Most Asian Stocks Fall Ahead of German Decision, U.S. Fed
Most Asian stocks fell, with the regional benchmark index poised for the first drop in four days, ahead of a court decision on Germany’s participation in Europe’s rescue fund and as investors wait to see if the Federal Reserve will boost economic stimulus.
Cosco Pacific Ltd. (1199), which gets 31 percent of its sales in Europe, rose 0.6 percent and HSBC Holdings Plc erased an earlier loss after a German constitutional court said it won’t delay ruling on the European Stability Mechanism. Guangzhou Automobile Group Co. paced declines among automakers in Hong Kong after China’s car sales trailed analysts’ estimates in August for a second month.
The MSCI Asia Pacific Index declined 0.1 percent to 119.1 as of 7:49 p.m. in Tokyo. About two stocks dropped for each that rose on the measure, with six of the 10 industry groups declining.
“Concern about Europe’s debt crisis is casting a shadow at a time when investors can’t be confident about the global economy,” said Tomomi Yamashita, a senior fund manager in Tokyo at Shinkin Asset Management Co., which oversees about $6.3 billion. “This is not an easy environment to take risks.”
The MSCI Asia Pacific Index gained 1.7 percent this quarter through yesterday as expectations of further stimulus measures overshadowed signs of a global economic slowdown. The Asian benchmark traded at 12.4 times estimated earnings, compared with 13.8 times for the Standard & Poor’s 500 Index (SPXL1) and 12 times for the Stoxx Europe 600 Index.
Japan’s Nikkei 225 Stock Average declined 0.7 percent and South Korea’s Kospi Index (KOSPI) lost 0.2 percent. Australia’s S&P/ASX 200 fell 0.2 percent after a report showed the nation’s business confidence dropped last month. New Zealand’s NZX 50 Index gained 0.5 percent as spending on debit, credit and store cards gained in August.
The Shanghai Composite Index slid 0.7 percent even after data showed China’s new loans exceeded estimates last month. Hong Kong’s Hang Seng Index climbed 0.2 percent and Taiwan’s Taiex Index (TWSE) was little changed.
Futures on the S&P 500 Index rose 0.2 percent today. The index lost 0.6 percent in New York yesterday as Greek Prime Minister Antonis Samaras met officials from the nation’s creditors after failing to secure agreement from coalition partners on spending cuts.
Germany’s Federal Constitutional Court rejected a last minute bid to delay its ruling on the country’s participation in the European Stability Mechanism, a permanent 500 billion-euro fund that offers loans to member states and may buy their bonds to lower borrowing costs.
“There’s still a lot of uncertainty around the implementation of policy in Europe,” said Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State Global Asset Management, which oversees about $150 billion. “The German constitutional court ruling on ESM is obviously a key risk over the next few days and there’s talk about Greece struggling to come out with budget cuts.”
HSBC rose 0.5 percent to HK$69.80 in Hong Kong after falling as much as 0.3 percent. Cosco Pacific rose 0.6 percent to HK$10 in Hong Kong, erasing a drop of as much as 1.8 percent.
Other companies that do business in Europe dropped before the court statement. Nintendo Co., a maker of video-game players that depends on Europe for a third of its sales, lost 0.7 percent to 8,740 yen in Osaka, Japan.
Investors are also awaiting a policy statement on Sept. 13 from the U.S. Federal Reserve’s Open Market Committee. On Aug. 31, Fed Chairman Ben S. Bernanke cited his concern about the jobless rate and said the central bank will provide further stimulus as needed to cement a recovery.
Carmakers fell in Hong Kong after China’s passenger-vehicle sales missed estimates last month and as the country raised the maximum price of gasoline and diesel. Guangzhou Automobile declined 2.2 percent to HK$5.23. Geely Automobile Holdings Ltd., slipped 0.8 percent.
Electronics maker Panasonic Corp. fell 1.7 percent to 534 yen in Tokyo after its long-term credit rating was cut by two levels to Baa1 from A2 and its short-term rating by one rank to Prime-2 from Prime-1, Moody’s said in a statement yesterday. The ratings company cited weak earnings and higher debt.
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