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Asian Stocks Fall on Greece Bailout Delay, Westpac Earnings

Asian Stocks Fall After Bailout Delay Rekindles Debt Concern
Pedestrians are reflected in an electronic stock board outside a securities firm in Tokyo, Japan. Photographer: Tomohiro Ohsumi/Bloomberg

Asian stocks fell, with the region’s benchmark index retreating from a six-month high, after a second bailout for Greece was postponed and Westpac Banking Corp. reported lower earnings.

Westpac, Australia’s second-largest lender, fell 3.5 percent as higher funding costs stemming from Europe’s crisis ate into profit. BHP Billiton Ltd., the world’s No. 1 mining company, lost 2.2 percent in Sydney after metal prices dropped and rival Vale SA said earnings fell as customers pressed for discounts. Phison Electronics Corp., a maker of controllers for flash memory, slid 6.9 percent in Taiwan on lower chip prices.

The MSCI Asia Pacific Index dropped 1.2 percent to 125.79 as of 5:11 p.m. in Tokyo, with all 10 groups on the measure falling. The gauge yesterday rose 1.9 percent to 127.34, the highest level since Aug. 4. Shares slipped today after European officials delayed a decision on a 130 billion euro ($169 billion) bailout for Greece until at least Feb. 20.

“The Greek situation is being used to sell and lock in profits today,” said Soichiro Monji, chief strategist at Tokyo-based Daiwa SB Investments Ltd., which manages the equivalent of $37 billion. “If the markets were pricing in a default, losses would be much bigger. Most people are expecting they would have to reach a bailout decision on Feb. 20.”

Japan’s Nikkei 225 Stock Average fell 0.2 percent after gaining 2.3 percent yesterday, the biggest advance since Nov. 29. South Korea’s Kospi Index declined 1.4 percent. Australia’s S&P/ASX 200 lost 1.7 percent even after a report showed the nation’s employers added more jobs than economists expected and the unemployment rate slid. Hong Kong’s Hang Seng Index dropped 0.4 percent.

Bailout Decision

Futures on the Standard & Poor’s 500 Index fell 0.4 percent today. The index slid 0.5 percent in New York yesterday following the delay on a bailout for Greece. U.S. stocks also declined after minutes from a Federal Reserve meeting last month showed policy makers were divided on additional asset purchases to spur economic growth.

Financial companies, led by Australian banks, were among the biggest contributors to losses in the MSCI Asia Pacific Index. Westpac Banking fell 3.5 percent to A$20.22 after saying its unaudited cash earnings in the three months ended Dec. 31 were A$1.5 billion ($1.6 billion) as rising funding costs squeezed profits from lending.

Earnings Analysis

Australia & New Zealand Banking Group Ltd., Australia’s third-largest lender, dropped 2.3 percent to A$21.20. National Australia Bank Ltd. retreated 1.8 percent to A$22.63. HSBC Holdings Plc, Europe’s biggest bank, lost 0.6 percent to HK$69.35 in Hong Kong.

More than half the companies on the MSCI Asia Pacific Index that have reported earnings since Jan. 9 have missed analysts’ estimates, according to data compiled by Bloomberg.

The MSCI Asia Pacific Index gained 11.8 percent this year through yesterday, compared with a 6.8 percent advance by the S&P 500 and an 8 percent gain by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 14.5 times estimated earnings on average, compared with 12.9 times for the S&P 500 and 10.9 times for the Stoxx 600.

BHP Billiton fell 2.2 percent to A$35.30. Rio Tinto Group, Australia’s second-largest mining company by market value, declined 2.3 percent to A$67.28.

Vale, a Rio de Janeiro-based miner, said clients pressured it to revise its pricing system after iron-ore prices fell in October to the lowest level since late 2009.

The London Metal Exchange Index of prices for six industrial metals including copper and aluminum lost 0.5 percent yesterday.

Phison Electronics slumped 6.9 percent to NT$250.50 after Chairman Pua Khein-Seng was quoted by Central News Agency as saying flash memory prices face downward pressure. Prices of the chips, which are used to store songs and photos on portable devices, fell 34 percent over the past year.

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