Bloomberg News

Asian Stocks Decline as Metal Producers, China’s Property Developers Fall

March 01, 2012

Asian stocks fell, with the region’s benchmark index headed for its first decline in three days, as commodity producers retreated on lower metal prices and Chinese developers slid after home prices declined.

BHP Billiton Ltd. (BHP), the world’s No. 1 mining company, lost 1.5 percent in Sydney, the biggest drag on the MSCI Asia Pacific Index. China Overseas Land & Investment Ltd., a state-owned builder, lost 5.5 percent in Hong Kong. Toyota Motor Corp. (7203), Asia’s biggest carmaker, slid 0.6 percent in Tokyo as the yen rose against the dollar.

“The liquidity situation isn’t that optimistic and that means the economy hasn’t bottomed out yet,” said Wang Zheng, Shanghai-based chief investment officer at Jingxi Investment Management Co., which oversees about $120 million. “These negative factors will put the rally into doubt.”

The MSCI Asia Pacific Index fell 1 percent to 127.69 as of 5:13 p.m. in Tokyo. The gauge entered a bull market yesterday, gaining more than 20 percent from an Oct. 5 low, after central banks in the U.S., Europe, China and Japan eased monetary policy, fueling the fastest rally in more than two years.

Japan’s Nikkei 225 Stock Average (NKY) slid 0.2 percent today. Australia’s S&P/ASX 200 Index fell 1 percent. South Korea’s market is shut for a holiday.

Developers Drop

Hong Kong’s Hang Seng Index (HSI) slid 1.4 percent, led by property developers. Chinese home prices fell in February the most in 19 months, according to SouFun Holdings Ltd., the operator of the nation’s largest real estate website. Shanghai on Feb. 28 reiterated that Chinese nationals not registered as residents of the city would be barred from buying more than one home.

Mainland developers accounted for six of the 10 steepest drops in the MSCI Asia Pacific Index (MXAP) today. China Overseas Land & Investment sank 5.5 percent to HK$15.36.

Country Garden Holdings Company Ltd. fell after it announcing a plan to sell shares at a discount. The developer slumped 8.8 percent to HK$3.20.

The MSCI Asia Pacific Index gained 13 percent this year through yesterday, compared with an 8.6 percent advance by the Standard & Poor’s 500 Index and an 8.1 percent increase by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 15 times estimated earnings on average, compared with 13.1 times for the S&P 500 and 11 times for the Stoxx 600.

BHP Falls

A measure of material producers had the biggest drop among the MSCI Asia Pacific Index’s 10 industry groups after the London Metal Exchange Index of prices for six industrial commodities fell 1.2 percent yesterday.

BHP fell 1.5 percent to A$35.55 in Sydney, while Rio Tinto Group, the world’s the world’s third-biggest mining company, slumped 1.8 percent to A$66.25.

Futures on the S&P 500 slid 0.2 percent today. The gauge dropped 0.5 percent in New York yesterday after Federal Reserve Chairman Ben S. Bernanke gave no indication of further stimulus measures. Stocks earlier gained as data showed the U.S. economy expanded more than forecast and business activity accelerated.

The dollar fell 0.3 percent to 80.90 yen today after rising 0.9 percent yesterday. A weaker greenback cuts the value of overseas earnings for exporters. Toyota, which gets 28 percent of its sales in North America, slid 0.6 percent to 3,335 yen.

Elpida Memory Inc. (6665), the Japanese chipmaker that filed for bankruptcy this week, finished the day unchanged at 7 yen after surging as much as 43 percent. The company filed for bankruptcy on Feb. 27 with debts of 448 billion yen ($5.5 billion), according to a filing with the finance ministry. The stock plunged 97 percent yesterday.

To contact the reporters on this story: Kana Nishizawa in Hong Kong at knishizawa5@bloomberg.net; Zhang Shidong in Shanghai at szhang5@bloomberg.net.

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


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