Asian Stocks Drop Before BOJ, Fed as Commodities Shares Retreatby
Japan's Topix index declines most in more than a week
Mitsubishi Motors extends five-day plunge to 50 percent
Asian stocks fell for a third day as raw-material shares declined and Tokyo equities slumped before central bank meetings in the U.S. and Japan this week.
The MSCI Asia Pacific Index dropped 0.2 percent to 132.52 as of 4 p.m. in Hong Kong. While the Federal Reserve is expected to refrain from raising borrowing costs on Wednesday, investors will be on the lookout for any shifts in its guidance on the likely trajectory of increases. The Bank of Japan’s meeting concludes the following day and most economists predict monetary stimulus will be stepped up in Asia’s second-biggest economy.
“While policies are supportive of equities, valuations look expensive,” said Hans Goetti, the Dubai-based chief strategist for the Middle East and Asia for Banque Internationale à Luxembourg, which has $40 billion under management. “First-half earnings don’t really look great. Unless you have very good earnings coming through in the second half, I think valuations could be on the high side.”
Toshiba Corp. dropped 1.7 percent in Tokyo as it posted a wider-than-forecast operating loss after the troubled electronics conglomerate wrote down the value of its Westinghouse power unit. Some 27 companies on the Topix index reported earnings Tuesday, with more scheduled to announce later this week.
Japan’s Topix lost 0.7 percent as the yen strengthened 0.3 percent to 110.9 a dollar. Australia’s S&P/ASX 200 Index dropped 0.3 percent while New Zealand’s S&P/NZX 50 Index declined 1 percent, the most since Feb. 9. Both markets resumed trading after a public holiday on Monday. Hong Kong’s Hang Seng Index decreased 0.5 percent, while Taiwan’s Taiex gauge advanced 0.3 percent.
The Shanghai Composite Index climbed 0.6 percent, the most in almost two weeks, in light trading led by technology, drug and consumer companies. The Hang Seng China Enterprise Index of mainland firms listed in Hong Kong rose 0.3 percent.
South Korea’s Kospi index added 0.3 percent. The nation’s economic growth slowed in the first quarter as sluggishness in exports weighed on corporate investment and consumers cut back on spending. Central bank governor Lee Ju Yeol, whose board held rates at a record low last week, said the economy should be on the road to gradual improvement this quarter.
BHP Billiton Ltd., the world’s largest mining company, dropped 3 percent as copper futures declined. Alibaba Health Information Technology Ltd. declined 6.2 percent in Hong Kong trading after its parent said it wasn’t required to make a general offer for shares of the health unit even though regulators had found some breach of rules in the conditions of their original merger.
Mitsubishi Motors Corp. plunged 9.6 percent after the Nikkei newspaper reported the company may have used fuel-efficiency tests inconsistent with government guidelines since the 1990s. The shares have dropped 50 percent over the past five sessions.
E-mini futures on the Standard & Poor’s 500 Index rose 0.3 percent. The U.S. equity benchmark index dropped 0.2 percent on Monday as investors awaited earnings reports to gauge corporate health. Amazon.com Inc., Apple Inc. and Boeing Co. are among the companies due to report their quarterly results this week.
West Texas Intermediate crude climbed 0.7 percent Tuesday before weekly U.S. government inventory and production data.