Asian stocks fell, with the regional benchmark heading for its longest losing streak since September, as investors weighed the outlook for U.S. interest rates and Chinese shares retreated from a seven-year high.
CRRC Corp., formed by the merger of Chinese rail companies, tumbled 13 percent as it lost more than $10 billion in market value the day after its Hong Kong debut. Nissan Motor Co., a carmaker that gets more than 80 percent of sales abroad, slipped 3.2 percent in Tokyo as the yen strengthened. HTC Corp. sank 9.9 percent in Taipei as the smartphone maker was downgraded by brokerages after cutting its sales forecast.
The MSCI Asia Pacific Index declined 1 percent to 145.97 as of 4:05 p.m. in Hong Kong, the biggest drop since May 7. The Standard & Poor’s 500 Index fell to a two-month low on Monday as investors considered the timing of an interest-rate increase and the outlook for Greece’s debt talks. Strong jobs data Friday bolstered bets the Federal Reserve will raise interest rates this year. German Chancellor Angela Merkel demanded urgent action from the Greek government on Monday after it rejected the terms of an aid package again last week.
“We still have concerns over U.S. monetary policy and Greece hanging over our heads,” said Toshihiko Matsuno, chief strategist at SMBC Friend Securities Co. in Tokyo. “If the U.S. moves towards raising rates, bonds will be sold and, if that turns into a big move, there’ll also be consequences for stocks.”
Creditors are growing increasingly exasperated with Greek Prime Minister Alexis Tsipras’s negotiating tactics. U.S. President Barack Obama voiced his concerns about the standoff over Greek financial aid at a summit of Group of Seven leaders. European Commission President Jean-Claude Juncker said Greece is not doing enough to ensure it can stay in the euro.
“A lot of people are worried about Greece,” Kirk Hartman, president and chief investment officer of Wells Capital Management in Los Angeles, said on Bloomberg TV. “It would be better for Greece to restructure, then negotiate. We’re in for a long summer.”
E-mini futures on the S&P 500 Index added 0.2 percent today after the underlying equity measure lost 0.7 percent on Monday. Reports on U.S. consumer sentiment and retail sales are due this week, both of which are forecast to show an improving economy.
Japan’s Topix index slipped 1.7 percent. South Korea’s Kospi index lost 0.1 percent today. Taiwan’s Taiex index sank 1.9 percent to close at the lowest since January. New Zealand’s NZX 50 Index fell 0.4 percent. Australia’s S&P/ASX 200 Index slid 0.5 percent as trading resumed following a holiday on Monday.
China’s Shanghai Composite Index fell 0.4 percent after inflation data signaled weaker demand and traders weighed whether MSCI Inc. will add mainland securities to its global indexes. The gauge has rallied 58 percent this year as the government eased policy to revive growth and implemented reforms to rebalance the economy by focusing on consumption instead of investment. MSCI will announce its decision tomorrow before markets open.