Most Asian Stocks Drop on Cyprus; China Shares Advance
Most Asian stocks declined amid concern that Cyprus’s rejection of a bailout plan shows Europe will struggle to contain its debt crisis. The losses were limited as Chinese shares rallied ahead of report that may show manufacturing expanded this month.
Samsung Electronics Co. (005930), the world’s largest maker of mobile phones that gets about 19 percent of sales from Europe, slipped 1 percent. Fortescue Metals Group Ltd., Australia’s third-biggest iron ore producer, slipped 2.3 percent after Goldman Sachs Group Inc. said yesterday that global demand for the metal will slow. Guangzhou R&F Properties (2777) Co. jumped 7.6 percent in Hong Kong after the homebuilder in the Southern Chinese city posted full-year earnings that beat analyst estimates.
The MSCI Asia Pacific Excluding Japan Index dropped 0.1 percent to 467.62 as of 6:43 p.m. in Hong Kong, having earlier fallen as much as 0.5 percent. About four shares fell for every three that rose on the gauge. The measure has fallen 2.8 percent this month through yesterday as China’s efforts to rein in property prices and restructure its economy added to concern that Europe mightn’t be able to contain its debt crisis.
“The market has been spooked by what’s happening in Cyprus and concerns about China,” said Khiem Do, Hong Kong-based head of Asian multi-asset strategy at Baring Asset Management Ltd., which oversees about $51 billion. “I don’t think the selldown on Cyprus issue is overdone. They’re playing a hard bargain and that somehow makes investors nervous.”
The MSCI Asia Pacific excluding Japan Index (MXAPJ) is heading for its first decline in six months after Cyprus rejected rejected an unprecedented levy on bank deposits needed to fund a bailout and on concern China will introduce more property curbs after home prices posted the broadest advance since December 2011.
The measure traded at 12.3 times estimated earnings yesterday compared with 14 for the Standard & Poor’s 500 Index and a multiple of 12.7 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
“It’s a great opportunity for anybody who has been left behind by the stock market rally,” Giles Keating, head of research for private banking and asset management at Credit Suisse Group AG, told Bloomberg Television from Hong Kong today.
South Korea’s Kospi Index declined 1 percent, while Taiwan’s Taiex Index fell 0.5 percent. Australia’s S&P/ASX 200 Index slid 0.4 percent as mining shares retreated. Japanese markets were closed today for a holiday.
India’s S&P BSE Sensex dropped 0.6 percent, extending losses for a fourth day, heading for its longest losing streak in five week, amid concern the withdrawal of the government’s biggest partner from the ruling alliance may jeopardize economic reforms.
Hong Kong, Shanghai
Hong Kong’s Hang Seng Index rose 1 percent with volumes about equal to the 30-day intraday average. The measure fell 2.7 percent this year through yesterday, making it the worst- performing index outside Italy.
The Hang Seng may climb to 50,000 by the end of 2015 as global central banks maintain loose monetary policies and as China’s economy grows, Morgan Stanley global strategist Jonathan Garner wrote in a report yesterday.
The Shanghai Composite Index (SHCOMP) rose 2.7 percent, the most since Jan. 14. The Chinese gauge will resume a rally after reaching a 2013 low this week, according Tom DeMark, the founder of Market Studies LLC.
Manufacturing in the world’s second-largest economy expanded this month, forecasts show ahead of the release of a preliminary HSBC Holdings Plc and Markit Economics manufacturing index tomorrow.
Futures on the Standard & Poor’s 500 Index added 0.4 percent today. The S&P 500 dropped 0.2 percent yesterday, sending the gauge to its longest slump of the year, on concern problems in Cyprus could reignite Europe’s debt crisis. The Federal Open Market Committee will conclude a two-day policy meeting today.
Cyprus is the fifth euro-zone country to seek a bailout since 2010 to avoid a collapse of its financial system. Its parliament yesterday rejected an unprecedented levy on bank deposits, dealing a blow to a proposed bailout.
Companies that do business in Europe fell. Samsung slid 1 percent to 1.46 million won in Seoul. LG Display Co. (034220), the largest maker of flat panels that gets, sank 3.9 percent to 31,200 won. Yue Yuen Industrial Holdings Ltd., a supplier of shoes to Nike Inc. and Adidas AG, dropped 1.8 percent to HK$24.60.
A gauge of raw materials posted the biggest decline among the 10 industry groups in the MSCI Asia Pacific excluding Japan Index. Goldman Sachs cut its estimate for iron-ore price this year on expectations demand will moderate.
Fortescue slipped 2.3 percent to A$3.80. BHP Billiton Ltd. (BHP), the world’s biggest mining company. dropped 2.7 percent to A$33.62 in Sydney. Rio Tinto Group, the world’s second-largest iron ore exporter, lost 2 percent to A$57.48.
Guangzhou R&F Properties climbed 7.6 percent to HK$12.20 as it reported full-year net income of 5.5 billion yuan ($885 million), which exceeded the 4.89 billion average estimate by three analysts
Country Garden Holdings Co. (2007), a Chinese developer controlled by billionaire Yang Huiyan, surged 9.4 percent to HK$3.95. Brokerages including BNP Paribas and Kim Eng Holdings Ltd. raised their ratings on the stock to buy after the company posted earnings that beat analyst estimates.
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