Most Asian Stocks Drop as Bets Fed Will Lift Rates in 2015 Rise

  • About five shares fall for every four that rise on MSCI index
  • Hong Kong shares fall as Shanghai gauge climbs to 11-week high

Most Asian stocks dropped as a strong U.S. payrolls report bolstered the case for higher interest rates this year. Japanese shares gained after the yen weakened.

BHP Billiton Ltd., the world’s largest mining company, slid 5.6 percent in Sydney as prosecutors in Brazil sought the suspension of licenses at its iron-ore venture in the country as well as compensation for victims after two dams burst, causing deadly mudslides. Asics Corp. slumped 18 percent in Tokyo after the shoemaker cut its full-year profit forecast. Honda Motor Co. gained 1.9 percent, pacing gains among Japanese exporters whose prospects are improving because of the weaker yen. Citic Securities Co., China’s biggest brokerage, rose s the government plans to resume initial public offering by the end of the year.

About five shares fell for every four that gained on the MSCI Asia Pacific Index, which was little changed at 133.74. Japan’s Topix index climbed 1.8 percent after the yen slid against the dollar on Friday. Odds on the Fed increasing its benchmark rate in December jumped to 70 percent after data showed a 271,000 gain in U.S. payrolls in October, the biggest this year and exceeding all estimates in a Bloomberg survey of economists.

Lowest in more than seven years
Lowest in more than seven years

“Strong U.S. jobs data for October supports the case for a December Fed rate hike,” said Shane Oliver, Sydney-based strategist at AMP Capital Investors Ltd., which oversees about A$156 billion ($110 billion). “The Fed is unlikely to do anything to threaten global growth, and this in turn should help see the global economic recovery continue. As such, share markets are likely back in a broad rising trend.”

The jobless rate fell to a seven-year low of 5 percent and average hourly earnings over the past 12 months climbed by the most since 2009. The median forecast called for a 185,000 advance in payrolls. Estimates of 75 economists in the Bloomberg survey ranged from gains of 75,000 to 250,000. Revisions to prior reports added a total of 12,000 jobs to the August and September readings.

Regional Gauges

South Korea’s Kospi index lost 0.8 percent. Hong Kong’s Hang Seng Index and Taiwan’s Taiex index each declined 0.6 percent. New Zealand’s S&P NZX 50 Index slid 0.4 percent. Australia’s S&P/ASX 200 Index fell 1.8 percent. Singapore’s Straits Times Index decreased 0.4 percent.

The Shanghai Composite Index climbed 1.6 percent to an 11-week high as news of the IPO resumption in the mainland overshadowed China’s weakening trade data. The regulator will lift a five-month freeze on initial public offerings by the end of the year, removing one of its key measures of support for the stock market as equities recover from a $5 trillion rout.

Overseas shipments dropped 6.9 percent in October in dollar terms, the customs administration said Sunday, a bigger decline than estimated by all 31 economists in a Bloomberg survey. Weaker demand for coal, iron and other commodities from declining heavy industries helped push imports down 18.8 percent, leaving a record trade surplus of $61.6 billion.

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