Asian Stocks Drop Second Day on Miners, China Resources
Rio Tinto Group, the world’s second-largest mining company, lost 1 percent in Sydney as copper futures dropped. China Resources Power plunged 9.6 percent in Hong Kong after China’s anti-corruption agency said it’s probing the chairman of the company’s parent. Great Wall Motor Co., China’s biggest maker of sport-utility vehicles, fell the most since January after first-quarter earnings disappointed analysts at Deutsche Bank AG.
The MSCI Asia Pacific Index dropped 0.2 percent to 138.65 at 6:05 p.m. in Hong Kong after earlier rising as much as 0.2 percent. Shares advanced this morning after U.S. equities completed their longest stretch of gains since October and a weaker yen boosted Japanese stocks. The Topix index closed 0.8 percent lower after earlier gaining as much as 0.6 percent.
“The lack of catalysts is sapping the momentum out of the market after shares climbed in the morning on U.S. gains and a weaker yen,” said Takuya Takahashi, a senior strategist at Daiwa Securities Group Inc. “Investors need to be cautious because earnings may weigh on the market.”
Yaskawa Electric Corp. slumped 5.1 percent to 1,260 yen in Tokyo after the servomotor producer forecast full-year profit that missed analysts’ estimates.
Data on U.S. housing and regional factory output are due today, after an index of leading indicators climbed the most in four months. HSBC Holdings Plc’s and Markit Economics Ltd.’s preliminary gauge of China factory activity due tomorrow may show an increase to 48.3 for April from 48 in March, according to the median of 23 economists’ estimates compiled by Bloomberg. Readings below 50 signal contraction.
“China is going to probably be a little slower than a lot of people think, but overall the global economic recovery is going to continue,” Scott Wren, senior equity strategist in St. Louis for Wells Fargo Advisors LLC, which oversees about $1.3 trillion, said on Bloomberg TV.
The Hang Seng China Enterprises Index of mainland stocks traded in Hong Kong dropped 0.5 percent. The city’s benchmark Hang Seng Index lost 0.1 percent. China’s Shanghai Composite Index (SHCOMP) closed 0.3 percent higher after falling as much as 0.9 percent.
New Zealand’s NZX 50 Index was little changed. Australia’s S&P/ASX 200 Index added 0.5 percent, while Singapore’s Straits Times Index climbed 0.7 percent. Taiwan’s Taiex index and South Korea’s Kospi index each gained 0.3 percent. India’s S&P BSE Sensex advanced less than 0.1 percent.
Raw-material producers declined as copper futures headed for their first drop in three days. Rio Tinto slipped 1 percent to A$62.74 in Sydney. Jiangxi Copper Co., China’s biggest producer of the metal, lost 1 percent to HK$13.42 in Hong Kong.
China Resources Power plunged 9.6 percent to HK$18.98. The company’s profit may be erased due to the possible writedown of 10 billion yuan ($1.6 billion) in coal-mine assets related to a probe and removal of China Resources Holdings Co. Chairman Song Long, according to Pierre Lau, a Hong Kong-based analyst at Citigroup Inc. China Resources Enterprise Ltd. slid 4.2 percent to HK$21.90.
Great Wall lost 6.3 percent to HK$37.40. The carmaker’s first-quarter earnings were disappointing, Deutsche Bank analyst Vincent Ha said, citing lower profit margins as expenses related to new product research and development climbed.
Yue Yuen Industrial Holdings Ltd., a maker of footwear for Nike Inc., sank 5 percent to HK$24.80, the most since July. The company said it plans to increase factory workers’ compensation in a bid to end a strike.
To contact the editors responsible for this story: Sarah McDonald at firstname.lastname@example.org John McCluskey, Jim Powell