Asian Stocks Fall on Investor Concern on Stimulus Effect

Asian stocks fell amid concern stimulus measures by central banks won’t be enough to boost global economic growth and as more than 900 companies in Japan’s Topix Index traded ex-dividend today.

BHP Billiton Ltd., the world’s biggest mining company, fell 1.3 percent in Sydney as prices for oil and metals fell. BYD Co., the Chinese carmaker partly owned by Warren Buffett’s Berkshire Hathaway Inc., tumbled 9.8 percent in Hong Kong as CLSA Asia Pacific Markets cut its price target by 94 percent. Singapore Telecommunications Ltd. retreated 3.9 percent after sovereign-wealth fund Temasek Holdings Pte offered to sell S$1.28 billion ($1 billion) of shares in Southeast Asia’s biggest phone company.

Investors are “finally realizing that recently announced liquidity injections from central banks will do nothing to address the structural issues,” said Matthew Sherwood, Sydney-based head of markets research at Perpetual Investments, which manages about $25 billion.

The MSCI Asia Pacific Index dropped 1.3 percent to 121.70 as of 6:30 p.m. in Tokyo, with more than three stocks falling for each that rose. The gauge has gained 3.4 percent this month.

Japan’s Nikkei 225 Stock Average and the Topix both fell 2 percent. More than 900 companies on the latter gauge traded without the right to a dividend today, including bearing-maker NTN Corp., which sank 5.8 percent to 163 yen.

Hong Kong’s Hang Seng Index slid 0.8 percent and China’s Shanghai Composite dropped 1.2 percent. Australia’s S&P/ASX 200 Index retreated 0.3 percent and South Korea’s Kospi Index fell 0.6 percent. Singapore’s Straits Times slipped 0.8 percent and Taiwan’s Taiex declined 0.8 percent.

Global Stimulus

The MSCI Asian benchmark climbed 3.8 percent this quarter as central banks in Europe, the U.S., Japan and China took action to stimulate economic growth. The gauge has climbed 6.9 percent this year compared with a 15 percent gain on the Standard & Poor’s 500 Index and a 13 percent jump on the Stoxx Europe 600 Index. The Asian benchmark traded at 12.8 times estimated earnings compared with 13.9 for the S&P 500 and 12.2 for the Stoxx Europe 600.

Futures on the S&P 500 rose 0.1 percent today. The gauge yesterday fell for a fourth day, retreating 1.1 percent for its biggest decline since June 25, after Federal Reserve Bank of Philadelphia President Charles Plosser said new bond buying announced by the Fed this month probably won’t boost economic growth or hiring and may jeopardize the central bank’s credibility.

Commodities Drop

BHP, which is also Australia’s biggest oil producer, fell 1.3 percent to A$32.81 in Sydney as crude dropped toward a two-month low and copper and aluminum also fell. Honda Motor Co., which gets 44 percent of its auto sales in North America, slid 4.2 percent to 2,438 yen in Tokyo. Toyota Motor Corp. dropped 2.7 percent to 3,100 yen after the Nikkei newspaper reported Asia’s No. 1 carmaker will extend its suspension of production in China.

Glencore International Plc, the world’s largest publicly traded commodities supplier, dropped 4.8 percent to HK$43 in Hong Kong. The shares resumed trading today after the company said it will take a smaller stake in Kazakh zinc producer Kazzinc. Glencore is planning to spend about $43 billion in cash and shares to acquire Xstrata Plc, Kazzinc and Canadian grain handler Viterra Inc.

China’s central bank yesterday added a record 290 billion yuan ($46 billion) to the financial system using reverse-repurchase agreements, seeking to address a cash squeeze in the run-up to a weeklong holiday. The People’s Bank of China conducted 190 billion yuan of 28-day reverse repos and offered 100 billion yuan of 14-day contracts, according to a trader at a primary dealer required to bid at the auctions. That’s the highest for a single day in data compiled by Bloomberg going back to 2004.

China Policy

The PBOC yesterday reiterated it will pursue prudent monetary policy, according to a statement posted to its website following a quarterly meeting of its monetary policy committee.

Japan’s biggest manufacturers probably grew more pessimistic this quarter as China’s economic slowdown and Europe’s debt crisis sapped exports, economists surveyed by Bloomberg News forecast before a report due next month.

The Bank of Japan’s Tankan report will show Oct. 1 that its measure of business confidence deteriorated to a reading of minus 4, the fourth straight quarter that pessimists outnumbered optimists, according to the median of 12 estimates in a Bloomberg News survey. That would mark the longest string of negative readings since Japan emerged from the global recession in mid-2010.

BYD lost 9.8 percent to HK$13.26. CLSA lowered its 12-month price goal for the Hong Kong-traded shares to 41 Hong Kong cents, from a previous estimate of HK$7.40.

Singapore Telecommunications lost 4.2 percent to S$3.19. Temasek is selling 400 million shares in Singapore Telecommunications, representing a 2.5 percent stake, at S$3.20 each, according to two people with knowledge of the deal, who asked not to be identified because the information isn’t public. The price is a 3.9 percent premium from yesterday’s close.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE