Asian Shares Fall Across Region on Central Bank Policies

Asian stocks fell, led by Japanese shares, after the Bank of Japan kept its policy unchanged. Chinese stocks listed in Hong Kong headed for the longest losing streak in 17 years as a gauge of companies outside Japan fell more than 10 percent from a high last month.

Mitsubishi Estate Co., Japan’s biggest developer by market value, dropped 4.4 percent after the BOJ refrained from adding to its purchase of real estate investment trusts. Emerging market shares plunged in Bangkok, Jakarta and Manila. Samsung Electronics Co., the second heaviest-weighted stock on the MSCI Asian Pacific Index, dropped 2.5 percent in Seoul after its price target was cut at Morgan Stanley.

The MSCI Asia Pacific Index dropped 0.3 percent to 131.36 as of 8:35 p.m. in Tokyo after gaining 1.1 percent yesterday, the biggest increase since May 20. About three stocks fell for each that rose. The MSCI Asia Pacific excluding Japan Index slid 1.4 percent to 438.03, taking its decline since May 9 to more than 10 percent and meeting some traders’ definition of a correction.

“Investors were expecting more” from the BOJ, said Koichi Kurose, chief economist in Tokyo at Resona Bank Ltd., Japan’s fifth-largest lender by market value. “They are concerned Japan’s economy will be hurt sooner rather than later as yields rise and inflation expectations rise.”

Japan’s Topix index dropped 1 percent after the central bank today refrained from extending the maturity of loans to lenders it uses to smooth bond market volatility, bucking economists’ predictions. Policy makers stuck with an April pledge to increase the monetary base by 60 trillion to 70 trillion yen ($611 billion to $713 billion) per year.

Stimulus Outlook

The MSCI gauge fell 8.7 percent through yesterday from this year’s high on May 20 on speculation that a strengthening U.S. economy will lead the Federal Reserve to scale back record stimulus. The measure traded yesterday at 12.9 times average estimated earnings, compared with 14.9 for the Standard & Poor’s 500 Index and 13 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

A gauge of consumer discretionary companies in the Asia-Pacific index led gains this year as Japanese shares rallied on a weaker yen and the promise of policies to end deflation. Energy companies had the biggest declines amid concern that China’s fuel demand will drop as growth slows.

Regional Indexes

Hong Kong’s Hang Seng Index lost 1.1 percent, led by financial and real estate shares. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong dropped 1.6 percent, heading for a 10th straight daily decline, the longest losing streak since 1995. China’s equity market is shut for holidays until June 13.

Hang Lung Properties Ltd., a Hong Kong-based developer that gets 42 percent of sales from China, sank 3.8 percent to HK$25.30. Agricultural Bank of China Ltd., the nation’s third-biggest lender, slid 1.7 percent to HK$3.45.

“There’s a bit of a slow drift due to a lack of catalysts,” said Marco Li, a Hong Kong-based portfolio manager at Manulife Asset Management, which oversees $238 billion. “Economic data from China hasn’t been as good as people would like.”

Thailand’s SET Index dropped 5 percent, the most since October 2011. The Philippine Stock Exchange Index plunged 4.6 percent and the Jakarta Stock Price Index retreated 3.5 percent.

“It’s a period of high volatility for these markets,” Visit Ongpipattanakul, an investment strategist at Trinity Securities Ltd., said by phone in Bangkok. “We should continue to see more outflow of foreign funds from Thailand, Philippines and Indonesia for some time. Concerns about the Fed tapering have pressured the markets.”

Taiwan, Singapore

Australia’s S&P/ASX 200 added 0.4 percent as the market reopened after a holiday and a report showed home loans grew less than expected.

New Zealand’s NZX 50 Index fell 0.2 percent. South Korea’s Kospi index lost 0.6 percent. Taiwan’s Taiex Index gained 0.5 percent. Singapore’s Straits Times Index dropped 1 percent.

Japanese developers fell after the BOJ’s statement. The central bank refrained from expanding its purchase of the REITs after acquiring 138.4 billion yen of the trusts, near the full self-imposed limit of 140 billion yen, according to the bank’s data as of June 10. Mitsubishi Estate dropped 4.4 percent to 2,383 yen and Mitsui Fudosan Co., Japan’s biggest developer by sales, slid 4.1 percent to 2,810 yen.

SoftBank’s Offer

SoftBank Corp. dropped 0.4 percent to 5,500 yen after rising as much as 1.8 percent and falling as much as 2.9 percent. It raised its offer for Sprint Nextel Corp. to counter a bid from billionaire Charlie Ergen’s Dish Network Corp. SoftBank will pay $16.6 billion to Sprint shareholders and inject $5 billion of new capital into the target for a 78 percent stake, the Tokyo-based carrier said in a statement today.

Samsung, the world’s largest smartphone maker, declined 2.5 percent to 1.389 million won. Morgan Stanley cut its earnings estimates for Samsung this year by 1.6 percent as it lowered sales expectations for the flagship Galaxy S4 handset to 61 million units from 71 million, analysts led by Shawn Kim said in a report yesterday.

Futures on the S&P 500 index declined 0.3 percent today. The measure fell less than 0.1 percent yesterday after its biggest two-day gain since January, as investors weighed S&P’s move to boost its outlook for U.S.

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