Asia Stocks Slide on Europe; Hang Seng Erases 2013 GainsYoshiaki Nohara and Adam Haigh
Asian stocks fell, with the regional benchmark index poised to slide for the first time in three days, on concern Italy’s elections may reignite Europe’s debt crisis. Hong Kong’s Hang Seng Index erased its gains this year on a report Beijing may introduce more property curbs.
Sony Corp., a Japanese consumer electronics maker that gets a fifth of its revenue in Europe, lost 3.7 percent. Shimao Property Holdings Ltd. sank 4.8 percent in Hong Kong. Hanwha Life Insurance Co. plunged 9.8 percent in Seoul after Hanwha Chemical Corp. sold its shares. Global Logistic Properties Ltd. slumped 6.9 percent in Singapore after a sovereign wealth fund in the city-state said it’s selling a stake in the biggest owner of industrial properties in Japan.
The MSCI Asia Pacific Index fell 0.7 percent to 133.3 as of 10:23 p.m. in Tokyo with more than five shares dropping for each that increased. The gauge has climbed 0.2 percent in February, headed for a fourth month of gains, the longest such streak since September 2009.
“Uncertainty about the Italian election result has sparked fears that they may abandon their austerity drive, possibly sparking another bout of volatility in Europe,” said Matthew Sherwood, head of investment market research in Sydney at Perpetual Investments, which manages about $25 billion. This may “make governing and implementing much-needed economic reforms almost impossible.”
Futures on the Standard & Poor’s 500 Index increased 0.2 percent today. The gauge declined 1.8 percent, the biggest drop since November, yesterday as early results suggested Italy’s election would result in a hung parliament, leading to another vote and casting doubts on plans to deal with its debt.
The MSCI Asia Pacific Index gained 10 percent from the end of October through yesterday as Japanese shares rallied on speculation a new government led by Prime Minister Shinzo Abe will press for more stimulus to beat deflation. Asia’s benchmark traded at 14.7 times estimated earnings compared with 13.5 for the Standard & Poor’s 500 Index and 12.4 for the Stoxx Europe 600, according to data compiled by Bloomberg.
Japan’s Nikkei 225 Stock Average dropped 2.3 percent, the most since Jan. 16. Australia’s S&P/ASX 200 Index slid 1 percent and New Zealand’s NZX 50 added 0.3 percent. South Korea’s Kospi Index fell 0.5 percent.
Hang Seng Erases Gains
Hong Kong’s Hang Seng Index fell 1.3 percent today, erasing this year’s 5.1 percent gain reached on Jan. 30. The Hang Seng China Enterprises Index of mainland shares dropped 2 percent to its lowest since Dec. 11. The Shanghai Composite Index lost 1.4 percent while Taiwan’s Taiex Index slid 0.8 percent. Singapore’s Straits Times Index fell 1.1 percent.
“Many investors are starting to rewind their risk positions,” said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo. “The Italian elections are causing uncertainty about its political stability, but this time the euro region does have a safety net with their unlimited bond-purchase plan.”
Italy may be left with a hung parliament after partial election results suggested former Prime Minister Silvio Berlusconi may have garnered enough support to deny victory to Pier Luigi Bersani, who campaigned to maintain the austerity program of outgoing Prime Minister Mario Monti.
Companies that do business in Europe dropped. Sony fell 3.7 percent to 1,290 yen. HSBC Holdings Plc, Europe’s biggest lender, fell 1.4 percent to HK$84.15 in Hong Kong. Esprit Holdings Ltd., a clothier that depends on Europe for 79 percent of its sales, declined 1.4 percent to HK$10.18.
Shimao Property Holdings, which gets all its revenue from the mainland, sank 4.8 to HK14.94 on a report Beijing completed drafting new property control measures, according to Shanghai Securities News, which cited an unidentified person. The State Council last week said it will continue to limit home purchases, according to the report.
Hanwha Life Drops
Hanwha Life Insurance plunged 9.8 percent to 7,190 won in Seoul, dropping the most since at least 2010. Hanwha Chemical sold 17 million shares of the insurer for 7,200 won each, said Park Jeong Hwan, who heads the finance team at Hanwha Chemical. The stock closed at 7,970 won yesterday.
Global Logistic Properties slumped 6.9 percent to S$2.56, poised for the biggest loss since October 2011. Government of Singapore Investment, GLP’s biggest shareholder, is raising S$1.5 billion ($1.2 billion) by offering 595.7 million of the shares at S$2.60 apiece, according to a term sheet obtained by Bloomberg News.
Kumho Petro Chemical Co., a maker of synthetic rubber, plunged 7.2 percent to 109,500 won in Seoul. Tongyang Securities Inc. cut its price target to 110,000 won, saying China’s new production facilities will put pressure on prices.
Japan Tobacco Inc. dropped 0.7 percent to 2,880 yen after the government said it will sell as many as 333.3 million shares in the cigarette maker to help cover reconstruction costs of the 2011 earthquake in the nation’s largest share offering in three years.
QBE Insurance Group Ltd. fell 2.2 percent to A$12.75 in Sydney after Australia’s biggest insurer said its profit missed forecasts after writing down the value of its U.S. units and lowered its dividend payout.