Asia Stocks Fall for First Time in Three Days on U.S. Concern
February 23, 2010, 11:37 PM ESTBy Jonathan Burgos and Shani Raja
Feb. 24 (Bloomberg) -- Asian stocks declined for the first time in three days, led by materials companies and carmakers, after a drop in U.S. consumer confidence to a 10-month low spurred concern that the economic recovery will slow.
BHP Billiton Ltd., the world’s largest mining company, fell 2.6 percent in Sydney on speculation a slowdown will dent demand for metals. Canon Inc., a camera maker that gets 79 percent of sales outside Japan, sank 2.9 percent in Tokyo, leading Japanese exporters lower after the dollar weakened against the yen. Hyundai Motor Co., South Korea’s biggest carmaker, declined 3 percent after the company announced a recall.
“The U.S. consumer confidence report has again created nervousness about the fragility of the recovery and its sustainability,” said Nader Naeimi, an investment strategist in Sydney at AMP Capital Investors, which oversees about $90 billion globally. “Nevertheless, the fundamentals remain strong and we are still seeing good earnings coming through.”
The MSCI Asia Pacific Index fell 1.2 percent to 117.50 at 1:24 p.m. in Tokyo, snapping a 3.2 percent gain in the past two days. About three stocks retreated for each that rose. The gauge has lost 7.3 percent from a 17-month high on Jan. 15 on concern governments will start withdrawing stimulus measures, and that Greece, Spain and Portugal will struggle to curb deficits.
Japan’s Nikkei 225 Stock Average dropped 1.6 percent to 10,163.28, the biggest decline among benchmarks in the Asia- Pacific region, even after a report showed exports climbed in January at the fastest pace in almost 30 years.
Australia’s S&P/ASX 200 Index fell 1.5 percent in Sydney. South Korea’s Kospi Index slipped 0.8 percent. China’s Shanghai Composite Index gained 0.6 percent.
Economy, Confidence
Hong Kong’s Hang Seng Index lost 0.6 percent, paring losses of as much as 1.3 percent, after a report showed the economy expanded faster than economists estimated in the fourth quarter.
Futures on the Standard & Poor’s 500 Index rose 0.1 percent. The measure retreated 1.2 percent in New York yesterday after the Conference Board’s confidence index for February decreased to the lowest level since April 2009, a report from the New York-based private research group showed.
“If people don’t spend, there will be a setback in the economic recovery, and that’s a concern,” said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co., which oversees the equivalent of $5.6 billion in Tokyo.
Commodity Stocks Drop
Material producers sank the most among the MSCI Asia Pacific Index’s 10 industry groups, all of which dropped. BHP fell 2.6 percent to A$41.01 and was the biggest drag on the gauge. Rio Tinto Group, the world’s No. 3 mining company, lost 2.8 percent to A$70.21.
Mitsubishi Corp., a trading company that gets about 40 percent of sales from commodities, declined 1.8 percent to 2,222 yen in Tokyo. Jiangxi Copper Co., China’s biggest producer of the metal, dipped 1.5 percent to HK$16.02 in Hong Kong.
Crude oil for April delivery lost 1.8 percent in New York yesterday, the steepest decline in two weeks. The London Metal Exchange Index of six metals, including copper and zinc, dropped for a second day yesterday, slipping 2.3 percent.
Compal Communications Inc., a handset maker, slid 5.5 percent to NT$33.30 in Taipei, the third-biggest decline on the MSCI index. Rising competition may hurt sales of its customer Palm Inc., said Chialin Lu, an analyst at Macquarie Group Ltd.
Dollar-Yen
Exporters in Japan declined as the dollar weakened to as low as 89.92 yen in Tokyo from 91.08 at the 3 p.m. close of stock trading yesterday. Japanese companies consider an average level of 92.90 as the dividing line between losses and profits, the Cabinet Office said on Feb. 19.
Canon, the world’s largest camera maker, dropped 2.9 percent to 3,710 yen. Sony Corp., an electronics maker that receives 23 percent of sales from the U.S., lost 2.8 percent to 3,095 yen.
Nissan Motor Co., Japan’s No. 3 carmaker and which gets 35 percent of revenue in North America, slid 2.4 percent to 727 yen. Citigroup Inc. cut its share-price estimate to 970 yen from 1,020 yen.
Japan’s exports advanced 40.9 percent from a year earlier, the biggest gain since February 1980, the Finance Ministry said today in Tokyo. The gain was partly due to a favorable year-on- year comparison. In January 2009, shipments abroad tumbled 45.7 percent as global trade froze in the aftermath of the collapse of Lehman Brothers Holdings Inc. in the previous September.
Post-Lehman Performance
The MSCI Asia Pacific Index has risen 2.4 percent since Lehman filed for bankruptcy protection, compared with declines of 12 percent for the Dow Jones Stoxx 600 Index in Europe and 13 percent for the Standard & Poor’s 500 Index in the U.S. Companies in the Asian gauge are priced at 18.1 times estimated earnings on average, versus 12.3 times for the Stoxx 600 and 14 times for the S&P 500.
Hyundai Motor fell 3 percent to 113,500 won. The company said it will recall 2011 Sonata sedans in the U.S. because of a problem with front-door locks.
Toyota Motor Corp., in the midst of its worst recall crisis, dropped 1.4 percent to 3,280 yen. Recalls to fix accelerator pedals and replace floor mats will “not totally” mitigate sudden acceleration in Toyota vehicles, linked to 34 deaths, Jim Lentz, president of Toyota’s U.S. sales unit, told a House Energy and Commerce panel yesterday in Washington.
Showa Shell Sekiyu K.K. decreased 9.2 percent to 634 yen, the biggest decline on the MSCI Asia Pacific Index. The Japanese oil refiner said it plans to cut its full-year dividend and UBS AG downgraded the stock to “sell” from “buy.”
--With assistance from Kana Nishizawa and Kotaro Tsunetomi in Tokyo. Editors: Nicolas Johnson, Darren Boey.
To contact the reporters for this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Shani Raja in Sydney at sraja4@bloomberg.net.
To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net.
