Bloomberg News

Asian Stocks Post Steepest Quarterly Drop Since 2008 on Economy

September 30, 2011

Sept. 30 (Bloomberg) -- Asian stocks dropped for the first time in four days, with the regional benchmark index posting its biggest quarterly decline since December 2008, as U.S. economic reports failed to soothe investor concern that growth in the world’s largest economy is faltering.

Li & Fung Ltd., a supplier of toys and clothes to Wal-Mart Stores Inc., sank 3.6 percent in Hong Kong. Panasonic Corp., the world’s largest maker of plasma televisions, slid 1.2 percent in Tokyo. Honda Motor Co., a carmaker that gets about 44 percent of sales from North America, fell 1.4 percent. Glencore International Plc, the world’s No. 1 commodities trader, tumbled 8 percent as copper futures headed for the biggest quarterly decline since 2008.

“Sentiment ebbs and flows very quickly nowadays,” said Tim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “People are still very uncertain about the macro-economic outlook at this stage and risk-off prevails until greater certainty comes to light in policy response.”

The MSCI Asia Pacific Index fell 0.8 percent to 113.20 as of 4:40 p.m. in Mumbai, after swinging between gains and losses at least six times. About five stocks fell for every four that rose in the measure, which advanced 1.3 percent this week.

The gauge lost 9.4 percent this month, extending a slump this quarter to 16 percent, the steepest drop since the three months ended December 2008. Stocks have plunged amid concern the global economy is poised for another recession as Europe’s debt crisis worsens and U.S. economic growth slows.

Nikkei, Hang Seng

Hong Kong’s Hang Seng Index dropped 2.3 percent at the close, extending the quarter’s slump to 21 percent, the worst performance since September 2001. China’s Shanghai Composite Index slid 0.3 percent.

Japan’s Nikkei 225 Stock Average, South Korea’s Kospi Index and Australia’s S&P/ASX 200 were little changed, while futures on the Standard & Poor’s 500 Index dropped 1.3 percent.

The S&P 500 rose 0.8 percent yesterday in New York after applications for jobless benefits dropped and the economy grew at a faster pace than initially estimated in the second quarter.

Reports today showed global economic growth may be slowing. German retail sales slumped in August, industrial production in Japan and South Korea grew less than economists forecast, and Chinese manufacturing shrank for a third month. Data in the U.S. is expected to show spending by American consumers slowed in last month.

Toyota, Li & Fung

Exporters declined. Li & Fung slumped 3.6 percent to HK$13.22 in Hong Kong. Panasonic, which counts the U.S. as its biggest market, dropped 1.2 percent to 754 yen. Honda fell 1.4 percent to 2,299 yen.

A gauge of raw-material producers and consumer companies was among the top three biggest industry declines in the MSCI Asia Pacific Index as copper futures lost as much as 1.8 percent, headed for the biggest quarterly drop since 2008.

Glencore tumbled 8 percent to HK$48.65. Jiangxi Copper Co., China’s largest producer of the metal, sank 4.2 percent to HK$13.80. Rio Tinto Group, a mining company by sales, slipped 1 percent to A$61.80.

Gome Electrical Appliances Holding Ltd., China’s No. 2 electronics retailer, slumped 22 percent to HK$1.83 in Hong Kong, the biggest decline on the MSCI Asia Pacific Index. Credit Suisse Group AG cut its rating on the stock to “neutral” from “outperform,” citing concerns on corporate governance.

Bribery, Insider Trading

The Beijing-based retailer said Sept. 27 it will form a venture with units associated with billionaire founder Wong Kwong Yu, who is serving a 14-year jail term on bribery and insider trading charges, to increase the number of stores in China.

The MSCI Asia Pacific Index declined about 18 percent this year through yesterday, compared with a 7.7 percent drop by the S&P 500 and a 17 percent loss by the Stoxx Europe 600 Index. Stocks in the Asian benchmark were valued at 11.6 times estimated earnings on average, compared with 11.7 times for the S&P 500 and 9.6 times for the Stoxx 600.

Global equities advanced yesterday after Germany’s lower house of parliament approved the expansion of the European bailout fund. The bill’s passage by Europe’s biggest economy allows euro-area officials to weigh further measures to bolster Greece in its sovereign-debt crisis and stem investor concern.

--With assistance from Shani Raja in Singapore and Yoshiaki Nohara and Masaaki Iwamoto in Tokyo. Editors: John McCluskey, Jason Clenfield.

To contact the reporters on this story: Jonathan Burgos in Singapore at; Anna Kitanaka in Tokyo at

To contact the editor responsible for this story: John McCluskey at

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