Asia Stocks Follow U.S. Shares Lower as Data Spur Rate-Rise Bets

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Asia’s benchmark stock index dropped for a second day, following a decline in global equities after better-than-estimated U.S. economic data bolstered the case for higher interest rates.

Samsung Electronics Co. retreated 3.5 percent as South Korean stocks fell the most since January after the nation’s growth forecast was cut and concern over U.S. rate tightening spurred foreign selling. Henderson Land Development Co. slid 2.5 percent amid declines in Hong Kong property stocks, which are sensitive to borrowing costs. Fuji Heavy Industries Ltd., which gets 60 percent of revenue from North America, added 4.3 percent after the yen touched its weakest level overnight against the dollar since 2007.

The MSCI Asia Pacific Index lost 0.7 percent to 152.1 as of 6:10 p.m. in Hong Kong as about two shares fell for each that rose. The Standard & Poor’s 500 Index sank 1 percent on Tuesday, its biggest slide since May 5, while the MSCI World Index dropped the most since March.

“There’s an exhaustion point where equities just can’t keep going up,” Evan Lucas, a market strategist in Melbourne at IG Ltd., said by phone. “People are starting to ask: how much higher can we go with very little backing in terms of fundamentals and global economic growth?”

The Kospi index fell 1.7 percent after HSBC Holdings Plc cut its outlook for South Korea’s economic growth to 2.8 percent from 3.1 percent and as strong readings for U.S. capital-goods orders and new home sales fueled bets for higher rates. Federal Reserve Bank of Cleveland President Loretta Mester said the U.S. economy is close to the point where it can support increasing borrowing costs.

Hong Kong’s Hang Index lost 0.6 percent. Australia’s S&P/ASX 200 Index retreated 0.8 percent, while New Zealand’s NZX 50 Index lost 0.7 percent. Singapore’s Straits Times Index declined 1 percent. E-mini futures on the S&P 500 were little changed today.

Yen Weakens

Japan’s Topix index rose 0.1 percent, advancing a ninth day to cap its longest winning streak since last June. The yen traded at 123.03 per dollar after yesterday falling 1.3 percent to its weakest since July 2007.

China’s Shanghai Composite Index ended a volatile trading session 0.6 percent higher as it approached the 5,000 level for the first time since 2008. PetroChina Co., the heaviest weighted stock in the benchmark gauge, rose 2.3 percent after mainland industrial profits climbed 2.6 percent in April, swinging from a contraction the month before.

The Shanghai Composite has surged 143 percent in the past year, the most among major indexes tracked by Bloomberg, on speculation the central bank will add to three interest cuts since November to spur growth and widen access to capital markets in the mainland.