Bloomberg News

Asian Stocks Snap Six-Day Win Streak Ahead of U.S. Jobs Reports

September 02, 2011

Sept. 2 (Bloomberg) -- Asian stocks snapped a six-day streak of advances ahead of reports expected to show the U.S. jobless rate remained above 9 percent last month, adding to signs growth in the world’s largest economy is weakening.

Sony Corp., Japan’s biggest exporter of consumer electronics, declined 4.3 percent in Tokyo on speculation exports to the U.S. will fall. Toyota Motor Corp and Honda Motor Co. fell at least 1.6 percent after both the companies’ share of the U.S. vehicle market shrank last month. Esprit Holdings Ltd., the Hong Kong-based clothing retailer that counts Europe as its biggest market, slumped by most in two years after cutting its profit outlook.

The MSCI Asia Pacific Index dropped 1 percent to 124.22 as of 7:34 p.m. in Tokyo, paring this week’s advance to 3.2 percent. About two stocks fell for each that rose on the gauge. The measure slumped 8.6 percent last month, the most since May 2010, amid concern global economic growth is slowing as Europe’s sovereign debt crisis spreads and after Standard & Poor’s cut the U.S. credit rating.

“The U.S. recovery remains anemic, with lingering concerns over job creation and house prices,” said Tim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “Expectations are relatively low for tonight’s jobs data.”

Japan’s Nikkei 225 Stock Average decreased 1.2 percent. Australia’s S&P/ASX 200 Index slipped 1.5 percent. South Korea’s Kospi Index lost 0.7 percent. Hong Kong’s Hang Seng Index sank 1.8 percent. China’s Shanghai Composite Index fell 1.1 percent.

U.S. Futures

Futures on the Standard & Poor’s 500 Index slid 0.9 percent today. The index dropped 1.2 percent in New York yesterday, snapping a four-day advance, before a Labor Department report today that may show non-farm payrolls climbed by 68,000 in August after a 117,000 increase in July, according to the median forecast of economists surveyed by Bloomberg News. U.S. stocks rose as much as 0.9 earlier yesterday after a report showed manufacturing unexpectedly expanded.

Exporters declined on speculation shipments to the U.S., the biggest market for Asian products, will drop. Sony Corp., the maker of Bravia televisions and PlayStation game consoles, slumped 4.3 percent to 1,625 yen in Tokyo. James Hardie Industries SE, a supplier of building materials that gets 68 percent of sales from the U.S., dropped 2.1 percent to A$6.03 in Sydney. Li & Fung Ltd., a supplier of toys and clothes to Wal- Mart Stores Inc., sank 6.7 percent to HK$13.84 in Hong Kong.

Toyota Motor Corp., the world’s biggest carmaker, dropped 1.6 percent to 2,711 yen. The company’s shipments to the U.S. fell 13 percent in August from a year earlier, reducing its market share to 12.1 percent, according to a report from Autodata Corp.

U.S. Car Sales

Honda Motor Co. declined 2 percent to 2,507 yen. The carmaker’s U.S. sales fell 24 percent from a year earlier, dragging its market share to 7.7 percent. Total U.S. sales of new cars and light trucks increased to 1.07 million August from 997,467 a year earlier, the report showed.

Esprit, the biggest Hong Kong-listed clothier, tumbled 10 percent to HK$19.64, the biggest decline on the MSCI Asia Pacific Index and the shares’ steepest decline since Aug. 2009. The company said yesterday it expects to “record a significant decrease” in net income for the year ended June 30 on unspecified restructuring costs.

Of the 704 companies in the MSCI Asia Pacific Index that reported net income since July 11, 44 percent surpassed analyst estimates, while 35 fell short, according to data compiled by Bloomberg.

Target Cut

UBS AG lowered its year-end target for the MSCI Asia Pacific Index Excluding Japan Index by 13 percent, saying equities remain “broadly out of favor” amid signs global economic growth is slowing.

The MSCI Asia Pacific Index declined 8.9 percent this year through yesterday, compared with a 4.2 percent drop by the S&P 500 and a 13 percent loss by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 12.3 times estimated earnings on average, compared with 12.1 times for the S&P 500 and 9.9 times for the Stoxx 600.

Galaxy Entertainment Group Ltd., the Macau casino operator, slumped 5.3 percent to HK$17.68 in Hong Kong after Permira Advisers LLP, the London-based buyout firm that controls German clothing designer Hugo Boss AG, sold $613 million of shares in Galaxy.

Gauges of raw material and energy producers led the decline among the 10 industry groups in the MSCI Asia Pacific Index. All but two of the sub-indexes fell.

Raw Material Producers

BHP Billiton Ltd., the world’s largest mining company, dropped 2.1 percent to A$39.04 in Sydney. Rio Tinto Group, the world’s second-biggest mining company by sales, lost 1.4 percent to A$72.05. Mitsubishi Corp., the Japanese trading house that gets about 43 percent of revenue from commodities, decreased 1.1 percent to 1,829 yen in Tokyo.

The Thomson Reuters/Jefferies CRB Index of raw materials fell 0.6 percent yesterday. The London Metal Exchange Index of prices for six industrial metals including copper and aluminum dropped 1.3 percent.

--Editors: Nick Gentle, John McCluskey

To contact the reporters on 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: Nick Gentle at ngentle2@bloomberg.net


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