Asian stocks fell, with the regional benchmark index heading for a one-week low, as a slump in commodities and the fall of China’s factory gauge to a 15-month low heightened concern global economic growth is slowing.
Mitsubishi Corp., Japan’s biggest trading house that gets about 43 percent of revenue from energy and metals, slipped 2.9 percent in Tokyo. Newcrest Mining Ltd., Australia’s largest gold producer, sank 4.8 percent in Sydney as the bullion dropped. Komatsu Ltd. slid 1.6 percent after U.S. rival Caterpillar Inc. cut its sales forecast. Daelim Industrial Co. slumped 12 percent in Seoul after the South Korean construction company posted operating profit that missed analyst estimates.
The MSCI Asia Pacific Index lost 0.8 percent to 142.51 as of 4:13 p.m. in Hong Kong. The gauge is set for a 1.5 percent decline this week as concern over supply gluts sent gold to industrial metals and oil tumbling. Adding to commodity investors’ pain is the resurgent dollar, with focus shifting to next week’s Federal Reserve policy meeting amid buoyant economic data. U.S. stocks fell for a third day as earnings from 3M Co. and Caterpillar disappointed.
“With the U.S. dollar likely to keep rising as the Fed prepares to raise rates, there’s still some sort of weakness to come in the commodity space,” Angus Gluskie, managing director at White Funds Management Pty in Sydney, who oversees $550 million, said by phone. “The earnings outlook in the U.S. is also somewhat subdued as a result of the strong U.S. dollar. We’re not likely to see a massive rally in the next few months.”
The Hang Seng China Enterprises Index of mainland equities traded in Hong Kong dropped 1.3 percent, extending declines for a sixth week, while the city’s benchmark Hang Seng Index fell 1.1 percent. The Shanghai Composite Index lost 1.3 percent. The preliminary Purchasing Managers’ Index from Caixin Media and Markit Economics was at 48.2 for July, down from 49.4 the previous month. The median estimate in a Bloomberg survey was for an increase to 49.7.
“The PMI data was rather poor and surprised most analysts,” said Gerry Alfonso, a sales trader at Shenwan Hongyuan Group Co. in Shanghai. “If that trend continues over the next few months then it would reasonable to assume that the economy was in a weaker shape than many analysts forecasted.”
Japan’s Topix index slid 0.5 percent and South Korea’s Kospi index dropped 0.9 percent. Australia’s S&P/ASX 200 Index fell 0.4 percent. New Zealand’s NZX 50 Index and Singapore’s Straits Times Index each lost 0.1 percent. Taiwan’s Taiex index declined 0.3 percent.
E-mini futures on the Standard & Poor’s 500 Index gained 0.2 percent. The U.S. equity benchmark index retreated 0.6 percent on Thursday.
The earnings season has been spotty for U.S. companies so far, with sluggish demand overseas damping returns for some multinational companies. Disappointing results from Apple Inc. and Microsoft Corp. earlier in the week sparked a selloff in technology shares.