Asian Stocks Drop Before Fed as Investors Weigh Earnings
Asian stocks fell, with the regional gauge retreating after yesterday posting its biggest advance in almost two weeks, as investors weighed company earnings and awaited the Federal Reserve’s policy statement.
Uni-President China Holdings Ltd. (220) slumped 7.9 percent in Hong Kong after the instant-noodle maker’s 2013 profit missed analyst projections. Country Garden Holdings Co. (2007) slumped by most since November 2008 after the Chinese developer’s chief financial officer resigned. Kingsoft Corp. jumped 8.7 percent to a record close after the computer-software maker posted earnings that beat estimates. Fanuc Corp. rose 3.2 percent in Tokyo after Credit Suisse Group AG said it’s a good time to buy the industrial-robot manufacturer’s shares.
The MSCI Asia Pacific Index lost 0.2 percent to 134.73 as of 4:49 p.m. in Hong Kong, after falling and rising as much as 0.4 percent earlier. The U.S. and Europe pledged more sanctions against Russia while President Vladimir Putin, pushing to annex Crimea, said his country didn’t intend to further split Ukraine. The Federal Open Market Committee will end a two-day policy meeting today, after data yesterday indicated the U.S. home-building industry is stabilizing.
“Investors still remain highly cautious,” Matthew Sherwood, who helps manage about $25 billion as the Sydney-based head of investment markets research at Perpetual Ltd., said by phone. “Risk assets have recovered most of their lost ground since the Ukraine crisis was sparked a few weeks ago but there’s still a lot of volatility. The Fed will probably water down their forward guidance and keep U.S. interest rates low for at least another 18 months.”
The Fed will press on with cuts to its asset-purchase program and switch to qualitative guidance for assessing interest rates, according to economists surveyed by Bloomberg. The FOMC will further scale back its bond-buying at the meeting, reducing purchases for the third time by $10 billion to a $55 billion monthly rate, according to the survey done March 14-17.
“We are still seeking a bottom for the market,” Zhang Yanbing, an analyst at Zheshang Securities Co., said in Shanghai. “The economy is not doing well and it’s being exacerbated by property debt problems. Yuan depreciation is adding to the negative sentiment.”
South Korea’s Kospi index and Hong Kong’s Hang Seng Index slipped 0.1 percent. Singapore’s Straits Times Index dropped 0.4 percent, while Taiwan’s Taiex index slid 0.5 percent. Australia’s S&P/ASX 200 Index advanced 0.2 percent, while New Zealand’s NZX 50 Index increased 0.4 percent.
Japan’s Topix index fell 0.1 percent, having swung between a loss of 0.8 percent and a gain of 1.3 percent. Japan Display Inc. tumbled 15 percent to 763 yen on its first trading day in Tokyo after the supplier of screens for Apple Inc. devices raised 318.5 billion yen ($3.1 billion) through an initial public offering.
The MSCI Asia Pacific Index slipped 4.5 percent this year through yesterday, when shares on the gauge traded at 12.7 times estimated earnings. That compares with a multiple of 15.9 for the Standard & Poor’s 500 Index and 14.3 for the Stoxx Europe 600 Index.
Futures on the S&P 500 were little changed today. The U.S. benchmark index climbed 0.7 percent yesterday as housing data bolstered confidence in the economy.
A Commerce Department report showed housing starts were little changed in February after declining less than previously estimated a month earlier, indicating the home-building industry is stabilizing after bad winter weather curbed construction. Permits filed for future projects increased 7.7 percent to a 1.02 million pace in February, the most since October.
Russia cemented its claim to Crimea as Putin showed no sign of backing down in the standoff over Ukraine’s breakaway Black Sea region, prompting Western leaders to vow further sanctions this week.
Leaders of Poland and Estonia, two of the countries on the front line of turmoil in Ukraine, told U.S. Vice President Joe Biden they want a more aggressive stance toward Russia. Biden is on a two-day trip to the region aimed at assuring North Atlantic Treaty Organization allies that the U.S. will support them against any attempt by Russia to encroach on their territory.
Uni-President China sank 7.9 percent to HK$7.24 after reporting full-year net income of 916.4 million yuan ($148 million), missing the average estimate of 966.8 million yuan by analysts tracked by Bloomberg.
Galaxy Entertainment Group Ltd. dropped 2.8 percent to HK$72 after the Macau casino operator reported fourth-quarter adjusted earnings before interest, taxes, depreciation and amortization, or adjusted Ebitda, of HK$3.5 billion ($451 million), lagging the HK$3.67 billion average of nine analyst estimates compiled by Bloomberg.
Country Garden tumbled 12 percent to HK$2.85, the lowest close since September 2012, after saying CFO Estella Ng will resign April 30 for personal reasons.
Among shares that rose, Kingsoft (3888) jumped 8.7 percent to a record close of HK$30.70. Chief Executive Officer Zhang Hongjiang said on Bloomberg Television that the company is loking for acquisitions after reporting full-year profit of 670.7 million yuan. That compares with 432.6 million yuan a year ago and the average estimate of 630.4 million yuan by nine analysts tracked by Bloomberg.
Fanuc climbed 3.2 percent to 16,895 yen in Tokyo. Credit Suisse reiterated its outperform rating, noting robust growth in Japanese machine tool orders announced yesterday.
To contact the reporter on this story: Jonathan Burgos in Singapore at firstname.lastname@example.org