Asia Stocks Head for Two-Month Low Amid Greece Talks; Yen Climbs

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Alexis Tsipras
Greek Prime Minister Alexis Tsipras. Photographer: Kostas Tsironis/Bloomberg

Asian stocks fell, with the regional benchmark index heading for its lowest close since April 7, as Japanese shares slid on a stronger yen and investors awaited the outcome of a standoff between Greece and its creditors.

Sony Corp., a consumer electronics maker that gets more than 70 percent of sales overseas, dropped 1.4 percent in Tokyo. Nestle India Ltd. dropped 9 percent in Mumbai amid reports its Maggi instant noodles contain high levels of lead and chemicals. Digital Domain Holdings Ltd. plunged 41 percent, becoming the latest Hong Kong stock to tumble with no apparent explanation after surging more than 500 percent this year.

The MSCI Asia Pacific Index slipped 0.3 percent to 150.06 as of 4:11 p.m. in Hong Kong. Japan’s Topix index sank 0.3 percent as the yen traded at 124.13 to the dollar after gaining 0.5 percent on Tuesday to halt a seven-day decline. The impasse over Greece’s future lingered as both sides worked on rival proposals for the conditions of a financial lifeline with debt payments looming. Euro-area bonds wiped out gains for the year amid a selloff in Europe and U.S. debt that was reignited Tuesday.

“There’s every reason for equity markets to be volatile at the moment given the steepening yield curve globally,” Tim Schroeders, a portfolio manager who helps oversee about $1 billion in equities at Pengana Capital Ltd. in Melbourne, said by phone. “We’ve had some explosive gains in the Asian markets, particularly in China and Japan. The probability is a deal on Greece will get done at the 11th hour but there will be a bit of drama until that deadline.”

Greek Impasse

Greek Prime Minister Alexis Tsipras will meet European Commission President Jean-Claude Juncker after creditors agreed on a document designed to avert a default that will be presented to Greece. Investors are also waiting on the European Central Bank’s monthly interest-rate annoucement.

The Shanghai Composite Index closed little changed after fluctuating between a 1.8 percent loss and a 0.6 percent gain, with 100-day volatility surging to the highest in more than five years. The equity benchmark has advanced 141 percent over the past 12 months.

The Hang Seng Index today gained 0.7 percent in Hong Kong, while the Hang Seng China Enterprises Index of mainland shares traded in the city slid 0.6 percent.

Regional Gauges

Australia’s S&P/ASX 200 Index dropped 0.9 percent. The nation’s economy expanded at a faster pace than forecast in the first quarter, validating the central bank’s decision Tuesday to keep interest rates steady.

New Zealand’s NZX 50 Index lost 0.1 percent. Taiwan’s Taiex index declined 0.6 percent, while South Korea’s Kospi index fell 0.7 percent. Singapore’s Straits Times Index added 0.3 percent.

E-mini futures on the Standard & Poor’s 500 Index rose 0.1 percent. The underlying U.S. equity benchmark index fell 0.1 percent on Tuesday as investors assessed U.S. economic data for potential clues on on the timing of a Federal Reserve interest-rate increase. A report showed factory orders slipped more than economists expected.

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