Asian stocks fell for a second day after weaker growth in U.S. payrolls and manufacturing added to evidence of a slowdown in the world’s largest economy and as the yen rose, curbing the earnings outlook for Japanese exporters.
Rio Tinto Group, the world’s second-largest mining company, declined 2 percent in Sydney, leading raw-materials shares lower as metals prices fell. Lenovo Group Ltd. dropped 2.7 percent as a person familiar with the discussions said talks over the sale of International Business Machines Corp.’s server division to the Chinese computer maker broke down. Toyota Motor Corp., the world’s biggest carmaker, slid 1.1 percent in Tokyo.
The MSCI Asia Pacific Index fell 0.4 percent to 140.85 as of 5:11 p.m. in Tokyo, with about three shares falling for every two that rose. Six of the 10 industry groups on the gauge retreated. Markets in China reopened after a holiday.
“We all know that things are getting a little bit slower,” said Sydney-based Kumar Palghat, a money manager and founder of Kapstream Capital, which oversees at least $5.2 billion. “It’s way too early for the Fed to even contemplate removing stimulus.”
Japan’s Nikkei 225 Stock Average fell 0.8 percent and the broader Topix Index slipped 0.4 percent. Australia’s S&P/ASX 200 Index sank 0.7 percent, extending losses as a government report showed building permits unexpectedly dropped in March. New Zealand’s NSX 50 Index fell 0.6 percent. South Korea’s Kospi index slid 0.3 percent.
Hong Kong’s Hang Seng Index fell 0.3 percent and China’s Shanghai Composite lost 0.2 percent as a private gauge of Chinese manufacturing declined last month, adding to signs that growth in the world’s second-biggest economy will cool for a second straight quarter. Taiwan’s Taiex Index rose 0.4 percent and Singapore’ Straits Times Index added 1 percent.
The regional MSCI Asia Pacific gauge climbed 9.3 percent this year through yesterday amid optimism Japan will deploy more measures to beat deflation and that policy makers in the U.S. and China remain on standby to buoy growth.
Futures on the Standard & Poor’s 500 Index gained 0.3 percent today, indicating U.S. markets will rebound from yesterday’s decline following slower growth in American payrolls. The S&P 500 yesterday dropped 0.9 percent, retreating from a record high.
The Fed will maintain its bond buying at $85 billion a month, the Federal Open Market Committee said at the conclusion of a two-day meeting in Washington yesterday. It left unchanged its statement that it plans to hold its target interest rate near zero as long as unemployment remains above 6.5 percent and the outlook for inflation doesn’t exceed 2.5 percent.
Reports yesterday showed U.S. companies added fewer workers than forecast in April and the Institute for Supply Management’s factory index fell to 50.7 in April from 51.3 in March. The Labor Department publishes its jobs and unemployment report on May 3. It may show combined payrolls for companies and government agencies increased by 148,000 workers in April after rising 88,000 in March, according to a survey of economists by Bloomberg.
Energy companies and raw-materials producers posted the biggest declines among the 10 industry groups in the MSCI Asia Pacific Index. Crude oil futures traded near a one-week low, while the London Metals Exchange Index of six base metals lost 3.2 percent yesterday, the most in more than four months. The index entered a bear market on April 23, commonly defined as a retreat of more than 20 percent from its most recent peak.
Cnooc Ltd., China’s largest offshore oil producer, decreased 2.2 percent to HK$14.16 in Hong Kong. Rio Tinto slid 2 percent to A$53.91 in Sydney, while BHP Billiton Ltd., the world’s biggest mining company, lost 1.2 percent to A$31.79.
Lenovo sank 2.7 percent to HK$6.90 in Hong Kong. Discussions for the sale of IBM’s server business to Lenovo broke down after the two sides couldn’t agree on a price, said a person familiar with the discussions. Lenovo shares jumped 9.9 percent in the past two weeks after Bloomberg reported the talks on April 19.
Japanese exporters fell as the yen strengthened for a sixth day, reducing the value of overseas income at the nation’s companies when repatriated. Toyota retreated 1.1 percent to 5,490 yen, paring this year’s 37 percent advance. Nissan Motor Co. declined 2 percent to 979 yen.
Hyundai Merchant Marine Co. dropped 9.9 percent to 9,240 won after South Korea’s second-biggest shipping line announced plans to sell $117.6 million worth of exchangeable bonds.
Among stocks that advanced, LG Uplus Corp., South Korea’s smallest mobile-phone operator, surged 15 percent to 11,950 won, the most on the MSCI Asia Pacific Index. The stock led a rally in the nation’s carriers on speculation lower marketing costs will boost profit.
DBS Group Holdings Ltd. jumped 4.4 percent to S$17.49 in Singapore, heading for its highest close since May 2008. Southeast Asia’s largest bank posted an unexpected increase in profit as fees, commissions and trading income rose.