Asia Stocks Post Biggest Decline in Five Weeks on China

Asian stocks fell, with the regional benchmark losing the most in five weeks, as mining companies slid amid concern about China’s economic outlook and Japanese equities sank on a stronger yen.

Honda Motor Co. (7267), a carmaker that gets about 83 percent of sales overseas, dropped 2 percent in Tokyo to pace losses among Japanese exporters. Celltrion Inc. slumped 8.3 percent in Seoul after the drugmaker’s operating profit plunged. Belle International Holdings Ltd., a retailer of women’s shoes that gets almost all its sales from China, sank 9.4 percent after reporting same-store sales declined.

The MSCI Asia Pacific Index lost 1.5 percent to 136.04 at 8:25 p.m. in Hong Kong for its biggest decline since Feb. 4. All industry groups on the gauge fell. Miners dropped as copper futures yesterday slid to the lowest since July 2010 after disappointing China credit and export data fueled speculation the nation may miss its 7.5 percent economic-growth target.

“The concern about China is big,” said Ayako Sera, a Tokyo-based market strategist at Sumitomo Mitsui Trust Holdings Inc., which has the equivalent of $651 billion in assets. “The outlook is unclear at the moment. While continuing to watch how it develops, investors are also preparing for the economy to deteriorate.”

China Credit

Aggregate financing in China decreased to 938.7 billion yuan ($153 billion) last month amid a crackdown on shadow lending, a government report this week showed. That compares with January’s record 2.58 trillion yuan and is less than the 1.31 trillion yuan median estimate of analysts surveyed by Bloomberg News. Chinese exports slid the most since 2009 last month, a separate report over the weekend showed.

“There’s been a little bit of an excess credit there that has created bubbles in real estate,” Carl Tannenbaum, Chicago-based chief economist at Northern Trust Corp., said on Bloomberg Television from Seoul. “China has to be very careful that their efforts to bring things under control don’t create a very large correction that will be disruptive.”

China’s Shanghai Composite Index lost 0.2 percent, while the Hang Seng China Enterprises Index of mainland companies traded in Hong Kong declined 1.6 percent, nearing a bear market. The city’s benchmark Hang Seng Index slipped 1.7 percent.

Baoding Tianwei Baobian Electric Co. declined 5.1 percent to 4.29 yuan in Shanghai as it resumed trading. The company’s bonds and stock were suspended yesterday after the electrical-equipment maker reported losses for a second year running.

Chaori Default

Investor scrutiny of China’s onshore bond market is mounting after Shanghai Chaori Solar Energy Science & Technology Co. last week became the first company to default. Chaori Solar’s failure to pay has stoked speculation more companies may miss debt deadlines.

Japan’s Topix index fell 2.1 percent after the yen yesterday rose the most in a more than a week against the dollar. Australia’s S&P/ASX 200 Index (AS51) lost 0.5 percent, while New Zealand’s NZX 50 Index lost 0.1 percent. South Korea’s Kospi Index decreased 1.6 percent. Taiwan’s Taiex index dropped 0.2 percent, and Singapore’s Straits Times Index declined 1 percent.

Thailand’s SET Index fell 0.6 percent. The nation’s central bank cut its key interest rate for the first time this year to bolster the economy as prolonged political unrest curbed local demand and hurt tourism. Sixteen of 26 economists in a Bloomberg survey predicted the decision, with the remainder expecting the rate to be held.

Relative Value

The MSCI Asia Pacific Index increased 4.5 percent from this year’s low on Feb. 4. The gauge traded at 12.8 times the estimated earnings of its constituent companies yesterday, compared with 15.9 for the Standard & Poor’s 500 Index and 14.3 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Futures on the S&P 500 slid 0.2 percent today. The U.S. equity benchmark index fell 0.5 percent yesterday, extending its retreat from a record high reached on March 7.

Russia stood by deposed Ukrainian President Viktor Yanukovych and called possible U.S. aid to the new government in Kiev illegal, as the standoff with Western governments over Crimea intensified. Ukraine’s interim prime minister Arseniy Yatsenyuk meets U.S. President Barack Obama in Washington today as the House of Representatives passed a resolution seeking sanctions against Russia.

Japanese exporters fell. Honda dropped 2 percent to 3,765 yen. Toyota Motor Corp. (7203), the world’s biggest carmaker, slid 2 percent to 5,728 yen. Sony Corp., the maker of Bravia televisions and PlayStation game consoles, fell 1.4 percent to 1,840 yen.

Celltrion Slumps

Celltrion slumped 8.3 percent to 43,100 won in Seoul after reporting 2013 operating profit plunged 49 percent to 99.8 billion won ($93 million) from the previous year.

Raw-material producers declined after metals in London sank a third day yesterday. Jiangxi Copper slid 2.5 percent to HK$11.84 in Hong Kong, the lowest close since October 2011. Glencore Xstrata Plc, the world’s largest metals trader, fell 1.5 percent to HK$40.50. Inpex Corp. (1605), Japan’s biggest energy explorer, dropped 2 percent to 1,299 yen in Tokyo as crude oil fell.

Belle International sank 9.4 percent to HK$8.41 in Hong Kong, its biggest drop since February 2013. The company reported a 2.7 percent decline in same-store footwear sales in the three months through February.

To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Anna Kitanaka in Tokyo at akitanaka@bloomberg.net

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

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.