Most Asian Stocks Fall Before ECB as Fed Holds Off Easing
Most Asian stocks fell, with the regional benchmark index poised to drop a second day, as investors await a policy announcement by the European Central Bank after the Federal Reserve refrained from adding stimulus to the U.S. economy.
Samsung Electronics Co. (005930), which gets 39 percent of its sales in Europe and the Americas, lost 2.9 percent. Fiber maker Teijin Ltd. slumped 9.2 percent in Tokyo after cutting its profit forecast. China Yurun Food Group Ltd., mainland China’s second- largest meat supplier, jumped 19 percent in Hong Kong after Malaysian billionaire Robert Kuok’s Kerry Group Ltd. disclosed it owns a stake.
The MSCI Asia Pacific Index fell 0.1 percent to 118.1 as of 7:35 p.m. in Tokyo after swinging between gains and losses at least 14 times. Seven of the 10 industry groups dropped on the measure. The MSCI Asia Pacific excluding Japan Index declined 0.5 percent.
“Asian markets are hoping but not completely believing that the ECB will do more,” said Ayako Sera, a market strategist at Sumitomo Mitsui Trust Bank Ltd., which has 33 trillion yen ($421 billion) in assets. “Investors didn’t expect the Fed to make any moves, so its pledge to support the economy if necessary gave some relief. Investors are being cautious, taking into account the possibility of their expectations being betrayed.”
The MSCI Asia Pacific Index fell 8.3 percent from this year’s high on Feb. 29 through yesterday amid concern Europe’s sovereign-debt crisis will worsen as the U.S. and Chinese economies slow. The regional benchmark index traded at 12 times estimated earnings, compared with 13.4 for the Standard & Poor’s 500 Index (SPXL1) and 11.2 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Japan’s Nikkei 225 Stock Average (NKY) rose 0.1 percent even after the Ministry of Finance reported foreign investors sold 76.5 billion yen ($975 million) in Japanese stocks last week. Tokyo Electric Power Co. soared 10 percent, leading utilities higher, after Goldman Sachs Group Inc. said the owner of the stricken Fukushima Dai Ichi nuclear plant will return to profit next fiscal year.
South Korea’s Kospi Index fell 0.6 percent. Australia’s S&P/ASX 200 gained 0.2 percent after the nation’s retail sales in June matched the biggest advance since April 2011. New Zealand’s NZX 50 Index advanced 1 percent. Taiwan’s financial markets are closed today due to a typhoon.
Hong Kong’s Hang Seng Index dropped 0.7 percent, snapping five days of advances. The Shanghai Composite Index dropped 0.6 percent and Singapore’s Straits Times Index lost 0.5 percent.
The European Central Bank is scheduled to make a policy announcement today, with President Mario Draghi pledging policy makers will do whatever is needed to preserve the euro.
Companies that do business in Europe fell. Samsung Electronics fell 2.9 percent to 1.263 million won in Seoul. Hutchison Whampoa Ltd. (13), an operator of retail chains that gets 55 percent of its revenue in Europe, slid 1.2 percent to HK$68.65 in Hong Kong.
Futures on the Standard & Poor’s 500 Index rose 0.3 percent today. The gauge dropped 0.3 percent in New York yesterday, when the Fed refrained from adding to record stimulus even as economic growth slowed.
“People would like the Fed to do more because I think it would improve the market sentiment a little bit,” said Angus Gluskie, managing director at White Funds Management in Sydney who manages more than $350 million. “But I think the fact that the Fed is not doing anything and still saying they remain prepared to, it’s not a huge negative. I think it’s neutral.”
Japanese stocks rose after the Fed’s inaction pushed up the dollar against the yen as traders pared bets on further monetary policy easing. The yen fell 0.4 percent to 78.44 per dollar yesterday after touching 77.91, the strongest level since June 1. A weaker yen enhances the value of overseas earnings at Japanese exporters when repatriated.
Mazda Motor Corp. (7261), which gets 28 percent of its sales in North America, added 2.2 percent to 94 yen. Sony Corp. (6758), Japan’s No. 1 exporter of consumer electronics, rose 2.4 percent to 964 yen. The company cut its full-year profit forecast after Japan’s stock market closed.
Of the 1,007 companies listed on the Asian benchmark gauge, 255 are scheduled to post earnings this week, according to data compiled by Bloomberg. About 55 percent of the 271 companies that reported since July for which Bloomberg had earnings estimates failed to meet expectations. Earnings per share at companies on the index are expected to grow 19.5 percent this fiscal year.
China Yurun surged 19 percent to HK$5.51 in Hong Kong, its steepest increase since listing in 2005. Kerry Group owns 5 percent of Yurun, according to a disclosure of interests filing to the Hong Kong Stock Exchange.
Shares of China Yurun, down 55 percent this year before today, had plunged in July after its chairman and founder Zhu Yicai dropped active management of the company.
Tokyo Electric Power soared 10 percent to 141 yen after Goldman Sachs said the 1 trillion yen government capital injection that the firm received may pave the way for additional loans and lessen the chance of additional writedowns.
Teijin tumbled 9.2 percent to 207 yen after cutting its fiscal-year operating profit forecast by 19 percent after a 73 percent drop in the quarter ended June 30. The stock was the biggest loser on the Asia-Pacific measure.
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