Most Asian Stocks Outside Japan Fall; China’s ZTE Plunges
Most Asian stocks outside Japan fell, led by ZTE Corp. and Korea Zinc Co. Japan’s Nikkei 225 Stock Average rose for the first time in five trading days.
ZTE, China’s second-largest maker of telephone equipment, plunged 16 percent after saying it expects a third-quarter loss. Korea Zinc declined 7.1 percent after gold and silver prices fell. Japanese machinery maker Hitachi Construction Machinery Co (6305), which gets 17 percent of its revenue in China, gained 2.9 percent in Tokyo after China reported the slowest inflation in almost two years and better-than-estimated exports.
The MSCI Asia Pacific excluding Japan Index dropped 0.1 percent to 439.09 as of 7:08 p.m. in Tokyo, with five stocks falling for every four that advanced. The MSCI Asia Pacific Index was little changed at 120.81 after swinging between gains and losses more than 10 times.
“Europe won’t recover and that leaves China as a last resort,” said Kazuyuki Terao, chief investment officer of Allianz Global Investors Japan Ltd. Allianz Global Investors oversees about 250 billion euros ($324 billion) in assets globally. “Investors can’t buy beyond short covering because of economic slowdown concerns. I think people are expecting policy measures out of China.”
The MSCI Asia Pacific Index added 6.1 percent this year through Oct. 12 as a series of stimulus measures from Europe to the U.S. and China countered a global economic slowdown and the European debt crisis. The Asian benchmark traded at 12.8 times estimated earnings on average, compared with 13.6 times for the Standard & Poor’s 500 Index and a multiple of 12 for the Stoxx Europe 600 Index.
European Union leaders will convene for an Oct. 18-19 summit in Brussels as Greece seeks to justify renewed aid and Spain holds out on tapping a bailout.
Japan’s Nikkei 225 Stock Average rose 0.5 percent. South Korea’s Kospi Index fell 0.4 percent. Australia’s S&P/ASX 200 slid 0.1 percent even as home-loan approvals in the nation rose in August, and New Zealand’s NZX 50 Index rose 0.5 percent in Wellington.
Hong Kong’s Hang Seng Index was little changed. The Shanghai Composite Index, which tracks the bigger of mainland China’s stock exchanges, declined 0.3 percent. Taiwan’s Taiex Index (TWSE) dropped 0.2 percent and Singapore’s Straits Times Index was little changed.
Futures on the Standard & Poor’s 500 Index gained 0.5 percent today after the gauge slid 0.3 percent on Oct. 12. Bank of Israel Governor Stanley Fischer said the world is “awfully close” to a recession, adding to concern raised at annual meetings of the International Monetary Fund last week.
ZTE slumped 16 percent to HK$10.56 in Hong Kong after saying yesterday that its third-quarter net loss was probably as much as 2 billion yuan ($319 million), compared with profit of 299.3 million yuan a year earlier.
Angang Steel Co. slid 3.4 percent to HK$4.28 in Hong Kong after the steelmaker said it expects a nine-month net loss.
Korea Zinc declined 7.1 percent to 445,000 won. Gold for immediate delivery fell as much as 0.7 percent to $1,741.75 an ounce, the lowest price since Sept. 26. Spot silver dropped as much as 1.4 percent to $33.05 an ounce, the lowest since Sept. 13.
While China’s exports grew more than expected last month, overseas shipments to the European Union fell for a fourth straight month, according to customs data. Inflation in the world’s second-biggest economy increased 1.9 percent last month, matching the median estimate of 34 economists in a Bloomberg News survey.
Japanese exporters to China gained, with Hitachi Construction Machinery climbing 2.9 percent 1,296 yen in Tokyo. Fanuc Corp. (6954), Japan’s biggest maker of factory robots, added 1.7 percent to 12,380 yen.
Renesas Electronics Corp. (6723), the world’s largest microcontroller maker, surged 14 percent to 302 yen after two people familiar with the matter said it may be acquired for 200 billion yen ($2.55 billion). Innovation Network Corp. of Japan, a state-backed fund, may be joined by private companies to take over Renesas as early as next month, the two people said.
Softbank Corp. (9984) dropped 5.3 percent to 2,268 yen as three people familiar with the talks said Japan’s third-largest mobile-phone company is close to an agreement to buy a 70 percent stake in Sprint Nextel Corp. After the market closed in Japan, Softbank agreed to pay $20.1 billion to buy the stake.
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