Asian stocks declined, with the regional gauge heading for its lowest close in two weeks, after Fitch Ratings joined Moody’s Investors Service in warning that Europe faces lower credit ratings.
Mitsubishi UFJ Financial Group Inc., Japan’s largest lender by market value, fell 2.9 percent in Tokyo as the cost of insuring European debt rose toward a record. Advantest Corp. and other chip-related shares slid after bellwether Intel Corp. cut its sales forecast. BHP Billiton Ltd., the world’s biggest mining company and Australia’s top oil producer, lost 1.9 percent after commodity prices fell.
“Asset prices, consumer sentiment and business conditions are all very dependent at the moment on a positive outcome from the euro situation,” said Angus Gluskie, who oversees about $300 million at White Funds Management in Sydney. “The euro nations are purely assuming an austerity agenda and they’re failing to consider the equally important aspect, which is to stimulate and encourage economic growth,”
The MSCI Asia Pacific Index fell 1 percent to 114.49 as of 8:07 p.m. in Tokyo, heading for its lowest close since Nov. 30. Almost three shares fell for each that rose in the measure. The gauge dropped 2.2 percent last week after Standard & Poor’s said it may cut credit ratings for Germany, France and 13 other euro-zone countries.
Japan’s Nikkei 225 Stock Average fell 1.2 percent, while South Korea’s Kospi Index sank 1.9 percent. Australia’s S&P/ASX 200 index slipped 1.4 percent.
Hong Kong’s Hang Seng Index lost 0.7 percent. The Shanghai Composite Index slipped 1.9 percent after a report showed housing sales dropped in most major Chinese cities last week.
Futures on the Standard & Poor’s 500 Index added 0.6 percent today before the release of a report that may show retail sales in the U.S. climbed last month. The index slid 1.5 percent in New York yesterday after Moody’s said last week’s European summit didn’t produce “decisive” measures to end the crisis. Fitch said the summit did little to ease pressure on Europe’s sovereign ratings.
“Nothing new came out of last week’s European summit,” said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co. “If EU nations get downgraded, funding costs in the region will definitely rise.”
Euro Risk Grows
Financial stocks declined on concern that bank earnings may be hurt as Europe’s crisis spreads. An index of credit default swaps tied to Greece, Italy, Spain and 12 other Western European nations rose yesterday, approaching a record reached Nov. 25.
Mitsubishi UFJ slid 2.9 percent to 338 yen in Tokyo. Sumitomo Mitsui Financial Group Inc., Japan’s second-biggest lender, dropped 1.5 percent to 2,239 yen. Westpac Banking Corp., Australia’s second-largest lender by market value, dropped 2.2 percent to A$20.83 in Sydney.
Asian manufacturers of semiconductors and chip-making equipment declined after Intel, the world’s largest chipmaker, cut its sales forecast. The Santa Clara, California-based company said flooding in Thailand caused a shortage of hard-disk drives, forcing computer makers to cut production.
Advantest, which produces chip-testing equipment, dropped 2.6 percent to 800 yen in Tokyo. Tokyo Electron Ltd., Japan’s biggest manufacturer of chip-making gear, fell 1.3 percent to 4,115 yen. Samsung Electronics Co., Asia’s biggest supplier of computer memory chips by sales, declined 3.1 percent to 1.05 million won in Seoul.
Producers of raw materials and energy dropped after commodities fell. Crude oil for January delivery slid $1.64 to $97.77 per barrel yesterday in New York. The London Metals Index, a gauge of six industrial metals, sank 2.5 percent.
BHP dropped 1.9 percent to A$35.82 in Sydney. Glencore International Plc, the world’s No. 1 commodities trader, decreased 2.1 percent to HK$47.85 in Hong Kong. Jiangxi Copper Co., China’s biggest producer of the metal, fell 1.6 percent to HK$17.36.
Property developers in China declined after housing sales dropped in 27 out 35 Chinese cities tracked by Soufun Holdings Ltd. in the week ended Dec. 11. Deals in 13 cities fell more than 50 percent, according to the nation’s biggest real-estate website.
China Resources Land Ltd., a state-owned developer, sank 4.9 percent to HK$12.16 in Hong Kong. Hang Lung Properties Ltd., a Hong Kong-based developer that gets about 45 percent of its sales in the mainland, slipped 2.4 percent to HK$22.45.
The MSCI Asia Pacific Index fell 16 percent this year through yesterday, compared with a 1.7 percent drop in the S&P 500 and a 14 percent decline for the Stoxx Europe 600 Index. Shares in the Asian benchmark are valued at 12.8 times estimated earnings, compared with 12.5 times for the S&P 500 and 10.3 times for the Stoxx 600.
Among stocks that rose, China Gas Holdings Ltd. surged 20 percent to HK$3.37, the most on the MSCI Asian gauge. ENN Energy Holdings Ltd. and China Petroleum & Chemical Corp. offered to buy a controlling stake in the gas supplier to gain control of a distribution network covering 20 Chinese provinces.
Manila Electric Co., the largest Philippine power retailer, climbed 5.5 percent to 249 pesos, the biggest advance since Oct. 11. The company said it plans to divest its stake in Rockwell Land Corp. by distributing its holdings as a property dividend that will be followed by a listing of the developer.