Asian stocks fell for a third day, with the regional benchmark index sliding the most in two weeks, as investors weighed earnings and prospects Russia will be subject to new sanctions as tensions over Ukraine intensify.
Honda Motor Co. sank 4.5 percent as the Japanese carmaker forecast full-year profit that missed analysts’ estimates. Japan Exchange Group Inc., operator of the main bourse in the world’s No. 2 equity market, tumbled 6.2 percent after its net-income projection fell short of expectations. China Life Insurance Co., the nation’s biggest company in the sector, slid 2.2 percent in Hong Kong after saying profit fell 28 percent in the first quarter from a year earlier as investment returns declined.
The MSCI Asia Pacific Index lost 0.5 percent to 137.5 as of 5:40 p.m. in Hong Kong, with eight of 10 industry groups falling. The gauge dropped 0.7 percent last week after Chinese manufacturing data signaled persisting weakness in the world’s second-largest economy. The U.S. and European Union will impose new sanctions on Russia as soon as today as the crisis in Ukraine escalates amid the detention of international observers by pro-Russian separatists.
“We expect the market to consolidate in the next couple of months,” Audrey Goh, Singapore-based investment strategist at Standard Chartered Plc, said by phone. “The Ukraine crisis will cause volatility in the market. Softening earnings is another area of concern for investors.”
Representatives of the 28 European Union nations will meet today to widen a list of people subject to asset freezes and travel bans, an official from the bloc said over the weekend. The sanctions will target 15 Russians in positions of power, another diplomat said. Both asked not to be identified because of the sensitivity of the matter.
“The Ukrainian tensions are once again mounting,” Evan Lucas, a Melbourne-based markets strategist with IG Ltd., said in an e-mail to clients. “This will mean that Asia is starting the week on the back foot.”
Japan’s Topix index fell 0.8 percent. The nation’s retail sales rose 6.3 percent in March from February, beating analyst estimates.
China’s Shanghai Composite Index dropped 1.6 percent and Hong Kong’s Hang Seng Index fell 0.4 percent. South Korea’s Kospi index slipped 0.1 percent and New Zealand’s NZX 50 Index lost 0.7 percent. Singapore’s Straits Times Index sank 0.8 percent, while Taiwan’s Taiex index increased 0.4 percent. Australia’s S&P/ASX 200 Index added 0.1 percent after closing last week at its highest since June 2008.
Profit at Chinese industrial companies rose 10.1 percent in the first quarter from a year earlier, according to a report from the country’s statistics bureau released yesterday. China’s official manufacturing purchasing managers’ index, due May 1, is expected to come in at 50.5 for April, up from 50.3 for March, according to a Bloomberg survey of economists. Readings above 50 signal expansion.
The MSCI Asia Pacific Index traded at 12.6 times estimated earnings, compared with 15.9 for the Standard & Poor’s 500 Index on April 25, according to data compiled by Bloomberg.
Futures on the S&P 500 added 0.3 percent today. The U.S. benchmark gauge slipped 0.8 percent on April 25, while the technology-heavy Nasdaq Composite Index dropped 1.8 percent amid concern earnings growth is too slow to justify valuations.
About 43 percent of the companies on the MSCI Asia Pacific Index that posted results since the beginning of the month and for which Bloomberg has estimates missed earnings expectations.
Honda dropped 4.5 percent to 3,315 yen in Tokyo. Net income may increase to 595 billion yen ($5.81 billion) in the 12 months ending in March 2015, from 574.1 billion yen a year earlier, the company said on April 25. That’s 14 percent below the 693 billion yen average of 19 analyst estimates compiled by Bloomberg.
Japan Exchange sank 6.2 percent to 2,062 yen. The bourse operator said today net income for the year through March 2015 will be 21 billion yen, 35 percent short of the 32.5 billion yen average estimate of nine analysts surveyed by Bloomberg.
Japan Display Inc. plunged 16 percent to 672 yen. The company said today operating profit will be 27.2 billion yen for the year ended March, compared with its earlier projection of 30.4 billion yen. Revenue for the year was estimated at 614.2 billion yen, compared with a forecast of 623.4 billion yen.
China Life slipped 2.2 percent to HK$20 in Hong Kong. The insurer said first-quarter net income fell 28 percent to 7.23 billion yuan ($1.2 billion) from a year earlier as investment returns dropped.
Among shares that advanced, Goodman Fielder Ltd. surged 15 percent to 63.5 Australian cents after the maker of Meadow Fresh yogurt and Olive Grove margarine rejected a A$1.3 billion ($1.2 billion) offer from Wilmar International Ltd. and First Pacific Co., saying it “materially undervalues” the company.
Koito Manufacturing Co. soared 15 percent to 2,225 yen in Tokyo after the supplier of lighting equipment to carmakers including Toyota Motor Corp. posted profit that beat estimates.