Bloomberg News

Asian Stocks Decline as China Export Slowdown Weighs on Economic Optimism

March 12, 2012

Hitachi Construction Machinery Co. excavators bound for shipment sit in a lot in Yokohama City, Japan. Photographer: Tomohiro Ohsumi/Bloomberg

Hitachi Construction Machinery Co. excavators bound for shipment sit in a lot in Yokohama City, Japan. Photographer: Tomohiro Ohsumi/Bloomberg

Asian stocks fell, with the benchmark index headed for its first loss in three days, as Chinese exports grew at a slower pace than economists forecast, overshadowing a rebound in Japan’s machinery orders and better- than-expected U.S. jobs data.

Li & Fung Ltd., which exports toys and clothes to Wal-Mart Stores Inc., fell 1.5 percent in Hong Kong. Samsung Electronics Co. (005930) slid 1.6 percent in Seoul after Apple Inc. claimed the smartphone maker violated a court order in a patent-infringement case. Train and rail builders plunged in Hong Kong after a report a high-speed track collapsed on the mainland.

“China’s government needs to do something to beef up the economy,” said Alex Au, Hong Kong-based managing director of Richland Capital Management Ltd., which oversees $300 million. “The worry about a global economic slowdown is not as bad as before, as data from the U.S. is showing signs of improvement.”

The MSCI Asia Pacific Index fell 0.6 percent to 126.19 as of 7:46 p.m. in Tokyo, with almost twice as many stocks falling as climbing. All but one of 10 industry groups in the measure dropped.

Japan’s Nikkei 225 Stock Average (NKY) slid 0.4 percent as the yen strengthened from a 10-month low against the dollar, damping the earnings outlook for exporters. The gauge earlier rose as much as 0.9 percent after a report showed the nation’s machinery orders rebounded in January, signaling company investment may help drive a return to growth.

Rail Collapse

Hong Kong’s Hang Seng Index rose 0.2 percent. The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, slid 0.2 percent.

China posted its largest trade deficit since at least 1989 last month as Europe’s sovereign-debt turmoil damped exports and imports rebounded after the week-long Lunar New Year holiday. The shortfall was $31.5 billion, the customs bureau said on March 10.

Li & Fung dropped 1.5 percent to HK$17.50. China Merchants Holdings International Co. (144), which operates ports in China and abroad, retreated 0.9 percent to HK$26.55. Foxconn International Holdings Ltd., a contract maker of mobile telephones, slipped 3.6 percent to HK$5.59.

China’s retail sales rose 14.7 percent in January and February from a year earlier, the National Bureau of Statistics said on March 9, missing the median estimate for a 17.6 percent gain in a Bloomberg News survey of economists.

Australia, Korea

Australia’s S&P/ASX 200 Index slipped 0.4 percent, while South Korea’s Kospi Index dropped 0.8 percent.

Samsung Electronics declined 1.6 percent to 1.21 million won in Seoul, the biggest drag on the MSCI Asia Pacific Index. Samsung “only partially complied with” a court order requiring the company to produce source code for products, according to a filing in the Federal Court in San Jose, California.

Samsung, the world’s largest maker of mobile phones, and Apple have filed at least 30 suits on four continents against each other since April.

Futures on the Standard & Poor’s 500 Index were little changed after falling as much as 0.4 percent today. The gauge rose 0.4 percent in New York on March 9 after a 227,000-worker increase in payrolls last month topped the median projection of economists in a Bloomberg News survey. The jobless rate held at 8.3 percent.

James Hardie

James Hardie Industries SE (JHX), an Australian supplier of building materials that gets more than half of sales from the U.S., climbed 0.3 percent to A$7.53 in Sydney.

The MSCI Asia Pacific Index gained 11 percent this year through last week as the U.S. economy showed signs of recovery and China began to ease its monetary policy. The gain compares with a 9 percent advance by the S&P 500 and an 8.6 percent increase by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 14.8 times estimated earnings on average, compared with 13.1 times for the S&P 500 and 11 times for the Stoxx 600.

Two of the four steepest drops in the MSCI Asia Pacific Index were railway-related shares. China Railway Construction Corp., a builder of the nation’s rail system, slumped 7.3 percent to HK$5.31 in Hong Kong, while China Railway Group Ltd. (601390) fell 5.4 percent to HK$2.83. CSR Corp., the mainland’s biggest train maker, dropped 4.1 percent to HK$5.42.

A 300-meter (1,000-foot) section of an unopened high-speed railway collapsed in central China’s Hubei province following heavy rain, Xinhua News said, citing local authorities. Hundreds of workers have been sent to make repairs following the March 9 failure in Qianjiang city, the report said.

To contact the reporter on this story: Kana Nishizawa in Hong Kong at knishizawa5@bloomberg.net

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


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