Most Asian stocks declined, with the regional benchmark index paring its biggest monthly advance since September, as material producers dropped.
Rio Tinto Group, the world’s No. 2 mining company, dropped 1.3 percent after metals fell in London for the first time in five days. Lynas Corp., which operates a rare-earths processing plant in Malaysia, tumbled 18 percent in Sydney after completing a share placement and as debt-restructuring talks continue. Tokyo Electric Power Co., the utility at the center of the 2011 nuclear disaster, jumped 5.4 percent after a report the Japanese government may revise the law governing compensation after nuclear accidents.
About five shares fell for every for four that rose on the MSCI Asia Pacific Index, which lost 0.2 percent to 141.89 as of 4:25 p.m. in Hong Kong. The gauge is poised for a third weekly advance, bringing its monthly increase to 3.3 percent. The value of global equities climbed to a record $63.9 trillion as the Standard & Poor’s 500 Index reached all-time highs this week.
“There’s room for a correction as valuations are looking stretched following this month’s rally,” Desmond Chua, a strategist at CMC Markets in Singapore, said by phone. “While Japanese inflation was encouraging, this reduces the potential for further monetary easing.”
The S&P 500 traded at 16.3 times estimated earnings yesterday compared with 13.1 times for the Asia-Pacific measure.
Japan’s Topix index added 0.1 percent, erasing losses of as much as 0.2 percent. The country’s core inflation rate accelerated to 3.2 percent in April, the biggest jump in 23 years, data released by the statistics bureau today showed. That was faster than the 3.1 percent estimated by economists surveyed by Bloomberg. The jobless rate held at 3.6 percent last month, in line with expectations, while industrial production missed forecasts, according to a separate report.
South Korea’s Kospi index declined 0.9 percent. The nation’s industrial output increased 2.4 percent in April from a year earlier, missing the median estimate of 3.1 percent by 18 economists surveyed by Bloomberg.
Australia’s S&P/ASX 200 Index fell 0.5 percent. New Zealand’s NZX 50 Index and Singapore’s Straits Times Index both dropped 0.1 percent. India’s S&P BSE Sensex Index was little changed. China’s Shanghai Composite Index fell 0.1 percent and Taiwan’s Taiex index slipped 0.4 percent.
Hong Kong’s Hang Seng Index added 0.3 percent, with casino operator Galaxy Entertainment Group Ltd. leading the advance. The Hang Seng China Enterprises Index of mainland stocks traded in the city climbed 0.9 percent.
The Asia-Pacific gauge rebounded 9.2 percent from this year’s low in February through yesterday amid optimism the U.S. economy can withstand a reduction in stimulus and that Chinese policy makers will step in to bolster slowing growth.
Changes to MSCI indexes will take effect at the close of trading today. Among those to be included are Japanese companies Hikari Tsushin Inc., Japan Display Inc. and Nagoya Railroad Co. China Everbright Bank Co., China Huishan Dairy Holdings Co., Kingsoft Corp. and Shanghai Fosun Pharmaceutical (Group) Co. also will be added.
Futures on the S&P 500 slipped 0.1 percent today. The U.S. equity benchmark index climbed 0.5 percent to a fresh record yesterday after Tyson Foods Inc. offered to buy Hillshire Brands Co.
U.S. gross domestic product shrank an annualized 1 percent in the first quarter, worse than the most pessimistic forecast in a Bloomberg survey of economists, revised Commerce Department figures showed yesterday in Washington. With much of the contraction due to less inventory building that economists say can’t last, some are boosting second-quarter growth forecasts, with Morgan Stanley projecting a 4.2 percent expansion.
Fewer Americans than forecast filed applications for unemployment benefits last week, figures from the Labor Department showed yesterday.
“The global economy is recovering gradually, boosting sentiment on equities,” Steven Milch, Sydney-based chief economist at Suncorp Group Ltd., which manages about $18.6 billion in assets, said by phone. “The underlying picture in the U.S. and Japan is improving.”
Raw-material producers declined as the London Metal Exchange Index, which tracks the prices of commodities from aluminum to copper, dropped 0.7 percent yesterday. Rio Tinto fell 1.3 percent to A$59.30 in Sydney. BHP Billiton Ltd., the world’s biggest mining company, slipped 1.3 percent to A$37.01.
Lynas Corp. tumbled 18 percent to 14 Australian cents, the most since March 2009. The company said it’s working with creditors to restructuring debt obligations after raising an additional A$12 million ($11.2 million) for a share top-up placement.
Tata Motors Ltd. slipped 1.3 percent to 418.90 rupees in Mumbai after India’s biggest automaker posted fiscal fourth-quarter profit that missed analyst estimates as a wider loss at the local business eroded gains from its Jaguar Land Rover unit.
Among shares that advanced, Tepco, as the Japanese utility company is known, surged 5.4 percent to 413 yen, the highest close since March 31. Japan may revise a nuclear-accident compensation law by splitting the responsibility between the government and power-plant operators.
Envestra Ltd. gained 1.1 percent to A$1.365 in Sydney as billionaire Li Ka-shing’s Cheung Kong Group agreed to buy the Australian gas supplier for A$2.4 billion.