Asian Stocks Fall on Valuation Concern as Brokerages Drop

Photographer: Dimas Ardian/Bloomberg

Hatta Rajasa, vice presidential candidate, from left, Prabowo Subianto, presidential candidate, Sudharto P. Hadi, debate moderator, Joko Widodo, governor of Jakarta and presidential candidate, and Jusuf Kalla, vice presidential candidate, sing the national anthem of Indonesia during a debate in Jakarta, Indonesia, on Saturday, July 5, 2014. Indonesians will vote for their next president today. Close

Hatta Rajasa, vice presidential candidate, from left, Prabowo Subianto, presidential... Read More

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Photographer: Dimas Ardian/Bloomberg

Hatta Rajasa, vice presidential candidate, from left, Prabowo Subianto, presidential candidate, Sudharto P. Hadi, debate moderator, Joko Widodo, governor of Jakarta and presidential candidate, and Jusuf Kalla, vice presidential candidate, sing the national anthem of Indonesia during a debate in Jakarta, Indonesia, on Saturday, July 5, 2014. Indonesians will vote for their next president today.

Asian stocks fell for a second day, with the regional benchmark gauge posting its largest decline in two months, after equity valuations touched the highest this year and China inflation data missed estimates.

Toyota Motor Corp. (7203), which gets 75 percent of sales outside Japan, lost 1.1 percent. Nomura Holdings Inc., Japan’s largest brokerage, slipped 2.5 percent as securities firms accounted for the biggest drops on the regional gauge. Navitas Ltd. slumped 31 percent in Sydney as the education provider said it will take an impairment charge of as much as A$40 million ($38 million). Shandong Weigao Group Medical Polymer Co. rose 3.6 percent, among the leading gains on the index, as JPMorgan Chase & Co. advised buying the shares.

The MSCI Asia Pacific Index slid 0.7 percent to 146.53 as of 7:33 p.m. in Hong Kong, with all 10 industry groups declining. The measure closed at a six-year high on July 7, after valuations climbed to the most expensive since December, ahead of the release today of minutes from last month’s Federal Reserve policy meeting and Chinese trade data tomorrow.

“You’d be foolish to be taking any huge bets on markets,” Mark Lister, Wellington-based head of private wealth research at Craigs Investment Partners Ltd., which has about $6.8 billion under management, said by phone. “I definitely think we should still be positioned for a pullback. Markets are pretty fully valued and we’re now probably moving into a more moderate period for growth and returns.”

Regional Gauges

Japan’s Topix index slipped 0.4 percent. Toyota Motor dropped 1.1 percent to 6,062 yen and Nissan Motor Co. retreated 1.1 percent to 978 yen. Nomura sank 2.5 percent to 698 yen.

Australia’s S&P/ASX 200 Index fell 1.1 percent, led by Navitas, which tumbled 31 percent to A$4.86. New Zealand’s NZX 50 Index lost 0.8 percent. South Korea’s Kospi index retreated 0.3 percent and India’s S&P BSE Sensex Index slipped 0.5 percent. Singapore’s Straits Times Index declined 0.2 percent and Taiwan’s Taiex index slid 0.4 percent.

China’s Shanghai Composite Index fell 1.2 percent. Hong Kong’s Hang Seng Index (HSI) and the Hang Seng China Enterprises Index of mainland shares traded in the city declined 1.6 percent. Shandong Weigao rose 3.6 percent to HK$8.35.

Chinese producer prices, also known as factory-gate prices, fell 1.1 percent in June, the slowest pace of decline in more than two years. That compares with a 1 percent drop estimated by economists and a 1.4 percent contraction the previous month. Consumer prices rose 2.3 percent, falling short of analysts’ expectations for a 2.4 percent gain after a 2.5 percent increase in May.

U.S. Futures

Futures on the Standard & Poor’s 500 Index were little changed today. The equity gauge fell 0.7 percent yesterday while the technology-heavy Nasdaq Composite Index slid 1.4 percent, its steepest one-day decline since May. Alcoa Inc. jumped 2 percent in early trading as the company unofficially started U.S. earnings season, reporting sales and profit that exceeded analysts’ estimates.

Indonesians voted in an election today as polls show a close race between Jakarta Governor Joko Widodo and former Suharto-era general Prabowo Subianto.

The MSCI Asia Pacific Index (MXAP) traded at 13.4 times estimated earnings, compared with 16 for the MSCI World Index, according to data compiled by Bloomberg.

Global Brands Group, which manages more than 350 labels including Coach Inc. shoes, began trading in Hong Kong at HK$2.09 and slid to HK$1.80. Li & Fung spun off its licensing and brand business to focus on supplying clothes and toys to global retailers including Wal-Mart Stores Inc.

To contact the reporter on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net

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

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