Asian Stocks Head for Monthly Slide as Crude Weighs on Producers

  • Regional equities index posts biggest monthly loss since May
  • ABC/Washington Post poll shows Clinton’s advantage decreasing

Asian stocks were poised for the worst monthly drop since May as declines in oil prices dragged energy shares lower and investor anxiety grew over next week’s U.S. presidential election.

The MSCI Asia Pacific Index has fallen 0.4 percent in October, set to halt three months of advances. Most stocks retreated on Monday even as the dollar-denominated measure added 0.3 percent as of 4:10 p.m. in Hong Kong. Japan’s Topix reversed losses in the final minutes of trading, while Asian energy shares sank after the world’s biggest crude producers failed to agree on supply cuts. Some polls showed Hilary Clinton’s lead over Donald Trump narrowed after the FBI said it’s reopening an investigation into her use of e-mails.

Asian equities are on course to end the longest stretch of monthly advances in 18 months as mixed corporate earnings and the increasing chance of a U.S. interest-rate increase, against the backdrop of the U.S. race for the White House, kept an equities rally in check after the index climbed to a 2016 peak last month.

“Markets continue to assume a Clinton victory, but are likely to be wary of pushing prices too much higher until there is greater clarity on whether there is any substance to the FBI e-mail investigation, or if it is having any material impact on polls,” said Ric Spooner, chief market analyst at CMC Markets Asia Pacific Pty. in Sydney.

S&P 500 Index futures climbed 0.2 percent, reversing earlier losses. Japan’s Topix, which spent most of the day in negative territory, closed higher as marine transport stocks led gains after three shipping giants agreed to merge their container businesses.

Hong Kong’s Hang Seng Index slipped 0.1 percent, reversing from an earlier gain of 0.5 percent. The Hang Seng China Enterprises Index of mainland firms listed in the city added 0.5 percent. New Zealand’s S&P/NZX 50 Index rose 0.3 percent and Australia’s S&P/ASX 200 Index advanced 0.6 percent. South Korea’s Kospi index fell 0.6 percent as investors weighed the impact of an influence-peddling scandal engulfing President Park Geun-hye. Singapore’s Straits Times Index was little changed. Markets in India and the Philippines are closed Monday.

Hitachi Ltd. surged 5.1 percent in Tokyo after earnings at the manufacturer of industrial machinery and consumer electronics topped estimates. Results from more than 233 companies on Japan’s Topix index are due Monday, including Honda Motor Co., Panasonic Corp., Fanuc Corp. and Murata Manufacturing Co. A weaker yen has fanned bets exporters’ profits may not be as bad as previously expected for the year. Mitsubishi Heavy Industries Ltd. sank 3.5 percent after cutting its profit forecast citing a stronger currency.

AIA Group Ltd. shares slumped 4.8 percent after China UnionPay Co. halted credit and debt card payments for most insurance policies in Hong Kong, as regulators cracked down on capital outflows from China.

U.S. shares fell in the final hour of trading on Friday as news broke that the FBI had reopened its investigation into Clinton’s use of an unauthorized e-mail server, an issue that has dogged her campaign. An ABC/Washington Post tracking survey Sunday gave Clinton 46 percent support from likely voters, to Trump’s 45 percent. Clinton was ahead by 12 points a week ago.

Japan’s industrial production was unchanged in September from a month earlier, falling short of forecasts, before the Bank of Japan board updates on monetary policy on Tuesday. Retails sales were also unchanged, reflecting sustained weakness in consumer spending.

While the ABC/Washington Post showed Clinton’s advantage waned, other data suggest Democrats in key states are unmoved, a sign Clinton is holding together a coalition that has kept her in the lead for months. A CBS/YouGov survey of likely voters across 13 battleground states showed that 1 percent of her supporters were less likely to vote for her after the FBI disclosure.

“The race remains very tight and markets are far too complacent about the end result,” said Matthew Sherwood, head of investment strategy in Sydney at Perpetual Ltd., which manages about $21 billion. “If the polls tighten more, or the FBI investigation dominates the headlines, there could be a recalibration in market prices this week.”

Energy producers declined after OPEC failed to finalize a proposal to implement supply cuts. Crude sank 0.3 percent, extending Friday’s 2.1 percent slide.

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