Asian Stocks Decline Most in Four Weeks on China Outlook

Asian stocks fell this week, with the regional benchmark gauge sliding the most in four weeks, as data from China added to concern about a slowdown in the world’s second-largest economy.

Industrial & Commercial Bank of China Ltd., the nation’s biggest lender, dropped 2.2 percent in Hong Kong. Great Wall (2333) Motor Co. slumped 10 percent in Hong Kong after a spokesman for the mainland producer of sport-utility vehicles and pickups posted a sales target the company later denied. NHN Entertainment Corp. sank 13 percent in Seoul after brokerages cut their target prices on the provider of online mobile games. Japan Tobacco Inc. dropped 6.6 percent after a report China plans to ban smoking in public.

The MSCI Asia Pacific Index dropped 0.5 percent to 139.63, the biggest weekly decline since the five days ended Dec. 13. Shares slid as data showed China’s services industries grew at a slower pace in December and factory-gate prices extended their longest streak of declines since the Asian financial crisis. Only three of the measure’s 10 industry group climbed this week.

“The market is trying to discount potential slower growth in China,” said Tim Leung, a Hong Kong-based portfolio manager who helps oversee about $1.5 billion at IG Investment Ltd. “Momentum is slowing.”

Asia’s regional equities gauge has lost 1.2 percent in 2014 as Japan and Hong Kong markets led declines among major developed markets. The gauge traded about 13.1 times estimated earnings, near the lowest since September, compared with multiples of 15.6 for the Standard & Poor’s 500 Index and 13.8 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Japan Shares

Japan’s Topix index slid 0.3 percent in the first week of trading for 2014 after surging 51 percent last year, its steepest rally since 1999. The Nikkei 225 Stock Average (NKY) retreated 2.3 percent this week.

Japan Tobacco, which gets almost half its revenue from outside Japan, tumbled 6.6 percent to 3,195 yen after the South China Morning Post reported China is working toward banning smoking in public places, citing Mao Qunan, a spokesman for the health commission.

Hong Kong’s Hang Seng Index (HSI) added 0.1 percent this week. The Hang Seng China Enterprises Index, also known as the H-share index, dropped 2.6 percent.

Great Wall fell 10 percent to HK$38.90. Shares slumped after spokesman Shang Yugui posted on his personal Weibo page that the company will seek to sell 880,000 units this year. That would be a 17 percent increase on 2013, with growth slowing from the 21 percent pace recorded last year. The company said yesterday it hadn’t made a sales target for 2014 and Shang’s statements were his personal opinion.

IPOs Surge

China’s Shanghai Composite Index sank 3.4 percent this week. Shares dropped amid concern new share offerings will divert funds from existing equities after the government ended a ban on initial public offerings.

A gauge of China’s services industries decreased to 50.9 in December from 52.5 the previous month, HSBC Holdings Plc and Markit Economics Ltd. said this week. A separate report showed consumer prices rose 2.5 percent last month from a year earlier, missing the 2.7 percent median estimate of 41 analysts surveyed by Bloomberg News. A measure of producer prices fell 1.4 percent, the 22nd straight drop.

China Trade

Other data showed China’s imports rose 8.3 percent in December from a year earlier, the most in five months, while exports increased 4.3 percent, less than the 5 percent analysts had expected.

ICBC lost 2.2 percent to HK$4.95 this week in Hong Kong, while China Construction Bank Corp. (939), the nation’s second-largest lender,dropped 2.3 percent to HK$5.55.

Australia’s S&P/ASX 200 Index (AS51) slid 0.7 percent this week, while New Zealand’s NZX 50 Index advanced 2 percent. Singapore’s Straits Times Index rose 0.4 percent.

Taiwan’s Taiex index dropped 0.2 percent and South Korea’s Kospi index retreated 0.4 percent.

NHN Entertainment (181710) tumbled 13 percent to 79,700 won this week in Seoul, leading declines on the MSCI Asia Pacific Index, as HSBC Holdings Plc reduced its target price on the shares by 33 percent to 60,000 won. Woori Investment & Securities Co. and Shinyoung Securities Co. also cut their target prices on the stock this week, according to data compiled by Bloomberg.

U.S. Payrolls

After Asian markets closed yesterday, U.S. data showed employment rose in December at the slowest pace in almost three years, in part because bad weather blanketed the U.S., ending months of improving job growth that had signaled the world’s largest economy was picking up.

The 74,000 gain in payrolls was the weakest since January 2011 and smaller than the most-pessimistic projection in a Bloomberg survey of 90 economists, Labor Department figures showed in Washington. The advance followed a 241,000 jump in November. The unemployment rate declined to 6.7 percent, the lowest since October 2008, as more people left the labor force.

Among stocks that rose this week, Nintendo Co., the maker of Wii U game consoles, jumped 15 percent to 16,080 yen in Tokyo after Chinese lawmakers lifted a 13-year ban on gaming consoles and said they will draft rules allowing the machines to be made in the new Shanghai free-trade zone.

To contact the reporter on this story: Kana Nishizawa in Hong Kong at knishizawa5@bloomberg.net

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

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