Asia Stock Gauge Falls, Snapping Eight-Day Winning Streak

Asian stocks fell for the first time in nine days, snapping the longest winning streak on the regional gauge this year, with telecommunication and technology shares leading declines.

Naver Corp. slumped 6.5 percent in Seoul, SoftBank Corp. lost 4.6 percent in Tokyo and Tencent Holdings Ltd. fell 4.5 percent in Hong Kong as telecom and technology shares slid. Fanuc Corp., a Japanese maker of factory equipment, sank 1.7 percent. Japanese drug company Daiichi Sankyo Co. rose 3.3 percent after Indian drugmaker Sun Pharmaceutical Industries Ltd. agreed to buy Ranbaxy Laboratories Ltd. Daiichi owns 63.5 percent of Ranbaxy.

The MSCI Asia Pacific Index lost 0.6 percent to 138.51 as of 5:41 p.m. in Hong Kong, with six of the 10 industry groups on the measure falling. Losses in Asian technology firms followed the Nasdaq Composite Index’s biggest retreat in two months on April 4, as investors pared holdings in Internet companies that have led gains in global equities during the past 12 months.

“Some parts of the high-tech space were looking bubbly and overvalued, so there’s some much-needed profit-taking going on,” said Masaru Hamasaki, a senior strategist at Tokyo-based Sumitomo Mitsui Asset Management Co., which oversees about 11 trillion yen ($107 billion). “The rout won’t last long, especially considering the U.S. economic recovery is firm. There may be some change where the selloff in overvalued shares leads to flows into undervalued sectors.”

Regional Gauges

Japan’s Topix index slid 1.6 percent as the yen gained a second day, trading at 103.16 per dollar. The Bank of Japan, which began a two-day policy meeting today, may double purchases of exchange-traded funds as part of a second round of monetary easing, analysts polled by Bloomberg say.

Hong Kong’s Hang Seng Index fell 0.6 percent and the Hang Seng China Enterprises Index of mainland Chinese stocks listed in the city gained 0.5 percent. Markets in mainland China and Thailand are closed for a holiday.

Singapore’s Straits Times Index slid 0.6 percent and Taiwan’s Taiex index dropped 0.1 percent. South Korea’s Kospi index added 0.1 percent and Australia’s S&P/ASX 200 Index retreated 0.2 percent. New Zealand’s NZX 50 Index lost 0.9 percent. Trading volume on benchmark indexes in Australia and Japan was at least 23 percent below the 30-day average, according to data compiled by Bloomberg.

Tech Stocks

Tencent, Asia’s biggest Internet company, fell 4.5 percent to HK$501.50. The stock has gained about 700 percent during the past five years. SoftBank, which owns a stake in Alibaba Group Holding Ltd., sank 4.6 percent to 7,556 yen. Naver declined 6.5 percent to 739,000 won.

More than 1 million put options on an exchange-traded fund tracking the Nasdaq changed hands on April 4 as investors sought protection during a 2.7 percent drop in the gauge. That’s the most trading in bearish contracts since May 7, 2010, the day after $862 billion was erased from the value of U.S. stocks in a matter of minutes.

Standard & Poor’s 500 Index futures slipped 0.3 percent today. The gauge fell 1.3 percent April 4, its largest decline since the first week of February, after large technology stocks from Google Inc. to Yahoo Inc. plunged as investors sold the bull market’s biggest winners.

The Asia-Pacific stock gauge last week climbed to its highest level in more than two months as U.S. data pointed to a recovery from severe winter weather and China outlined stimulus to ward off a slowdown threatening its economic-growth goal.

Relative Value

The measure trades at 12.6 times estimated earnings, compared with 15.9 for the S&P 500 and 14.7 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Pacific Investment Management Co.’s Bill Gross said the pace of employment growth in the U.S. means the Federal Reserve will continue to wind down bond purchases and then consider raising interest rates.

Payrolls in the U.S. rose 192,000 last month after a 197,000 gain in February that was larger than first estimated, the Labor Department reported April 4 in Washington. The median forecast in a Bloomberg survey of economists projected a 200,000 gain. Private employment, which excludes government jobs, surpassed the pre-recession peak for the first time.

U.S. Rates

“We should stand by for an expectation that the first rise in rates in the U.S. will be the first quarter of 2015,” Richard Gibbs, global head of economics at Macquarie Group Ltd., Australia’s largest investment bank, told Bloomberg TV in Sydney. “The data reaffirmed that trajectory.”

The BOJ will boost its annual purchases of exchange-traded funds to 2 trillion yen, according to 36 analysts surveyed by Bloomberg News.

The bank, which is forecast to leave its monetary-base target unchanged tomorrow at between 60 trillion yen and 70 trillion yen, may raise annual bond purchases by at least 10 trillion yen, with July the most-favored time for a policy move. Signs of inflation may deter policy makers from more ambitious plans, even as the economy slows amid this month’s sales-tax increase.

Daiichi Sankyo rose 3.3 percent to 1,813 yen as the firm said it planned to vote in favor of the deal to buy Ranbaxy Laboratories.