Bloomberg News

Asian Stocks Swing Between Gains, Losses on China, Oil Over $100

November 17, 2011

Nov. 17 (Bloomberg) -- Asian stocks swung between gains and losses after China’s central bank said it’s not ready to ease inflation controls and energy companies rose after oil traded above $100 a barrel.

China Resources Land Ltd., a state-owned developer, dropped 5 percent in Hong Kong after the People’s Bank of China said prices haven’t stabilized enough to loosen monetary policy. Standard Chartered Plc, a the U.K.’s No. 2 lender by market value, led lenders lower as Fitch Ratings said Europe’s debt crisis poses a “serious risk” to U.S. banks. TDK Corp. soared 7.9 percent after its magnetic unit has entered an agreement to supply drive heads to Western Digital Technologies, a unit of Western Digital Corp.

The MSCI Asia Pacific Index was little changed at 116.21 at 2:27 p.m. in Tokyo after swinging between a loss of 0.8 percent and a gain of less than 0.1 percent. Five out of 10 industry groups on the index fell. The index has lost 2.3 percent since Nov. 14.

“This is a bad case for Europe and growth forecasters who were optimistic are definitely cutting back,” said Matt Riordan, who helps manage close to $6.4 billion in Sydney at Paradice Investment Management Pty. “We are going into quite a difficult point where some sort of a new strategy might be required.”

Futures on the Standard & Poor’s 500 Index advanced 0.4 percent today. The index dropped 1.7 percent in New York yesterday after Fitch said further turmoil in Greece, Ireland, Italy, Portugal and Spain poses a “serious risk” to U.S. lenders. The risks are currently manageable, the ratings company said.

Stocks also fell after Bank of England Governor Mervyn King said Britain faces a “markedly weaker” economic outlook.

Nikkei, Hang Seng

Japan’s Nikkei 225 Stock Average rose 0.2 percent, reversing an earlier decline of as much as 0.7 percent. Australia’s S&P/ASX 200 added 0.4 percent, while South Korea’s Kospi Index rose 0.8 percent.

Hong Kong’s Hang Seng Index dropped 0.8 percent after China’s central bank said it can’t loosen control over prices and reiterated Premier Wen Jiabao’s pledge to “fine-tune” policies when needed.

Banks dropped. Standard Chartered fell 3.4 percent to HK$160.80. HSBC Holdings Plc, Europe’s biggest bank, fell 0.6 percent to HK$60.40. National Australia Bank Ltd., the country’s No. 4 lender by market value, dropped 1.1 percent to A$24.33.

‘Revisit Lows’

“The problem really resides with the European banking sector,” said Khiem Do, Hong Kong Kong-based head of multi- asset strategy at Baring Asset Management Ltd., which oversees about $49 billion. “Something has to happen in terms of the policy regarding the sovereign-debt issue in Europe, otherwise I’m afraid equity market indices might revisit their lows.”

Exporters related to Europe fell. Esprit Holdings Ltd., a clothier that gets most of its revenue from the region, dropped 4.5 percent to HK$9.18. Nissan Motor Co., the Japanese carmaker that gets 15 percent of sales from Europe, fell 1.3 percent to 688 yen.

TDK jumped 7.9 percent to 3,505 yen as TDK’s SAE Magnetics Unit has entered an agreement to supply drive heads to Western Digital Technologies, a unit of Western Digital Corp., according to a filing.

The MSCI Asia Pacific Index declined 16 percent this year through yesterday, compared with a 1.7 percent drop by the S&P 500 and a 14 percent loss by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 12.6 times estimated earnings on average, compared with 12.5 times for the S&P 500 and 10.3 times for the Stoxx 600.

Energy companies rose after crude traded above $100 a barrel. Crude for December delivery slid as much as 97 cents to $101.62 a barrel in electronic trading on the New York Mercantile Exchange.

BHP Billiton Ltd., an Australian miner and oil producer, rose 1.1 percent to A$37.04. Inpex Corp., Japan’s No. 1 energy explorer, advanced 3 percent to 501,000 yen.

--With assistance from Lynn Thomasson in Hong Kong. Editors: Jason Clenfield, Nick Gentle

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net


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