Bloomberg News

Asian Stocks Drop Amid Concern U.S., China Growth Slowing

August 24, 2012

Asia Stocks Drop, Erasing Weekly Gain, On Europe Crisis Concern

The MSCI Asia Pacific Index slid 0.9 percent to 120.74 as of 9:42 a.m. in Tokyo, erasing this week’s advance, before the open of markets in China and Hong Kong. Photographer: Tomohiro Ohsumi/Bloomberg

Asian stocks fell, with the region’s benchmark index retreating from the highest level since May, on signs of slower growth in the U.S. and China and amid concern Europe’s leaders aren’t making progress on the debt crisis.

Nissan Motor Co., a carmaker that counts North America as its biggest market, fell 1.5 percent in Tokyo after U.S jobless claims rose more than expected. Aluminum Corp. of China fell 2.1 percent in Hong Kong after Dallas Federal Reserve economists said overstated data may have masked the severity of China’s slowdown. Makita Corp. (6586), a Japanese maker of power tools that depends on Europe for more than 40 percent of sales, slid 1.1 percent.

The MSCI Asia Pacific (MXAP) Index slid 1.2 percent to 120.36 as of 8:21 p.m. in Tokyo, erasing this week’s advance. The gauge yesterday closed at the highest level since May 4.

“The rally seems to have been a bit more about hope over reality,” said Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State Global Asset Management, which oversees about $150 billion. “Clearly economic data has been pretty poor. The practicalities of what needs to be done to address this are huge.”

Asia’s equity benchmark climbed 12 percent from a June low through yesterday on bets monetary authorities in the U.S., Europe and China would take action to boost slowing economic growth. Stocks on the index were valued at 12.6 times estimated earnings on average, compared with 13.7 for the Standard & Poor’s 500 Index and 11.6 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Japan’s Nikkei 225 Stock Average (NKY) and South Korea’s Kospi slid 1.2 percent, while Australia’s S&P/ASX 200 Index retreated 0.8 percent.

Hong Kong’s Hang Seng Index fell 1.3 percent. The Shanghai Composite Index dropped 1 percent.

U.S. Jobs

Futures on the S&P 500 were little changed today. The gauge slid 0.8 percent yesterday, the most in a month, after a report showed the number of applications for unemployment benefits climbed last week to a one-month high. Jobless claims rose for a second week to 372,000, exceeding the 365,000 median forecast of economists surveyed by Bloomberg.

Exporters fell. Nissan slid 1.5 percent to 765 yen. Yue Yuen Industrial Holdings Ltd., which makes shoes for Nike Inc. and gets 29 percent of sales in the U.S., lost 2.6 percent to A$22.75. Makita slid 1.1 percent to 2,933 yen. Cosco Pacific Ltd., a shipping company which operates a port terminal in Greece, declined 1 percent to HK$10.40.

Europe Crisis

German Chancellor Angela Merkel said Europe is in one of its deepest crises, while the country’s finance minister, Wolfgang Schaeuble, said allowing Greece more time to meet its debt obligations would not solve the country’s problems.

China may have overstated 2012 industrial production data to conceal the economy’s weakness, Dallas Fed economists Janet Koech and Jian Wang wrote in a paper. Separately, HSBC Holdings Plc cut China’s 2012 growth forecast to 8 percent from 8.4 percent.

Bank of China Ltd., the nation’s third-largest lender by assets, slid 1.3 percent to HK$2.95 after posting the slowest quarterly profit growth in three years.

Whitehaven Coal Ltd. slumped 11 percent to A$3.09 in Sydney after a group led by billionaire shareholder Nathan Tinkler said it isn’t proceeding with a takeover offer.

Among shares that rose, China Unicom (Hong Kong) Ltd. advanced as much as 5.8 percent to HK$13.78. The nation’s second-largest mobile-phone company reported second-quarter profit beat analysts’ estimates.

To contact the reporter on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net

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


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