Asian Stocks Drop on U.S. Housing Data, China Slowdown Concern
February 23, 2012, 8:19 PM ESTBy Jonathan Burgos
Feb. 23 (Bloomberg) -- Asian stocks declined as sales of previously owned homes in the U.S. trailed estimates and on speculation China’s Premier Wen Jiabao will set a lower target for economic growth this year.
Samsung Electronics Co., Asia’s biggest exporter of consumer electronics, dropped 3.1 percent in Seoul, leading technology stocks lower after Hewlett-Packard Co. forecast second-quarter profit that missed estimates. Datang International Power Generation Co., a mainland power generator, slid 2.4 percent in Hong Kong. Mazda Motor Corp. sank 6.8 percent after Japan’s least profitable major carmaker announced plans to raise as much as 232.8 billion yen ($2.9 billion) by selling shares and borrowing from banks.
The MSCI Asia Pacific Index fell 0.1 percent to 127.63 as of 3:53 p.m. in Tokyo. The gauge has rallied in the past nine weeks, extending its longest streak of advance since December 2005, on signs the U.S. economy is improving, bets China will ease monetary policy and optimism Europe will contain its sovereign-debt crisis. Shares on the index trade at 14.7 times estimated earnings, up from 12.6 times on Dec. 16, when the rally began.
“We’re seeing a bit of profit-taking as investors are looking for what’s the next catalysts,” said Angus Gluskie, who oversees about $350 million as managing director at White Funds Management in Sydney. “Investors are very skeptical about whether a recovery can proceed without another hurdle jumping up again. The austerity measures running through Europe are likely to take the edge off growth.”
Japan Small Caps
Japan’s Nikkei 225 Stock Average rose 0.4 percent after swinging between gains and losses. A gauge of smaller companies listed on the Tokyo Stock Exchange rose for a 28th straight day, its longest streak of gains since 1961. NIS Group Co., a consumer and business loan company, rose the most in the measure of companies on Tokyo Stock Exchange’s so-called second section, advancing 50 percent to 6 yen.
South Korea’s Kospi Index dropped 1 percent and Australia’s S&P/ASX 200 Index slipped 0.2 percent.
China’s Shanghai Composite Index rose 0.1 percent. Hong Kong’s Hang Seng Index fell 0.7 percent as property and financial stocks declined.
Futures on the Standard & Poor’s 500 Index slipped 0.1 percent today. The index dropped 0.3 percent in New York yesterday as purchases of previously-owned homes rose to a 4.57 million annual rate, less than forecast, a report from the National Association of Realtors showed.
Samsung Electronics slumped 3.1 percent to 1,160,000 won in Seoul. Hewlett-Packard forecast fiscal second-quarter profit yesterday that fell short of analysts’ estimates as consumers curtail personal-computer purchases.
Of 490 companies in the Asia-Pacific gauge that have reported net income since Jan. 9, more than half have fallen short of analysts’ estimates and profit has dropped 58 percent on average, according to data compiled by Bloomberg. That compares with the U.S., where net income has grown an average of 4.7 percent for 414 Standard & Poor’s 500 Index companies that have reported.
China’s Wen will target an expansion of less than 8 percent in his report to the National People’s Congress in Beijing on March 5, the equivalent of the U.S. President’s State of the Union address, according to 8 of 15 economists surveyed by Bloomberg News. The median estimate of 7.5 percent compares with the 8 percent goal maintained from 2005 to 2011, even amid the 2008-09 world recession.
Datang International Power slid 2.4 percent to HK$2.84 in Hong Kong, while Anhui Conch Cement Co., China’s biggest producer of the material, slid 2 percent to HK$27.45.
Mazda fell 6.8 percent to 137 yen in Tokyo. The company said it plans to raise shares and take out a loan after forecasting its biggest annual loss in 11 years.
Neptune Orient Lines Ltd., a shipping vessels operator, slumped 6.7 percent to S$1.33 in Singapore after reporting a loss of $320.4 million for the quarter ended Dec. 30. It was expected to make a loss of $123.6 million in the period based on the average of eight analysts’ estimates compiled by Bloomberg.
Among stocks that rose, OneSteel Ltd., an Australian steelmaker, surged 21 percent to A$1.15 in Sydney, its steepest gain on record. The company surged 58 percent in three days after saying it’s switching focus to iron ore away from its loss-making steel unit.
--With assistance from Kana Nishizawa in Hong Kong. Editors: Nick Gentle, John McCluskey
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
