Asian Stocks Head for First Decline in Three Days on Earnings

Toyota Sees Profit Drop 35% on Yen Strength
  • Most Chinese shares drop as investors await economic data
  • Philippine shares retreat after best 2-day gain since 2013

Asian stocks fell, with the regional benchmark index heading for its first drop in three days, amid growing pessimism over corporate earnings from Toyota Motor Corp. to Walt Disney Co.

The MSCI Asia Pacific Index slipped 0.3 percent to 127.39 as of 4:15 p.m. in Hong Kong. Toyota was among the biggest drags for the gauge after forecasting its first annual profit drop in five years due to a stronger yen. With pessimism over the global outlook and concern over central banks’ firepower already keeping investors on tenterhooks, the mixed corporate earnings season has provided another dampener for equity markets, which lost more than $1 trillion in value last week.

“There’s just enough out there to keep investors cautious,” Tim Schroeders, a Melbourne-based portfolio manager at Pengana Capital Ltd., who helps oversee about $1.2 billion in assets, said by phone. “We’ve got earnings disappointments and currency volatility, so people are sitting back and waiting as opposed to continuing with the frenzy.”

Most Chinese stocks fell, led by industrial and consumer-staples companies, as investors awaited the release of data on new loans and money supply that may be released as early as Thursday. The Shanghai Composite Index was little changed.

China Concern

The most recent figures have showed March’s pick up in China’s economic indicators didn’t carry over to April, with manufacturing gauges and trade data missing predictions, while a warning by the People’s Daily about the nation’s high levels of debt have damped hopes for more easing. Investor interest in the world’s second-largest equity market is turning cold as the Shanghai Composite trails all 92 global benchmark gauges tracked by Bloomberg this year with a loss of 20 percent.

Philippine stocks retreated 1 percent, falling from the highest close since Aug. 14. The equity gauge posted the steepest two-day rally since 2013 after the election of Rodrigo Duterte as president. South Korea’s Kospi index lost 0.1 percent. Australia’s S&P/ASX 200 Index slipped 0.2 percent. New Zealand’s S&P/NZX 50 Index fell 0.3 percent, as did Taiwan’s Taiex index. 

Singapore’s Straits Times Index climbed 0.2 percent. Hong Kong’s Hang Seng Index dropped 0.7 percent. Japan’s Topix index finished 0.2 percent higher, reversing earlier losses of as much as 1.3 percent in morning trading, as the yen weakened toward 109 per dollar.

Nissan, Mitsubishi

Toyota dropped 1.4 percent after saying net income will fall 35 percent in the current fiscal year. Casio Computer Co. slumped 12 percent after the maker of watches and digital cameras forecast operating profit that missed analyst estimates. China State Construction International Holdings Ltd. tumbled 9.1 percent after agreeing to buy an office building in Hong Kong from China Overseas Land & Investment Ltd. 

Nissan Motor Co. fell 1.4 percent in Tokyo, while Mitsubishi Motors Corp. jumped 16 percent after the companies said they’re in talks, including for a possible capital tie-up, amid a fuel-economy ratings scandal that has battered Mitsubishi Motors.

Futures on the S&P 500 Index added 0.3 percent. The underlying U.S. equity benchmark index dropped 1 percent on Wednesday as disappointing results from Macy’s Inc. to Walt Disney heightened concern that American consumers remain hesitant to boost spending.

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