Asian Stocks Fall From Six-Year High Before U.S. Payrolls

The benchmark index of Asian stocks fell from a six-year high as private data showed U.S. companies added more workers than estimated before a government payrolls report today.

Li & Fung Ltd., a supplier of toys and clothes, plunged 10 percent in Hong Kong after the shares traded without rights to its spinoff. Dai-ichi Life Insurance Co. fell 2.3 percent on a report the Japanese insurer will approve a share sale. Anhui Conch Cement Co., China’s largest producer of the building material, rose 5.6 percent in Hong Kong after saying it expects first-half profit will surge.

The MSCI Asia Pacific Index (MXAP) lost 0.1 percent to 147.24 as of 4:13 p.m. in Hong Kong after gaining 0.1 percent. Eight of its 10 industry groups fell. The gauge rose the past three days to its highest close since June 6, 2008. Its relative strength index, a measure of trading momentum, advanced to 74 yesterday, above the 70 threshold some traders say portends a selloff.

“Investors are in a wait-and-see mode before the big event today and the market is bound to take a pause from a technical standpoint,” said Toshiyuki Kanayama, Tokyo-based senior market analyst at Monex Inc. “The market is expecting the jobs data will top 200,000, but you never know until it comes out. It could miss estimates.”

Regional Gauges

Japan’s Topix (TPX) index and South Korea’s Kospi index both fell 0.2 percent. Australia’s S&P/ASX 200 Index gained 0.7 percent, while New Zealand’s NZX 50 Index added 0.4 percent. Taiwan’s Taiex index gained 0.4 percent and Singapore’s Straits Times Index rose 0.5 percent.

Hong Kong’s Hang Seng Index fell 0.1 percent. The Hang Seng China Enterprises Index of mainland stocks traded in the city advanced 0.1 percent. The Shanghai Composite Index rose 0.2 percent. India’s S&P BSE Sensex Index added less than 0.1 percent.

An index of China’s services industry from HSBC Holdings Plc and Markit Ltd. rose to 53.1 in June from 50.7 in May, the highest reading since March 2013, a report showed today. Figures above 50 indicate expansion. Separate data showed the official non-manufacturing gauge slid to 55 in June from 55.5 the month before.

Futures on the Standard & Poor’s 500 Index were little changed today. The measure added 0.1 percent yesterday to close at a record.

U.S. companies added 281,000 workers in June, figures from the ADP Research Institute showed yesterday. The median projection of economists surveyed by Bloomberg called for an advance of 205,000. The private report precedes a Labor Department report today that may show nonfarm payrolls rose by 215,000 in June, according to the median of economists’ estimates. A separate release yesterday showed that U.S. factory orders fell 0.5 percent in May.

‘Good Rebound’

Data from employment to housing is fueling confidence that the world’s largest economy is rebounding after contracting in the first quarter by the most since 2009.

“The first quarter was weaker than most people expected, but we’ve seen a good rebound subsequently,” said Tim Schroeders, a portfolio manager who helps oversee $1 billion in equities at Pengana Capital Ltd. in Melbourne. “There’s growth in jobs data and the U.S. economy is accelerating, which has positive implications for the market.”

Federal Reserve Chair Janet Yellen said yesterday there is no need to change current U.S. monetary policy to address concerns over financial stability.

Li & Fung

Li & Fung plummeted 10 percent to HK$10.44. Yesterday was the last day for holders of the stock to be entitled to shares of the company’s spinoff. The parent said Global Brands Group is expected to start trading in Hong Kong on July 9.

Dai-ichi Life fell 2.3 percent to 1,502 yen in Tokyo. The Nikkei newspaper said its board will approve a 250 billion yen ($2.5 billion) sale of shares to acquire Protective Life Corp.

Anhui Conch rose 5.6 percent to HK$29.10 in Hong Kong on saying it expects first-half net income will surge about 90 percent from a year earlier.

Malaysian Airline System Bhd. surged 9.5 percent to 23 sen after the Wall Street Journal reported the nation’s sovereign investment company is looking at the possibility of taking the airline private to tackle financial problems.

Toshiba Corp. rose 2.5 percent to 484 yen in Tokyo after the Nikkei newspaper reported it’s expected to win a 500 billion yen order to build a nuclear reactor in Bulgaria.

The Asia-Pacific gauge traded at 13.5 times estimated earnings as of yesterday, compared with 16.7 for the S&P 500 and 15.6 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

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

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