Asia Stocks Cap First Weekly Drop in Three on Tech, Yen

Asian shares fell this week, with the regional benchmark halting a two-week gain and Japan’s Topix index capping its worst week since June, as technology shares sank amid a global rout and the yen strengthened.

SoftBank Corp., a mobile carrier and Internet-company investor, tumbled 13 percent. Sony Corp., which gets about 70 percent of its revenue outside of Japan, lost 5.9 percent. Toyota Motor Corp., the world’s largest carmaker, slumped 8.3 percent after announcing one of the biggest recalls in automotive history. Hong Kong Exchanges & Clearing Ltd. surged 12 percent on plans for cross-border share investing between the Hong Kong and Shanghai bourses.

The MSCI Asia Pacific Index slid 1 percent to 137.86 this week, halting two weeks of gains, with six of the 10 industry groups retreating. Japanese equities capped the biggest weekly decline among 24 developed markets tracked by Bloomberg.

“This is a reflection of safe-haven moves away from the high-fliers,” said Amir Anvarzadeh, a manager of Japanese equity sales in Singapore at BGC Partners Inc. Valuations in the technology and telecom sector “are under a lot of scrutiny right now. Given the currency trade, the stronger yen doesn’t bode well for global stock markets.”

New Zealand’s NZX 50 Index slid 0.6 percent this week as Xero Ltd., which sells online accounting software, slumped 17 percent. South Korea’s Kospi index climbed 0.5 percent. Australia’s S&P/ASX 200 Index added 0.1 percent, while Taiwan’s Taiex index gained 0.2 percent, and Singapore’s Straits Times Index slipped 0.5 percent.

Japan Rout

Japan’s Topix index slumped 6.7 percent this week, dropping the most since June and closing the period at a seven-month low, as the yen strengthened 1.6 percent to 101.63 per dollar.

Sony, the maker of Xperia smartphones and tablets, slumped 5.9 percent to 1,876 yen. Canon Inc., the world’s biggest camera maker, lost 2.8 percent to 3,134 yen. Nissan Motor Co., a carmaker that counts North America as its biggest market, declined 4.5 percent to 904 yen.

Toyota (7203) dropped 8.3 percent to 5,314 yen after calling back more than 6 million vehicles, including some of its top sellers such as the Camry, Corolla and RAV4, to fix safety hazards.

The Standard & Poor’s 500 Index (SPX) fell 2.7 percent this week while the Nasdaq Composite Index dropped 2.6 percent after falling the most since 2011 on April 10 amid a technology selloff on concern valuations may be too high.

Tech shares across Asia slumped. SoftBank, which owns a stake in Alibaba Group Holding Ltd., lost 13 percent to 6,900 yen. DeNA Co., which runs the Mobage social media site, declined 13 percent to 1,651 yen. NCSoft Corp. slid 6.6 percent to 206,500 won in Seoul.

Tencent Shares

Tencent Holdings Ltd., Asia’s biggest Internet company, was little changed on the week as investors weighed a sell-off in technology shares against China’s decision to allow cross-border stock trading with Hong Kong.

“Heightened risk aversion has resurfaced,” Matthew Sherwood, Sydney-based head of investment markets research at Perpetual Ltd., which manages about $25 billion, said in an e-mail. “There was no clear catalyst to spark such an aggressive sell-down. The key for investors is determining which stocks are overtly overvalued.”

The MSCI Asia Pacific Telecommunication Services Index slumped 2.1 percent and was valued at 13.93 times estimated earnings, while a regional gauge tracking information technology shares declined 1.1 percent and had a multiple of 12.55. The broader MSCI Asia Pacific Index traded at 12.54 times estimated earnings.

China Rally

Hong Kong’s Hang Seng Index gained 2.2 percent this week and the Hang Seng China Enterprises Index of mainland stocks traded in the city advanced 1.2 percent. The Shanghai Composite Index jumped 3.5 percent.

China’s plans to connect the stock exchanges of Hong Kong and Shanghai boosted optimism the country will lure more investors. Stocks rallied on both venues on April 10 after China said it would allow a combined 23.5 billion yuan ($3.8 billion) of daily cross-border trading.

Hong Kong Exchanges surged 12 percent to HK$146 this week, yesterday capping its biggest one-day jump since December 2008. Guotai Junan International Holdings Ltd. rose 8.4 percent to HK$4.66. Citic Securities Co. jumped 6 percent in Hong Kong and 12 percent in Shanghai.

The gap between the cost of dual-listed Hong Kong and mainland-traded shares narrowed this week by the most since June.

Data on April 10 showed exports from China contracted 6.6 percent in March, short of analysts’ expectations of a 4.8 percent gain, fueling concern the nation may miss its growth goal as it faces its deepest economic slowdown since the global financial crisis.

Support Growth

Premier Li Keqiang said this week that China will roll out more policies to support growth while avoiding stronger stimulus. The government is taking steps including railway spending and tax relief while avoiding monetary measures such as cutting banks’ reserve requirements or the scale of actions used to counter the financial crisis.

Several Fed policy makers said a rise in their median projection for the benchmark interest rate exaggerated the likely speed of tightening, according to minutes of their March 18-19 meeting released this week. Last month after central bank officials predicted that the key rate would rise faster than previously projected, Yellen downplayed the importance of the forecasts, even as she said rates might start to rise “around six months” after the Fed ends its bond-purchase program.

To contact the reporter on this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net

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

Press spacebar to pause and continue. Press esc to stop.

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.