Asian Stocks Decline for Third Day on Earnings, Europe

Asian Stocks Fall for Third Day on Earnings, Europe Debt Crisis
A man looks at an electronic stock board outside a securities firm in Tokyo, Japan. Photographer: Kiyoshi Ota/Bloomberg

Asian stocks fell, with the regional benchmark index bound for a third day of losses, after companies including Acer Inc. posted earnings that missed estimates and Moody’s Investors Service lowered credit ratings on five Spanish regions.

Acer slid 3.5 percent in Taipei as Asia’s second-largest computer maker posted third-quarter profit and sales that missed estimates. Canon Inc., a camera maker that gets about 31 percent of sales from Europe, dropped 1.5 percent in Tokyo. Kansai Electric Power Co. slumped 13 percent after the Nikkei newspaper reported the Japanese utility won’t pay a dividend.

The MSCI Asia Pacific Index lost 0.5 percent to 122.59 as of 9:02 p.m. in Tokyo, erasing gains of as much as 0.3 percent. Almost two shares dropped for each that climbed on the measure. The gauge rebounded 13 percent from this year’s low on June 4 through yesterday as stimulus measures in the U.S., Japan and China boosted market sentiment amid a global economic slowdown and Europe’s debt crisis.

“External factors such as the European debt crisis and the U.S. elections are still the biggest risks for the market,” said Angus Gluskie, managing director at White Funds Management in Sydney, which manages more than $350 million. “Earnings are hostage to these macroeconomic factors.”

Of the 47 companies on the regional benchmark index that reported quarterly earnings since Oct. 1, about 57 percent missed analyst estimates, while 43 percent surpassed expectations, according to data compiled by Bloomberg News. More than 100 companies in Australia, China, India, Japan, South Korea and Taiwan are scheduled to post results this week.

Weaker Yen

South Korea’s Kospi Index decreased 0.8 percent. Taiwan’s Taiex Index slipped 0.5 percent and China’s Shanghai Composite Index declined 0.9 percent. Australia’s S&P/ASX 200 Index gained 0.1 percent. Hong Kong markets are closed for a holiday.

Japan’s Nikkei 225 Stock Average rose less than 0.1 percent as exporters advanced after the yen touched a three-month low. The gains were capped as Kansai Electric led the nation’s utilities lower.

Futures on the Standard & Poor’s 500 Index slipped 1.1 percent today. The gauge rose less than 0.1 percent yesterday in New York, reversing an earlier loss of 0.8 percent, as an advance in Apple Inc. shares outweighed disappointing corporate results.

Acer slid 3.5 percent to NT$26 in Taipei. The company posted third-quarter net income of NT$68 million ($2.3 million), less than the NT$503 million average of 18 analyst estimates compiled by Bloomberg.

Earnings Forecast

GS Yuasa Corp. plunged 13 percent to 314 yen in Tokyo after the battery maker cut its net-income forecast by 39 percent to 8 billion yen ($100.1 million) for the year ending March 31, hurt by a plunge in sales of lithium ion batteries used in electric cars.

SMS Management & Technology Ltd. tumbled 23 percent to A$4.95 in Sydney after the information-technology company said it expects slower first-quarter sales growth.

Pacific Brands Ltd. slid 4.5 percent to 53 Australian cents after the underwear maker said the business environment isn’t showing signs of improvement, citing a decline in underlying sales year-to-date.

Companies that do business in Europe declined after Moody’s lowered its credit rating for Catalonia and four other Spanish regions, citing “deterioration in their liquidity positions.” Concerns about the country’s creditworthiness have grown since Prime Minister Mariano Rajoy requested as much as 100 billion euros ($130 billion) in European Union aid to shore up Spanish lenders amid signs the nation may miss its budget deficit goals.

Posco Downgrade

Canon slid 1.5 percent to 2,613 yen in Tokyo. SK Hynix Inc., a maker of computer memory chips that gets about 13 percent of sales from Europe, fell 1.5 percent to 23,050 won in Seoul.

Posco, Asia’s third-biggest steelmaker by output, slid 2.1 percent to 348,500 won after Standard & Poor’s Ratings Services downgraded its credit rating, citing the company’s weakening operating performance.

Kansai Electric slumped 13 percent to 595 yen after the Nikkei newspaper reported the utility won’t pay a year-end dividend for the first time since 1951, as earnings are unlikely to recover on rising costs of fuel to cover halted nuclear reactors. Kansai Electric said in a release it hasn’t decided on the year-end dividend payout.

The MSCI Asia Pacific Index traded at 13 times estimated earnings as of yesterday, compared with 13.7 for the Standard & Poor’s 500 Index and 12.2 for the Stoxx Europe 600 Index.

Apple’s iPad

Among stocks that rose, LG Display Co., the world’s second-largest maker of liquid-crystal displays, advanced 1.9 percent to 30,050 won in Seoul after winning a U.S. patent infringement case and amid speculation sales may be boosted by a new iPad to be unveiled today by customer Apple Inc.

“The portion of specialty panels in LG Display’s sales will rise in the fourth quarter, helped by supplies for the iPad Mini and iPhone 5,” Jeff Kang, an analyst at Daishin Securities Co., wrote in a report today. Kang, who has a buy rating on LG Display, raised the stock-price estimate by 17 percent to 42,000 won.

Japanese exporters gained after the yen depreciated to as low as 80.01 against the dollar today in Tokyo, the weakest since July 6. A weaker yen boosts the value of overseas income at Japanese companies when repatriated.

Nikon Corp., a camera maker that gets about 85 percent of its sales overseas, gained 1.6 percent to 2,044 yen. Fanuc Corp., a maker of factory robotics, climbed 1.9 percent to 13,200 yen.

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