Asia Mining Stocks Fall Amid Fed Outlook as Japanese Shares Rise

  • BHP Billiton falls to 10-year low, while Sharp shares surge
  • Markets in Australia, Hong Kong and Taiwan close lower

Asia-Pacific stock markets in Australia, Hong Kong and Taiwan fell as tumbling commodity prices dragged raw-materials shares lower and BHP Billiton Ltd. slumped to a 10-year low. Shares in Tokyo rose as Sharp Corp. surged.

The MSCI Asia Pacific Index climbed 0.1 percent as of 5:27 p.m. in Hong Kong. The increased likelihood of a Federal Reserve interest-rate increase this year is sending the dollar higher, making industrial metals more expensive for buyers holding other currencies. Copper futures rose, after falling below $4,500 a metric ton for the first time in six years on Monday.

“The commodity sector is really being hit hard, primarily by global growth concerns but also the oversupply issue,” Yogesh Dewan, founder and chief executive officer at Hassium Asset Management LLP, told Bloomberg TV. “The market has been cautious.”

Year-to-date group ranked returns on MSCI Asia Pacific Index. Source: Bloomberg

The Shanghai Composite Index advanced 0.2 percent, wiping out a loss of as much as 1.3 percent in the last five minutes of trading. Hong Kong’s Hang Seng Index dropped 0.4 percent. Aluminum Corp. of China Ltd. and Jiangxi Copper Co. led declines. Taiwan’s Taiex Index retreated 1 percent.

Northeast Securities Co. and Founder Securities Co. gained more than 4 percent to pace a rebound for mainland Chinese shares after people with knowledge of the matter said regulators have scrapped a rule requiring brokerages to hold daily net-long positions. Robot-related stocks rallied after state media reported the government would promote development of the industry.

Australia’s S&P/ASX 200 Index slipped 0.9 percent. BHP Billiton fell 1.8 percent in Sydney to the lowest since November 2005. Rio Tinto Group lost 1.5 percent. 

Japan’s Topix index added 0.2 percent. Sharp Corp. jumped 14 percent after Kyodo News reported some of the firm’s loans may be forgiven as part of the government’s potential investment in the struggling display maker. Sharp President Kozo Takahashi is struggling under rising debt and has announced plans to sell the company’s headquarters, withdraw from the TV business in North America and cut back in solar panel manufacturing.

The odds the Federal Reserve will raise interest rates at its next meeting in December climbed to 72 percent.

Source: Bloomberg

Interest-rate futures probability

“The Fed rate hike has been broadcast for such a long time,” Khiem Do, Hong
Kong-based head of multi-asset strategy at Baring Asset Management, which
oversees about $41 billion, told Bloomberg TV. “People are going to rejoice. Equities is still the play for the next few months.”

New Zealand’s S&P/NZX 50 Index added 0.4 percent and South Korea’s Kospi index gained 0.6 percent.

E-mini futures on the Standard & Poor’s 500 Index fell 0.4 percent after a Russian warplane was shot down near the Syrian border. The Turkish president’s office said a Russian Su-24 aircraft was shot down after being warned 10 times in 5 minutes that it was violating the nation’s airspace. The underlying gauge slipped 0.1 percent Monday as gains in consumer companies were overshadowed by a retreat in Allergan Plc and Pfizer Inc. amid their record $160 billion merger.

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