Asian stocks posted the biggest weekly decline since August after forecasts from Canon Inc. to Japan Exchange Group Inc. disappointed investors and money-market rates in China surged.
Japan Exchange sank 5.8 percent in Tokyo this week after the main bourse operator in the world’s second-largest equity market failed to boost full-year profit guidance as analysts had expected. Canon retreated 1.9 percent as the world’s largest camera maker trimmed its earnings forecast. Industrial & Commercial Bank of China Ltd. dropped 5.4 percent in Hong Kong as Asia’s biggest lender by market value paced a fall among financial shares.
The MSCI Asia Pacific Index sank 1.5 percent to 141.31 this week after climbing to a five-month high on Oct. 22 amid speculation the Federal Reserve would delay tapering stimulus. The slide pulled its earnings multiple down to 13.6 times estimated profit, according to data compiled by Bloomberg.
“There are a lot of risks,” Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd., which manages $131 billion, said by phone. “Only 50 percent of companies are beating forecasts on revenues. There’s also been a tightening in Chinese money markets and when you get news like this, markets are going to be more volatile.”
Of 99 companies in the MSCI Asia Pacific Index that have reported quarterly results this earnings season and for which Bloomberg compiles estimates, 54 posted profit that missed expectations, while 56 missed sales estimates, the data show.
Japan’s Topix index fell 2.3 percent this week, leaving it still 37 percent higher this year, the largest rally among 24 developed equity markets tracked by Bloomberg, amid optimism Prime Minister Shinzo Abe’s policies and unprecedented monetary easing from the Bank of Japan will lead the country out of deflation. Consumer prices climbed from a year earlier in September, a fourth monthly gain, data showed.
South Korea’s Kospi index dropped 0.9 percent even after data showed the nation’s economy expanded more than forecast last quarter. Taiwan’s Taiex Index retreated 1.1 percent. Hong Kong’s Hang Seng Index slid 2.8 percent, the biggest weekly retreat since August. China’s Shanghai Composite posted a second week of declines, falling 2.8 percent.
Singapore’s Straits Times Index gained 0.4 percent. Australia’s S&P/ASX 200 Index rose 1.2 percent, a third week of gains. New Zealand’s NZX 50 Index, which reached a record high this week, advanced 2.2 percent.
Canon, LG Retreat
Canon declined 1.9 percent this week to 3,080 yen yesterday in Tokyo. Japan Exchange lost 5.8 percent to 2,156 yen.
LG Electronics Inc. retreated 3.4 percent to 67,700 won after its third-quarter operating profit and sales missed estimates. Great Wall Motor Co. sank 5.1 percent in Hong Kong after its third-quarter profit disappointed investors.
Hitachi Ltd., a maker of electronic equipment and machinery, bucked the trend, jumping 5 percent this week after preliminary first-half results beat forecasts.
Hong Kong banks retreated as China’s money-market rate posted the biggest weekly jump since a cash squeeze in June after the central bank refrained from injecting funds through open-market operations. ICBC sank 5 percent and Bank of China Ltd. lost 3.9 percent.
Qantas Airways Ltd. slumped 9.4 percent after Australia’s biggest carrier said last week it expects the lowest yields in more than a decade for passenger flights.