Asian Stocks Decline as Material, Health-Care Shares Lead Slide

  • Santos soars as fund linked to Middle Eastern royals makes bid
  • Kaken Pharma slumps in Tokyo trading on Valeant connection

Asian stocks fell from a two-month high amid concerns that global growth is waning, as material and health-care companies led losses. Shares in Shanghai rallied after slumping in the afternoon session on Wednesday.

IHI Corp. tumbled 11 percent in Tokyo, the largest fall on the regional equities gauge, after cutting its profit forecast. Kaken Pharmaceutical Co. slumped 9.7 percent amid speculation its relationship with Valeant Pharmaceuticals International Inc. may be affected by a shortseller’s allegations of fraud against the Canadian drugmaker. South Korea’s Kospi index lost 1 percent as Samsung Engineering Co. slumped.

The MSCI Asia Pacific Index slipped 0.3 percent to 134.20 as of 5:03 p.m. in Tokyo. The gauge surged to the highest since Aug. 19 on Wednesday, extending its October rally to 8.7 percent, as Japanese shares gained amid speculation the Bank of Japan will boost its stimulus program to stem weak economic growth.

“I’m finding it hard to get bullish, especially after the run-up we’ve had,” said Mark Lister, head of private wealth research at Craigs Investment Partners Ltd. in Wellington, which manages about $7.2 billion. “I see more risks than opportunities. I’m pretty cautious on China and the emerging world and there’s more to come there in terms of pain and volatility.”

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Hong Kong’s Hang Seng Index dropped 0.6 percent and the Hang Seng China Enterprises Index of mainland firms listed in the city slid 0.5 percent as trading resumed after a holiday. The Shanghai Composite rallied 1.5 percent as technology and health-care companies rose before a top-level Communist Party meeting next week to discuss the nation’s economic and social plans for the next five years.

Samsung Engineering Co. retreated as much as 24 percent in Seoul, the most on record, after the nation’s largest builder of engineering projects reported a loss and announced plans to sell new shares to shore up its finances.

Japan’s Topix index lost 0.6 percent and Australia’s S&P/ASX 200 Index rose 0.3 percent. New Zealand’s S&P/NZX 50 Index added 0.1 percent and Singapore’s Straits Times Index gained 0.5 percent. Markets in India are closed for a holiday.

Santos Ltd., an Australian oil and gas producer, surged 16 percent as it rejected a A$7.14 billion ($5.15 billion) takeover proposal from Scepter Partners, an advisory firm that manages assets for Middle Eastern royals. The offer represented a 26 percent premium to the company’s last close.

Economic expansion in most emerging markets lagged behind developed nations for the first time in 14 years in the second quarter as slowing world trade, heavy debt burdens and a pending increase in U.S. interest rates sapped growth, according to Citigroup Inc.

E-mini futures on the Standard & Poor’s 500 Index added 0.3 percent after the underlying gauge retreated 0.6 percent on Wednesday. U.S. stocks declined after Valeant Pharmaceuticals International Inc. tumbled 19 percent, distracting investors from one of the busiest days for corporate earnings this season.

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