Asia Stocks Drop From Six-Week High on China, Japan Data

Asian stocks fell, with the regional benchmark index retreating from a six-week high, after reports showed an unexpected slump in Chinese exports and slower growth in Japan than economists had projected.

Fortescue Metals Group Ltd., Australia’s No. 3 producer of iron ore, sank 9.4 percent in Sydney after futures for the metal used to make steel slid into a bear market. Malaysian Airline System Bhd. slumped to a record low after one of its planes bound for Beijing vanished March 8 with 239 people aboard. Ranbaxy Laboratories Ltd. dropped 1.6 percent in Mumbai after the Indian pharmaceutical company recalled a generic cholesterol-lowering drug.

The MSCI Asia Pacific Index dropped 1.1 percent to 137.63 as of 6:49 p.m. in Hong Kong, with three shares falling for each that rose. The gauge posted its fourth weekly advance last week, the longest such streak since September. Reports showed Chinese exports slid the most since 2009 last month, while Japan’s gross domestic product expanded less than estimated in the fourth quarter.

“Investors are concerned growth might disappoint following China’s exports and Japan’s GDP data,” said Daphne Roth, the Singapore-based head of Asian equity research at ABN Amro Private Banking, which oversees about $207 billion. “Following the recent rally, we’ve taken some money off the table. We’re still positive on Japan as the government is likely to stimulate the economy after the consumer tax hike next month.”

Japan GDP

Japan’s Topix index fell 0.8 percent. The nation’s economy grew an annualized 0.7 percent from the previous quarter, the Cabinet Office said today in Tokyo, less than a preliminary estimate of 1 percent and a 0.9 percent median forecast in a Bloomberg News survey of 20 economists. The current-account deficit widened to 1.59 trillion yen ($15.4 billion), the largest in data back to 1985, the finance ministry said.

South Korea’s Kospi index sank 1 percent. Australia’s S&P/ASX 200 Index (AS51) dropped 0.9 percent, and New Zealand’s NZX 50 Index slid 0.2 percent from a record high. Taiwan’s Taiex Index lost 0.6 percent. The FTSE Bursa Malaysia KLCI Index slipped 0.6 percent and Singapore’s Straits Times Index decreased 0.3 percent. Hong Kong’s Hang Seng Index fell 1.7 percent, and the Hang Seng China Enterprises Index of mainland companies traded in the city slid 1.8 percent.

China’s Shanghai Composite Index decreased 2.9 percent, its biggest decline since June, as the yuan fell after the central bank cut its reference rate by 0.18 percent, the most since July 2012.

China Exports

The nation’s overseas shipments unexpectedly declined 18.1 percent in February from a year earlier, customs data showed March 8, compared with analysts’ median estimate for a 7.5 percent increase. Distortions from the Lunar New Year holiday make forecasting more difficult. Producer prices fell 2 percent, the most since July, according to a statistics bureau report yesterday, extending the longest decline since 1999.

“China’s weaker-than-expected export number will heighten market sensitivity,” Ric Spooner, chief markets analyst at CMC Markets in Sydney, wrote in an e-mail to clients today. “The situation in Ukraine is also a background factor that’s likely to see some trader caution at the moment. While risk premiums were unwound last week when the immediate threat of Russian military action became less likely, markets are still respectful of the fact that the situation remains very unstable.”

Pro-Russian forces advanced in Ukraine’s Crimean peninsula, ignoring Western calls to halt a military takeover before the region’s separatist referendum. Russian troops detained Ukrainian border guards at a base a day after gunmen fired warning shots at international observers and barred them from Crimea.

Ukraine Crisis

Ukrainian Prime Minister Arseniy Yatsenyuk plans to travel to Washington on March 12 as Russian President Vladimir Putin defended the actions of Crimea’s local government, which may use the March 16 vote to leave Ukraine and join the country’s Soviet-era master.

The MSCI Asia Pacific Index increased 5.7 percent since this year’s low on Feb. 4. The gauge traded at 13 times the estimated earnings of its constituent companies, compared with 16 for the Standard & Poor’s 500 Index and 14.5 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Futures on the S&P 500 slipped less than 0.1 percent today. The U.S. benchmark index added 0.1 percent on March 7, extending a record high, after data showed stronger-than-forecast jobs growth, offsetting concern the situation in Ukraine could worsen.

Jobs Data

The jobs report released on March 7 showed a 175,000 gain in payrolls last month, which followed a revised 129,000 increase in January. The median forecast of economists in a Bloomberg survey called for a 149,000 advance in February. The jobless rate unexpectedly climbed from a five-year low, rising to 6.7 percent from 6.6 percent.

Raw-material producers posted the biggest decline among the 10 industry groups on the MSCI Asia Pacific Index as iron ore last week slid to the lowest since June to enter a bear market and copper futures sank to an eight-month low.

Fortescue slumped 9.4 percent to A$4.92 in Sydney. BHP Billiton Ltd. (BHP), the world’s biggest mining company, slipped 4.1 percent to A$36.16. Jiangxi Copper Co., China’s largest producer of the metal, declined 3.3 percent to HK$12.44 in Hong Kong.

Malaysian Air dropped 4 percent to 24 sen, for its lowest close as per data available to Bloomberg, as the missing plane that may have crashed in the Gulf of Thailand made it harder for the loss-making airline to revive profits. China Southern Airlines Co., which sold seven tickets for the Beijing-bound flight, slipped 3.9 percent to HK$2.50 in Hong Kong.

Ranbaxy Drops

Ranbaxy fell 1.6 percent to 364.60 rupees in Mumbai. The company withdrew pills in 64,626 bottles of atorvastatin calcium from the U.S. market following a complaint by a pharmacist, the U.S. Food and Drug Administration said on its website. It’s the second recall of the company’s generic cholesterol-lowering medicine in 15 months. Parent company Daiichi Sankyo Co. slid 1.6 percent to 1,746 yen in Tokyo.

China Resources Cement Holdings Ltd. plunged 5.3 percent to HK$5.37 in Hong Kong after reporting full-year profit that missed analyst estimates. Anhui Conch Cement Co., the mainland’s biggest producer of the material by market value, dropped 4 percent to HK$27.75.

Among shares that rose, Leighton Holdings Ltd. climbed 11 percent to A$23.09 in Sydney. Hochtief AG, Germany’s largest builder, offered A$1.16 billion ($1.05 billion) to increase its stake in Australia’s largest construction company.

To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net

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

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