Asian Stocks Outside Japan Decline on U.S. Gridlock, IMF

Tokyo Stock Exchange
A visitor looks at an electronic board displaying stock figures at the Tokyo Stock Exchange in Tokyo. Photographer: Junko Kimura/Bloomberg

Asian stocks outside Japan fell on concern the impasse over the U.S. debt limit may lead to a default and after the International Monetary Fund cut its global outlook. Japan’s Topix index posted its biggest gain in almost three weeks after the yen weakened.

Geely Automobile Holdings Ltd. fell 3.4 percent in Hong Kong after Goldman Sachs Group Inc. sold the carmaker’s shares at a discount, according to a term sheet obtained by Bloomberg. WorleyParsons Ltd. lost 2.9 percent in Sydney after the mining-services provider said it expects 2014 fiscal first-half earnings to decline. SoftBank Corp. slumped 5.7 percent after Citigroup Inc. cut the Japanese mobile carrier’s equity rating. Toyota Motor Corp., Asia’s biggest auto manufacturer, gained 3 percent in Tokyo after falling as much as 0.7 percent.

The MSCI Asia Pacific ex-Japan Index slipped 0.2 percent to 466.21 at 9:39 p.m. in Tokyo, while the broader regional gauge rose 0.3 percent to 138.92. The Topix climbed 1.5 percent, its biggest gain since Sept. 19. The Standard & Poor’s 500 Index fell 1.2 percent yesterday after President Barack Obama said the U.S. economy risks a “very deep recession” should Congress not raise the $16.7 trillion borrowing limit.

“Markets don’t like indecision and bickering by the government,” said Angus Gluskie, managing director at White Funds Management in Sydney who oversees about $550 million. “Political parties are prepared to use these agreements as a bargaining chip. You certainly see a point of nervousness and concern for investors.”

Regional Indexes

New Zealand’s NZX 50 Index fell 0.6 percent, while Australia’s S&P/ASX 200 Index added 0.1 percent. Hong Kong’s Hang Seng Index fell 0.6 percent. Singapore’s Straits Times Index gained 0.3 percent, and Taiwan’s Taiex index dropped 0.4 percent. The Shanghai Composite Index gained 0.6 percent. South Korea’s markets were closed today for a holiday.

The International Monetary Fund cut its global outlook for this year and next as capital outflows further weaken emerging markets, and warned that a U.S. government default could “seriously damage” the world economy. Growth worldwide will be 2.9 percent this year and 3.6 percent next year, the IMF said, compared with July predictions of 3.1 percent for 2013 and 3.8 percent for next year.

Geely Drops

Geely dropped 3.4 percent to HK$4.26. A unit of Goldman Sachs raised $309 million selling 578 million shares of the carmaker at HK$4.15 each, a 5.9 percent discount to yesterday’s close.

Japanese exporters jumped as the yen fell against most of its 16 major counterparts. A weaker yen enhances the value of overseas earnings at Japanese companies. Toyota gained 3 percent to 6,230 yen. Komatsu Ltd., a maker of construction machinery that gets 30 percent of its sales in the Americas, added 2.4 percent to 2,316 yen.

Mizuho Financial Group Inc., Japan’s third-largest bank by market value, dropped 1 percent to 204 yen after saying a former top executive knew it was lending to crime groups three years ago. The bank had earlier said that only compliance officials were aware of the transgression.

WorleyParsons lost 2.9 percent to A$22.10, reversing earlier gains of 2.2 percent, after saying earnings in fiscal 2014 will be more heavily weighted to the second half than in recent years.

SoftBank dropped 5.7 percent to 7,000 yen after its rating was cut to neutral from buy at Citigroup. Market expectations may be too high for the company’s acquisition of Sprint Corp., analyst Hideki Takoh wrote in a report dated yesterday.

Futures on the S&P 500 gained 0.2 percent as the White House prepared to nominate Janet Yellen to succeed Ben S. Bernanke as chairman of the Federal Reserve. Yellen, vice chairman of the central bank since 2010, has articulated the case for maintaining accommodative monetary policy.

“Generally people feel Yellen will take a line that’s not dissimilar from Bernanke, which will be reasonably dovish and accordingly supportive for markets,” Gluskie at White Funds Management said.

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