Asian Stocks Extend Global Declibe on Growth ConcernAdam Haigh
Asian stocks extended a decline in global equities amid concern that the Federal Reserve’s pledges to keep record-low interest rates for longer won’t counter a global slowdown.
Agile Property Holdings Ltd. plunged 17 percent in Hong Kong as suspension of its shares was lifted after the Chinese developer said its chairman had been confined by order of prosecutors. China Taiping Insurance Holdings Co. dropped 9.6 percent after announcing a rights offer. ASX Ltd. dropped 1.2 percent after equity and bond futures trading on Australia’s main exchange was halted due to a technical issue.
The MSCI Asia Pacific Excluding Japan Index dropped 0.6 percent to 463.49 as of 4:10 p.m. in Hong Kong, heading for the lowest close since March 27. Federal Reserve officials said at the weekend that interest-rate increases might be delayed should slowdowns in other countries threaten the U.S. economic expansion.
“We can expect the market to struggle to find support without central bank help,” said Stewart Richardson, London-based chief investment officer at RMG Wealth Management LLP. “The worry is that the extraordinary monetary policies of recent years have simply papered over serious cracks in the real economy and created financial bubbles that will burst at some point. We remain bearish on the assumption that central bankers will not do any more to help in the weeks ahead.”
The Fed officials’ comments came three days after minutes of the central bank’s September meeting showed authorities highlighted worries over the risks posed to the U.S. economy by deteriorating expansions abroad and a stronger dollar, which could hurt exports and damp inflation.
“If foreign growth is weaker than anticipated, the consequences for the U.S. economy could lead the Fed to remove accommodation more slowly than otherwise,” Vice Chairman Stanley Fischer said Oct. 11 in a speech at the International Monetary Fund’s annual meeting in Washington.
The IMF last week reduced its forecast for global economic expansion in 2015 to 3.8 percent from a July prediction of 4 percent.
Australia’s S&P/ASX 200 Index fell 0.6 percent, while New Zealand’s NZX 50 Index retreated 1.1 percent. South Korea’s Kospi index lost 0.7 percent. Taiwan’s Taiex index tumbled 2.8 percent. Singapore’s Straits Times Index declined 0.8 percent. India’s S&P BSE Sensex index slipped 0.2 percent. Japanese markets are shut for a holiday.
China’s Shanghai Composite Index decreased 0.4 percent, while the Hang Seng China Enterprises Index of mainland stocks traded in Hong Kong lost 0.2 percent. The Hang Seng Index advanced 0.2 percent after falling as much as 0.9 percent.
China’s slowing economy received a shot-in-the-arm from faster export growth in September. A report today showed shipments increased 15.3 percent from a year earlier, the biggest increase since February 2013 and beating the 12 percent median estimate in a Bloomberg survey of analysts.
Futures on the Standard & Poor’s 500 Index lost 0.2 percent after the underlying gauge posted its biggest weekly decline since May 2012.