Asian Stocks Drop as Energy Producers Fall on Oil, Topix Slips

Asian stocks fell on low volume, dragging the regional benchmark equities gauge down from a three-week high, as energy producers dropped and Japanese shares slipped on their final trading day of the year.

Cnooc Ltd., China’s biggest offshore oil and gas producer, slid 3.4 percent in Hong Kong. Toyota Motor Corp. was the biggest drag on the regional measure, retreating 1.4 percent in Tokyo as the yen strengthened against the dollar. Anhui Conch Cement Co. surged 6 percent in Hong Kong after changing its shareholding structure and boosting prospects for reform of Chinese state-owned enterprises.

The MSCI Asia Pacific Index slid 0.6 percent to 137.65 as of 7:09 p.m. in Hong Kong, with energy shares leading declines as oil traded near the lowest level in more than five years. Japan’s stock market is closed for the next three days, while trading finishes early tomorrow and stops Jan. 1 for the New Year’s Day holiday in Hong Kong, Singapore and Australia.

“With the holidays coming up, investors are wanting to sell out of some positions to limit any risk of bad news coming out while the market is closed,” said Takashi Aoki, a Tokyo-based money manager at Mizuho Asset Management Co., which oversees about 3.96 trillion yen ($33.2 billion). “It has a big effect because turnover is so low.”

Global equities are headed for their third straight annual rally, with U.S. shares driving gains the past two weeks after the Federal Reserve said it will exercise patience in raising interest rates. The MSCI World Index of global developed-market shares has increased 4 percent this year, leaving it trading at

16.6 times estimated earnings, near the highest since 2009.

Error Margin

“The market seems fully valued,” said Matthew Coffina, a Chicago-based equity analyst at Morningstar Inc. “The valuation of the overall market still leaves little margin for error.”

Chinese shares have led gains in Asia in 2014, with the Shanghai Composite Index soaring 50 percent. Commodity companies posted the largest declines on the regional index, which is on course to slip 2.6 percent on the year. It’s priced in U.S. dollars, meaning a strengthening greenback weighs on the measure. The dollar has increased against all 12 Asian currencies tracked by Bloomberg in 2014.

Japan’s Topix index lost 1.2 percent today, on volume 29 percent below the 30-day average. The gauge gained 8.1 percent in 2014 in local currency terms, while falling 5.6 percent when converted into dollars.

Hong Kong’s Hang Seng Index slid 1.1 percent today. Australia’s S&P/ASX 200 Index fell 1 percent. South Korea’s Kospi index lost 0.6 percent and Singapore’s Straits Times Index declined 0.1 percent.

New Zealand’s NZX 50 Index lost 0.3 percent. The measure has advanced 18 percent in 2014, the best performance after Denmark among 24 developed markets tracked by Bloomberg.

Futures on the Standard & Poor’s 500 Index slid 0.3 percent today. The underlying measure rose to a record high yesterday.

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