Asia Stocks Slip as China Lending Data Point to Slowdown

Asian stocks slipped to a two-week low as Chinese equities tumbled after a report showed the slowest increase in the nation’s money supply on record, underscoring risks of a deepening slowdown in the world’s second-biggest economy.

Hong Kong’s benchmark Hang Seng Index (HSI) posted its biggest drop in almost a month after central bank data showed aggregate financing in China slid 19 percent in March from a year earlier and money supply grew at the slowest pace on record. Asics Corp. added 3.6 percent in Tokyo after Nomura Holdings Inc. advised buying shares of the sportswear maker. CapitaMalls Asia Ltd. soared a record 21 percent in Singapore after CapitaLand Ltd., Southeast Asia’s biggest developer, offered to buy the rest of its mall unit for about S$3.06 billion ($2.4 billion).

The MSCI Asia Pacific Index fell 0.2 percent to 137.08 as of 8:33 p.m. in Hong Kong, reversing an earlier gain of as much as 0.4 percent that was spurred by a report yesterday showing U.S. retail sales rose in March by the most since September 2012. China reports on first-quarter growth tomorrow.

“Investors are using the money supply data as an excuse to take profit and lock in gains ahead of China’s GDP data,” said Louis Tse, a Hong Kong-based director at VC Brokerage Ltd. The money supply data shows not enough liquidity, and “the lower the GDP, the higher the expectation the government will pour money into the market, but that’s already discounted.”

U.S. Data

Most Asian markets outside China advanced on yesterday’s U.S. retail sales report and after Citigroup Inc. (C) shares surged on reporting an unexpected first-quarter profit increase.

Japan’s Topix index rose 0.3 percent as Asics climbed 3.6 percent to 1,923 yen. Singapore’s Straits Times Index jumped 1 percent, Australia’s S&P/ASX 200 Index gained 0.5 percent and New Zealand’s NZX 50 Index added 0.3 percent. Taiwan’s Taiex index climbed 0.7 percent, while South Korea’s Kospi index slipped 0.2 percent.

India’s S&P BSE Sensex slid 0.6 percent. United Spirits Ltd. surged 12 percent to a record 2,853.95 rupees after Diageo Plc offered to pay 114 billion rupees ($1.9 billion) to gain control of the Bangalore-based firm, seeking to extend its reach in the world’s largest whiskey market.

Hong Kong’s Hang Seng Index sank 1.6 percent and the Hang Seng Enterprises Index of mainland shares traded in the city dropped 2.1 percent. The Shanghai Composite Index retreated 1.4 percent.

FX Reserves

China’s foreign-exchange reserves, the world’s largest, rose to $3.95 trillion at the end of March from $3.82 trillion at the end of December, data from the People’s Bank of China showed today.

The MSCI Asia Pacific index fell to its lowest level since March 28, taking its loss this year to 3 percent as a stronger yen weighs on the earnings outlook for Japanese exporters and concern grows that Chinese growth is waning.

Asia’s largest economy expanded 1.5 percent in the first quarter from the previous three months, according to the median estimate in a Bloomberg News survey of economists ahead of tomorrow’s data, down from 1.8 percent in the fourth quarter. That indicates a sharper deceleration than the median projection for 7.3 percent growth from a year earlier, down from 7.7 percent.

Futures on the Standard & Poor’s 500 Index gained 0.2 percent today after the U.S. equities benchmark gauge climbed 0.8 percent yesterday.

The MSCI Asia Pacific Index traded at 11.9 times estimated earnings yesterday, compared with 15.6 for the S&P 500 and 14.5 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

CapitaMalls surged 21 percent to S$2.19 in Singapore. CapitaLand bid S$2.22 a share for CapitaMalls, a 23 percent premium to the last closing price on April 11.

To contact the reporters on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net; Kana Nishizawa in Hong Kong at knishizawa5@bloomberg.net

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

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