Bloomberg News

Asia Stocks Fall as Jobs, China Data Spark Growth Concern

May 03, 2012

LG Display Co. Ltd. sank 3.4 percent in Seoul. Photographer: Phelan M. Ebenhack/Bloomberg

LG Display Co. Ltd. sank 3.4 percent in Seoul. Photographer: Phelan M. Ebenhack/Bloomberg

Asian stocks fell, with a regional index dropping for the first time in eight days, as growth in China’s services industries slowed and employment reports from Europe to the U.S. and New Zealand fueled concern the global economy is faltering.

Esprit Holdings Ltd., a clothier that counts Europe as its biggest market, slid 4.3 percent. LG Display (034220) Co. sank 6.6 percent in Seoul after reports the offices of the world’s No. 2 maker of liquid-crystal displays were searched in a probe of whether it illegally obtained a rival’s technology. China Construction Bank Corp. and Bank of China Ltd. dropped in Hong Kong after Temasek Holdings Pte. sold $2.48 billion of Chinese lenders’ shares at a discount.

“Europe will continue to remain the risk for global equity investors,” said Diane Lin, a fund manager who helps manage $1 billion in equities at Pengana Capital Ltd. in Sydney. “The next big issue will be the slowing economic growth and how it affects the underlying stability” for earnings growth in Asia.

The MSCI Asia Pacific Excluding Japan Index (MXAPJ) dropped 0.3 percent to 442.90 as of 4:10 p.m. in Hong Kong, with about three shares falling for every two that rose. The regional gauge has risen more than 2 percent in the past seven days following moves to stimulate economic growth in Australia and amid signs manufacturing output in U.S. and China is improving.

New Zealand’s NZX 50 Index (NZSE50FG) slipped 1.1 percent after a report showed the nation’s unemployment rate rose to the highest level since 2010. South Korea’s Kospi Index fell 0.2 percent and Hong Kong’s Hang Seng Index dropped 0.3 percent. Australia’s S&P/ASX 200 Index dropped 0.2 changed. Japanese markets are closed today and tomorrow for a holiday.

Exporters Drop

China’s Shanghai Composite Index (SHCOMP) added 0.1 percent on speculation the government will take steps to avoid a deeper economic slowdown. The nation’s non-manufacturing purchasing managers’ index dropped to 56.1 in April from 58 in March, according to a survey released today by the National Bureau of Statistics and Federation of Logistics and Purchasing. A reading above 50 signals an expansion.

Exporters declined as the New Zealand jobs data, combined with reports showing Europe’s unemployment rate climbed to a 15- year high and American companies hired fewer workers than expected in April, sparked concern demand may drop.

Esprit dropped 4.3 percent to HK$15.68 in Hong Kong. Yue Yuen Industrial Holdings Ltd., a maker of shoes for Nike Inc., slipped 1.3 percent to HK$26.65. Fisher & Paykel Appliances Holdings Ltd. (FPA), a maker of refrigerators that gets about 30 percent of sales from North America and Europe, fell 7.1 percent to 52 New Zealand cents in Wellington.

LG Display Investigation

LG Display sank 6.6 percent to 23,500 won in Seoul. Prosecutors checked the company’s headquarters on April 26 to determine if it illegally obtained television technologies from Samsung Mobile Display Co., media including Korea Economic Daily, Asia Economy Daily and Edaily reported today. Claire Ohm, an LG Display spokeswoman, declined to comment. An e-mail to the prosecutors’ office wasn’t immediately answered.

HTC Corp. (2498), Asia’s second-largest smartphone maker, fell 4.3 percent to NT$452 in Taipei after Nokia Oyj said it filed patent-infringement lawsuits against HTC, Research in Motion Ltd. and ViewSonic Corp. in the U.S. and Germany.

China Construction Bank (939) slid 3.1 percent to HK$5.97 in Hong Kong. Bank of China fell 3.1 percent to HK$3.16. Temasek, Singapore’s state-owned investment company, sold $2.48 billion in shares of the two lenders at a discount of as much as 4 percent, according to a term sheet obtained by Bloomberg News.

Europe Unemployment

Futures on the Standard & Poor’s 500 Index added 0.1 percent today. The gauge slid 0.3 percent in New York yesterday after a private survey showed U.S. companies added 119,000 workers in April, the fewest in seven months.

In Europe, the jobless rate rose to a 15-year high of 10.9 percent in March, manufacturing contracted last month and unemployment in Germany unexpectedly increased, reports showed.

The MSCI Asia Pacific Excluding Japan Index rose 13 percent this year through yesterday, compared with an 11.5 percent gain by the S&P 500 and a 5.3 percent advance by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 12.7 times estimated earnings on average, compared with a multiple of 13.3 for the S&P 500 and 10.7 times for the Stoxx 600.

Harvey Norman Holdings Ltd. decreased 1.5 percent to A$2.04 in Sydney after Australia’s largest electrical-goods retailer said earnings slumped 25 percent.

Among stocks that rose, Westpac Banking Corp. gained 1 percent to A$22.91 after Australia’s second-biggest lender said first-half profit increased 1 percent from a year earlier to A$3.20 billion ($3.3 billion), matching analysts’ estimates.

To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Adam Haigh in Sydney at ahaigh1@bloomberg.net

To contact the editor responsible for this story: John McCluskey at j.mccluskey@bloomberg.net


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