Asian Stocks Pare Best Run Since ’05 as Europe Delays Greek Aid
February 11, 2012, 10:19 PM ESTBy Jonathan Burgos
Feb. 10 (Bloomberg) -- Asian stocks fell, paring the regional index’s longest streak of weekly gains since 2005, as European leaders held back aid for debt-laden Greece pending a parliamentary vote on an austerity plan and as companies cut earnings forecasts.
Samsung Electronics Co., a South Korean consumer electronics maker that gets a fifth of sales from Europe, slid 2 percent. AOC Holdings Inc., a Japanese oil and gas explorer, tumbled 11 percent in Tokyo after cutting its full-year net income forecast by 55 percent. Rio Tinto Group, the world’s third-biggest mining company, dropped 2.3 percent in Sydney after posting a second-half loss.
“Greece reached some sort of agreement, but it’s still up for negotiation whether the rest of the European authorities will accept that agreement,” said Stephen Halmarick, Sydney- based head of investment markets research at Colonial First State Global Asset Management, which oversees about $150 billion. “It was a positive step last night, but only a small one and there’s a long way to go.”
The MSCI Asia Pacific Index slipped 1.1 percent to 125.20 as of 12:42 p.m. in Tokyo, with about five shares falling for every three that rose. The gauge is heading for its eighth consecutive week of advance, the longest winning streak since December 2005, on improving U.S. economic data, efforts to contain Europe’s sovereign-debt crisis and signs China will act to support growth.
Yearly Gain
The benchmark Asian index gained 11 percent this year through yesterday, compared with a 7.5 percent advance by the S&P 500 and a 7.8 percent increase by the Stoxx Europe 600 Index. Stocks in the Asian benchmark were valued at 14.1 times estimated earnings on average, compared with 12.9 times for the S&P 500 and 10.9 times for the Stoxx 600. More than half of the 334 companies on the MSCI Asia Pacific Index that reported earnings since Jan. 9 missed estimates, according to data compiled by Bloomberg.
The Nikkei 225 Stock Average lost 0.4 percent, erasing gains of as much as 0.2 percent, while South Korea’s Kospi Index declined 1.3 percent. Hong Kong’s Hang Seng Index fell 0.7 percent.
Australia’s S&P/ASX 200 Index slid 0.6 percent as the Reserve Bank of Australia lowered its forecasts for economic growth and inflation this year.
China’s Shanghai Composite Index gained 0.4 percent, erasing losses of as much as of 0.4 percent, after the nation’s exports fell less than analysts’ estimated in January.
Futures on the Standard & Poor’s 500 Index fell 0.4 percent today. The index rose 0.2 percent in New York yesterday after Greece’s government said it had reached a agreement on austerity measures required for a 130 billion-euro ($173 billion) financing package.
Austerity Plan
Companies that get revenue from Europe declined after Luxembourg Prime Minister Jean-Claude Juncker said there will be “no disbursement without implementation” of the Greek austerity measures. Greece faces a 14.5 billion-euro bond payment on March 20 and is struggling to secure financing to avoid a default that could spark a new round of contagion in the euro area.
Samsung Electronics fell 2 percent to 1.062 million won. Nintendo Co., a maker of video-game consoles that gets about one-third of sales from Europe, slipped 1.6 percent to 10,750 yen in Tokyo. Canon Inc., the world’s biggest camera maker that counts Europe as its biggest market, lost 1.2 percent to 3,420 yen.
AOC Holdings plunged 11 percent to 492 yen. The company cut its full-year net-income forecast by 55 percent to 1.3 billion yen ($17 million), citing foreign-exchange losses and falling prices.
Rio Tinto, Newcrest
Rio Tinto fell 2.3 percent to A$69.95 in Sydney. The company swung to a second-half loss, its first in four years, after taking an $8.9 billion one-time charge on the value of its aluminum business.
Among stocks that advanced, Newcrest Mining Ltd. rose 2.8 percent to A$34.36 after Australia’s largest gold producer said first-half net income rose 50 percent from a year earlier to a record of A$659 million ($711 million).
Shipping companies rallied after carriers announced plans to raise Asia-U.S. cargo rates for the second time this year. Members of the Transpacific Stabilization Agreement yesterday said they would seek a $300 increase per 40-foot box next month after “successfully” pushing through a boost in January.
Hanjin Shipping Co., South Korea’s largest shipping line, climbed 4.8 percent to 17,650 won in Seoul. China Shipping Container Lines Co., the country’s second-biggest cargo carrier, advanced 1.2 percent to HK$2.46 in Hong Kong.
--With assistance from Yoshiaki Nohara in Tokyo. Editors: John McCluskey, Nick Gentle
To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net
