Asia Stocks Fall as Earnings Disappoint, Investors Digest Fed

  • Fed officials say they're considering a move at `next' meeting
  • China Life, Woolworths shares slide in Hong Kong and Sydney

Asian stocks fell for a third day after the Federal Reserve signaled it’s prepared to raise interest rates as soon as December and results at companies from China Life Insurance Co. to Woolworths Ltd. disappointed investors.

China Life slid 5.4 percent in Hong Kong after posting a 74 percent fall in profit. Nintendo Co. slumped 9 percent after the company said its new smartphone game application won’t be released until March, at least three months later than originally promised. Woolworths tumbled 9.8 percent after Australia’s largest supermarket chain said its key measure of sales in the first quarter fell at the fastest rate in records dating back to at least 2005. Samsung Electronics Co. gained 1.3 percent after the mobile phone maker said it will buy back and cancel 11.3 trillion won ($10 billion) of shares.

The MSCI Asia Pacific Index lost 0.9 percent to 134.09 as of 6:01 p.m. in Tokyo. The measure surged 9.3 percent in October through Wednesday, on course for its best month since May 2009, as China cut interest rates and European officials signaled a willingness to add to stimulus. After the Fed left borrowing costs unchanged Wednesday, investors digested whether further job gains will lead to higher inflation and allow the central bank to close an unprecedented era of near-zero rates.

Hawkish Tone

“The market is trying to look for some positives which aren’t there,” said Puru Saxena, the CEO and founder of Puru Saxena Wealth Management in Hong Kong, told Bloomberg TV. “Data is actually weakening, not getting any stronger. Things are deteriorating but the Fed is still telling everybody that things are getting better. I don’t think they will” raise rates in December.

The Federal Open Market Committee dropped a reference to global risks in a statement released Wednesday in Washington. The Fed’s hawkish tone caught some investors off-guard. Only last month officials seemed concerned that slowing growth abroad could delay progress toward attaining higher inflation, which Fed-watchers viewed as a warning that liftoff might get pushed into 2016.

Hong Kong’s Hang Seng Index declined 0.6 percent and the Hang Seng China Enterprises Index of mainland firms listed in the city lost 1.1 percent. The Shanghai Composite added 0.4 percent.

Growth Target

The Communist Party is due to end a four-day plenum for its central committee Thursday, and may release a general outline of the social and economic development plan for the next five years. Premier Li Keqiang highlighted a minimum growth estimate for China in the coming five years that could indicate the leadership’s readiness to accept the weakest period of expansion since the economy was opened up three decades ago.

China needs annual growth of at least 6.53 percent in the next five years to meet the government’s goal of establishing a “moderately prosperous society,” Li said in an Oct. 23 speech to Communist Party members, according to people familiar with the matter who asked not to be named as the remarks weren’t public.

Japan’s Topix index was little changed. Economists are divided on whether the Bank of Japan will add to stimulus on Friday.

Australia’s S&P/ASX 200 Index lost 1.3 percent and New Zealand’s NZX 50 Index rose 0.1 percent. South Korea’s Kospi index slipped 0.4 percent and Singapore’s Straits Times Index declined 1.1 percent. India’s S&P BSE Sensex Index lost 0.6 percent and Taiwan’s Taiex Index slipped 1.1 percent.

E-mini futures on the Standard & Poor’s 500 Index slipped 0.5 percent. The underlying gauge climbed 1.2 percent on Wednesday to the highest since Aug. 18 as banks and energy companies advanced.

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