Asian Stocks Extend Weekly Decline as Investors Weigh Earnings

Why the Markets Were Jolted by the BOJ's Inaction
  • PetroChina, CNOOC, Sinopec profit reports weigh on shares
  • Bank of Japan Thursday confounded forecasts for more stimulus

Asian stocks declined, extending their weekly loss, after the Bank of Japan quashed expectations for further stimulus and earnings from PetroChina Co. to China Petroleum & Chemical Corp. disappointed investors.

The MSCI Asia Pacific Excluding Japan Index retreated 0.6 percent to 415.68 as of 4:19 p.m. in Hong Kong, heading for a weekly loss of 1.9 percent and a 0.3 percent monthly decline. Stocks retreated this week as Japan’s central bank refrained from boosting monetary stimulus and earnings at companies from Canon Inc. to Oversea-Chinese Banking Corp. left investors unsatisfied. Focus now turns to profit reports due from Citic Securities Co., China’s biggest brokerage, and Chinese manufacturing data due at the weekend. Japan’s market is closed Friday for a holiday.

“Central banks look like they have run out of bullets to a degree,” Mark Lister, head of private wealth research at Craigs Investment Partners in Wellington, which manages about $7.2 billion, said by phone. “We’re getting to that point where there are limits to the results they can get from anything more they do. This points to a fragile outlook with still a lot of risks out there.”

The MSCI Asia Pacific Index, the regional equities gauge which includes Japan, is down 1.5 percent this week. Still, it’s up 1.7 percent this month, on course for the first back-to-back monthly advance since April 2015.

Hong Kong’s Hang Seng Index declined 1.5 percent and the Hang Seng China Enterprises Index of mainland stocks traded in the city slipped 1.3 percent. The Shanghai Composite Index lost 0.3 percent. China raised its daily yuan fixing rate against the dollar by the most since July 2005.

An official purchasing managers’ index probably rose to 50.3 in April from 50.2 in March, according to the median estimate in a Bloomberg survey. The data are scheduled to be released May 1. A reading above 50 indicates expansion.

Regional Gauges

Australia’s S&P/ASX 200 Index added 0.5 percent, while New Zealand’s S&P/NZX 50 Index rose 0.5 percent.

South Korea’s Kospi index fell 0.3 percent as industrial output unexpectedly declined in March. Singapore’s Straits Times Index retreated 0.8 percent and Taiwan’s Taiex index slumped 1.1 percent after data showed the nation’s economy shrank more than forecast in the first quarter. India’s S&P BSE Sensex slid 0.6 percent in a second day of losses.

It’s been a busy week of earnings reports across the region. PetroChina sank 3.6 percent in Hong Kong after reporting a 13.8 billion yuan ($2.1 billion) loss for the first quarter on Thursday, its first since it started trading publicly in 2000. Its state-owned peer, China Petroleum & Chemical Corp., the Asian oil refining behemoth known as Sinopec, lost 1.3 percent. Cnooc Ltd. dropped 2.3 percent after reporting a decline in revenue.

The BOJ kept bond-buying, its negative interest rate and exchange-traded fund purchases unchanged at its meeting Thursday.

Futures on the Standard & Poor’s 500 Index slid 0.1 percent after the U.S. benchmark dropped 0.9 percent on Thursday, its steepest decline since April 7. Apple Inc. slumped after billionaire Carl Icahn said he had sold his stake in the iPhone maker because of concerns about the company’s relationship with China.

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