Asian stocks fell, with the regional benchmark index heading for its lowest close in two weeks, as consumer shares led losses after China devalued its exchange rate to combat an economic slowdown.
China Southern Airlines Co. slumped 18 percent in Hong Kong to lead losses among the nation’s biggest carriers on concern yuan devaluation will increase the size of their dollar-denominated debt and erode earnings. Unicharm Corp, a Japanese diaper maker that gets 15 percent of sales in China, slumped 2.3 percent in Tokyo. Nippon Paint Co. tumbled 18 percent after reporting lower first-quarter net income.
The MSCI Asia Pacific Index dropped 0.8 percent to 140.27 as of 4:01 p.m. in Hong Kong, heading for its lowest close since July 28. China’s devaluation follows economic reports this month showing weaker-than-estimated manufacturing, a plunge in exports and slowing credit growth. Policy makers in the biggest emerging market are trying to balance calls for economic stimulus against long-term goals of increasing the role of markets and cutting back on debt-fueled investment.
“Policy makers and the central bank are still very concerned about the overall economic-growth momentum,” said Qian Wang, Hong Kong-based senior economist for Asia Pacific at Vanguard Group Inc. “China has suffered because of the strengthening of the currency.”
The Shanghai Composite Index closed little changed after climbing as much as 1.1 percent. China devalued its currency after the central bank said earlier Tuesday that a strong yuan puts pressure on exports. The Hang Seng China Enterprises Index of mainland stocks traded in Hong Kong fell 0.2 percent, while the city’s benchmark Hang Seng Index declined 0.1 percent.
Japan’s Topix index slipped 0.2 percent after climbing to an eight-year high on Monday. South Korea’s Kospi index dropped 0.8 percent. Taiwan’s Taiex index decreased 0.9 percent. Australia’s S&P/ASX 200 Index and New Zealand’s NZX 50 Index each fell 0.7 percent.
Singapore’s Straits Times Index sank 1.4 percent, heading for the lowest close since March 2014. The government slashed the upper end of its growth forecast for 2015 after the economy shrank last quarter, signaling a softened outlook even as the government prepares for a general election. The currency slipped to its lowest in five years.
Futures on the Standard & Poor’s 500 Index fell 0.4 percent today. The underlying measure climbed 1.3 percent on Monday after Warren Buffett’s Berkshire Hathaway Inc. agreed to buy Precision Castparts Corp. and commodities-related shares rallied.