Asian Stocks Drop After Worst Weekly Loss Since 2012

Asian stocks fell, with the regional gauge extending the biggest weekly loss since 2012, as western nations disputed Crimea’s vote to rejoin Russia.

Aeon Co. (8267) sank 4.3 percent in Tokyo after Japan’s biggest retailer posted profit that trailed estimates. Tencent Holdings Ltd., Asia’s largest Internet company, slid 3.1 percent in Hong Kong after China blocked plans to offer virtual credit cards. SoftBank Corp., a Japanese phone carrier that owns part of Alibaba Group Holding Ltd., jumped 4.9 percent after China’s biggest e-commerce company kicked off the process for what may be the biggest U.S. initial public offering in two years.

The MSCI Asia Pacific Index lost 0.3 percent to 133.94 as of 7:01 p.m. in Hong Kong, extending last week’s 3.5 percent slump. About five shares fell for every three that rose on the gauge. A total of 96.8 percent of voters in the Black Sea region of Crimea supported leaving Ukraine to join Russia, Mikhail Malyshev, the head of the election commission, told reporters. The European Union, the U.S. and the Ukrainian government consider the vote illegal.

“If there are signs war is extending, it might impact Europe negatively,” Binay Chandgothia, a Hong Kong-based portfolio manager who helps oversee $250 billion at Principal Global Investors, said on Bloomberg Television. “At this stage it’s OK. It depends upon how severely Germany and the partners in the European Union view this referendum.”

Japan’s Topix index slid 0.8 percent. Australia’s S&P/ASX 200 Index fell 0.2 percent. Hong Kong’s Hang Seng Index slipped 0.3 percent, while the Hang Seng China Enterprises Index (HSCEI) of mainland companies added 0.4 percent.

The Shanghai Composite Index climbed 1 percent. South Korea’s Kospi index rose 0.4 percent and Taiwan’s Taiex index added 0.1 percent. New Zealand’s NZX 50 Index gained 0.2 percent.

China Outlook

A gauge of expected price swings in China’s yuan climbed to an 18-month high and the offshore exchange rate weakened as the central bank doubled the currency’s trading limits versus the dollar. Economists at UBS AG, Bank of America Corp., JPMorgan Chase & Co. and Nomura Holdings Inc. have cut forecasts for Chinese growth after disappointing data fueled speculation the nation may not meet its 7.5 percent economic-expansion target for 2014.

“Investors are pretty nervous about the China story at the moment,” Adrian Mowat, Hong Kong-based chief Asia and emerging-market strategist at JPMorgan Chase & Co., said in an interview on Bloomberg Television. “You throw in what’s going on in Crimea, and I imagine it’s going to be a pretty difficult week for the markets.”

The MSCI Asia Pacific Index slipped 5.2 percent this year, dragging the value of the shares on the gauge to 12.6 times estimated earnings. That compares with a multiple of 15.7 for the Standard & Poor’s 500 Index and 14.1 for the Stoxx Europe 600 Index.

U.S. Futures

Futures on the S&P 500 added 0.5 percent today. The U.S. benchmark index dropped 0.3 percent on March 14 amid concerns over the Crimea standoff.

Western countries have threatened to ratchet up sanctions against Russia if it doesn’t back down on annexing Crimea. Russia has deployed about 60,000 troops along the Ukrainian border, the government in Kiev said. The majority of Crimea’s residents are ethnic Russians and President Vladimir Putin says they are at risk after last month’s ouster of Ukraine’s president Viktor Yanukovych, who was backed by the Kremlin.

Aeon dropped 4.3 percent to 1,122 yen. Profit for the year ended Feb. 28 was 40 billion yen, according to the supermarket operator, missing the company’s own forecast of 75 billion yen and the 69 billion yen average estimate by 12 analysts tracked by Bloomberg.

Flight Probe

Malaysian Airline System Bhd. fell 4.2 percent to 23 sen in Kuala Lumpur as investigators stepped up scrutiny of the crew of the carrier’s missing passenger jet. Police on March 15 searched the house of pilot Zaharie Ahmad Shah and first officer Fariq Abdul Hamid after Prime Minister Najib Razak said Flight 370 was intentionally diverted en-route to Beijing on March 8.

Tencent declined 3.1 percent to HK$546.50 in Hong Kong. China’s central bank stopped the company and an affiliate of Alibaba from offering virtual credit cards as the government moves to tighten restrictions on online financial products.

New World Development Co. (17), the Hong Kong-based builder controlled by billionaire Cheng Yu-tung, sank 5.6 percent to HK$7.81 amid analyst downgrades. UBS AG cut its rating on the stock to sell from buy, while Credit Suisse Group AG lowered its recommendation to neutral from outperform.

Among shares that advanced, SoftBank climbed 4.9 percent to 8,110 yen in Tokyo. Alibaba, in which SoftBank holds a stake, is working with Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley and Citigroup Inc. for an IPO in the U.S., according to a person familiar with the matter.

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 Richard Frost, Jim Powell

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