Asian Stocks Fluctuate on Mixed View for China, Japan Economies
March 10, 2010, 11:57 PM ESTBy Jonathan Burgos
March 11 (Bloomberg) -- Asian stocks fluctuated as commodity-related companies fell on concern China will pare back measures that boosted growth, while Japanese shares gained on speculation the country’s economy is recovering.
BHP Billiton Ltd., the world’s largest mining company, dropped 1 percent in Sydney, and Posco, South Korea’s biggest steelmaker, lost 1.3 percent in Seoul after China said inflation reached a 16-month high in February. Sony Corp. climbed 1.5 percent in Tokyo after the Nikkei newspaper said the Japanese government will boost its economic outlook.
“Accelerating inflation in China raises the possibility of an interest-rate hike,” said Terrace Chum, who helps manage about $6 billion for MFC Global Investment Management in Hong Kong. “The government wants to prevent the economy from over-heating. It may slow growth, but the recovery is on track.”
The MSCI Asia Pacific Index was little changed at 122.64 as of 1:48 p.m. in Tokyo, with about as many stocks declining as advancing. The index pared gains of almost 0.6 percent, before China reported its inflation figures. Materials companies retreated the most among the index’s 10 industry groups.
Japan’s Nikkei 225 Stock Average climbed 0.5 percent to 10,617.13, the biggest advance among major equity benchmarks in the Asia-Pacific region. Most gauges dropped, with China’s Shanghai Composite Index declining 0.6 percent.
Australian Employment
Australia’s S&P/ASX 200 Index was little changed, erasing gains of as much as 0.4 percent after a report showed the nation’s employers added fewer workers in February than economists forecast.
Futures on the Standard & Poor’s 500 Index dropped 0.4 percent. The gauge advanced 0.5 percent in New York yesterday as a drop in wholesale inventories and improvement in corporate bond markets added to signs the economy is strengthening, overshadowing concern China will raise rates.
The MSCI Asia Pacific Index has fallen about 3 percent from a 17-month high on Jan. 15 on concern governments will start withdrawing economic-stimulus policies and that Greece will struggle to curb its budget deficit. That has cut the average price of stocks in the index to 18.7 times estimated earnings from 22.5 times at the beginning of the year.
Seasonal factors stemming from a weeklong holiday may have boosted prices. Production rose 20.7 percent in the first two months of 2010, the most in more than five years.
Japanese Economy
In Japan, the government will probably upgrade its overall assessment on the nation’s economy for the first time since July, the Nikkei said today, without identifying the source of the information. The report is expected to say the economy is making a “steady recovery” as rising exports to China drove growth in production, the newspaper said.
Also today before trading began, Japan’s Cabinet Office said the economy expanded less than initially estimated in the fourth quarter, as companies pared spending and stockpiles as deflation deepened.
--Editors: Nicolas Johnson, Sam Waite.
To contact the reporters for this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net.
To contact the editor responsible for this story: Nicolas Johnson at nicojohnson@bloomberg.net.
