last week showed the jobless rate fell to a five-year low and economic expansion beat estimates in the third quarter.
The U.S. House on Dec. 12 passed the first bipartisan federal budget in four years, which would ease $63 billion in automatic spending cuts and avert another government shutdown. The legislation now heads to the Senate.
The Fed will probably start reducing its $85 billion of monthly bond purchases at its Dec. 17-18 meeting, according to 34 percent of economists surveyed Dec. 6 by Bloomberg, up from 17 percent in a Nov. 8 poll.
BHP Billiton slumped 2.5 percent to A$35.85. Samsung Electronics Co., Asia’s largest technology company and the world’s biggest maker of mobile phones, declined 2.6 percent to 1,390,000 won in Seoul. Toyota Motor Corp. (7203), the world’s biggest carmaker, lost 0.6 percent to 6,180 yen in Tokyo.
Nitto Denko dropped 18 percent to 4,215 yen this week, its biggest weekly decline in five years. The company cut its full-year net income forecast more than 25 percent to 41 billion yen, below the 57 billion yen estimate of analysts compiled by Bloomberg.
Haier Electronics soared 21 percent to HK$22.55 in Hong Kong, the most on the MSCI Asia Pacific Index. Alibaba will pay HK$541 million for a 9.9 percent stake in Qingdao Haier Logistics Co. and HK$965 million for about 2 percent of white-goods maker Haier Electronics, according to a stock-exchange filing.
Alibaba will also subscribe to a HK$1.3 billion bond that can be converted into a 24 percent stake in the logistics unit, Haier Electronics said in its statement. The total investment amount was confirmed by Alibaba spokesman John Spelich in an e-mail.
Gree closed the week 9.9 percent higher at 1,043 yen in Tokyo, down from a 10-month high of 1,165 on Dec. 11. Goldman Sachs raised its outlook on the stock to neutral from sell on Dec. 10, boosting the shares 15 percent that day, the biggest gain since December 2008.
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