Asian Stocks Drop as Energy Shares Slide, Apple Disappoints

  • U.S. consumer confidence fell more than forecast in October
  • Japan’s Topix index closes at highest level since April

Asian stocks dropped as energy equities slid with oil and disappointing Apple Inc. earnings weighed on its suppliers in the region. Japanese shares rallied to the highest level since April amid positive earnings from companies including NTT Docomo Inc.

The MSCI Asia Pacific Index slipped 0.1 percent to 140.22 as of 4:04 p.m. in Hong Kong, with about two shares falling for each that gained. Energy companies led losses among the measure’s 11 industry groups, tracking a drop in oil, on speculation Russia won’t join OPEC’s planned output cuts. Samsung Electronics Co. retreated after Apple reported sliding prices for its smartphones and forecast lower-than-expected profitability over the holiday period. Hong Kong shares fell the most in almost two weeks.

The Asia-Pacific share measure has lacked direction this month, with volatility falling as investors wait for the outcome of the U.S. presidential election on Nov. 8 and for the Federal Reserve to decide on when to raise interest rates. Traders are also weighing third-quarter results, with 53 percent of companies on the index that have reported so far posting profits that topped analyst estimates.

“Apple does speak directly to the region as a lot of its supply chain is in Asia, and that will add to weakness,” said Michael McCarthy, chief market strategist in Sydney at CMC Markets. Asian earnings have been generally positive so far, he said.

Canon, Nintendo

Japan’s Topix closed 0.4 percent higher, swinging from a 0.3 percent decline. NTT Docomo rose 2.8 percent. Nintendo Co. fell as much as 7.4 percent in German trading after the company cut its full-year operating profit forecast by 33 percent on assumptions for a stronger yen.

South Korea’s Kospi index fell 1.1 percent, the most in two weeks, as Samsung Electronics dropped 1.9 percent. Australia’s S&P/ASX 200 Index declined 1.5 percent as data showed consumer prices climbed 0.7 percent in the third quarter from the previous three months. Ardent Leisure Group plunged 15 percent after police ordered the closure of its Dreamworld theme park on the Gold Coast following an accident that killed four people. New Zealand’s S&P/NZX 50 Index fell 1.5 percent.

The Hang Seng China Enterprises Index of Chinese shares listed in Hong Kong dropped 1.4 percent, the most in almost two weeks, as inflows from mainland investors via a link with Shanghai slowed. Great Wall Motor Co. tumbled 11 percent in Hong Kong as at least three analysts cut their ratings on the stock.

The Shanghai Composite Index retreated 0.5 percent, ending three days of gains that took it to its highest level since January. The Hang Seng Index dropped 1 percent. Bank of China Ltd. is scheduled to announce third-quarter profit after the market closes, the first of the nation’s four big lenders to disclose results.

India’s S&P BSE Sensex index dropped 0.7 percent, dragged down by lenders as concern that bad debts will rise after Axis Bank Ltd. reported a five-fold increase in provisions. Singapore’s Straits Times Index fell 0.9 percent, the most in two weeks.

Fed Hike

Futures on the S&P 500 Index declined 0.4 percent. The U.S. equity benchmark lost 0.4 percent Tuesday as investors weighed earnings and data showing U.S. consumer confidence fell more than forecast in October. Traders are pricing in a 73 percent chance that the Fed will increase interest rates by the end of this year, futures data show.

“The drop in consumer confidence was quite surprising, but it’s difficult to draw a conclusion from one month of data,” said Chris Green, the Auckland-based director of economics and strategy at First NZ Capital Group Ltd. “The biggest story is that we have seen improvement in the labor market, which reinforces expectations that we would probably see a move by the Fed in December.”

West Texas Intermediate crude dropped 1 percent in Asian trading, to reach a three-week low, after industry data showed U.S. crude stockpiles expanded as Russia said it preferred freezing output at current levels rather than cutting production.

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