Most Asian stocks dropped, led by Japanese shares, as investors awaited a meeting of Europe’s finance ministers to tackle the debt crisis.
Canon Inc. (7751), a camera maker that gets about 31 percent of its sales from Europe, fell 1.4 percent in Tokyo. HTC Corp. tumbled 7 percent in Taipei after Asia’s No. 2 smartphone maker posted a record decline in quarterly profit. China’s Shanghai Composite Index (SHCOMP) rallied as mainland lenders rebounded from yesterday’s losses.
The MSCI Asia Pacific Index (MXAP) slipped 0.4 percent to 121.68 as of 7:40 p.m. in Tokyo, with five shares falling for every four that rose. The regional benchmark index gained 4 percent last month amid speculation China will follow central banks worldwide in adding stimulus to boost growth. A regional index that excludes Japan gained as much as 0.7 percent before paring its advance in the afternoon.
“What is certain is that more and more central banks are easing their monetary policy,” said David Gaud, a senior portfolio manager at Edmond de Rothschild Asset Management in Hong Kong, which oversees $18 billion. “Bonds have been an asset class mostly held by global investors, so it makes sense now to start to see some spill-over into the equity side because equity as an asset class is very cheap on a relative basis. There is a valuation case for Asia at this point.” The International Monetary Fund cut its global growth outlook today and warned of even slower expansion unless policy makers in the U.S. and Europe address threats to their economies.
Japan’s Nikkei 225 Stock Average (NKY) fell 1.1 percent as markets reopened following yesterday’s holiday. Taiwan’s Taiex Index slipped 0.4 percent. Singapore’s Straits Times Index slid 0.4 percent. South Korea’s Kospi Index lost 0.1 percent. China’s Shanghai Composite Index jumped 2 percent, while Hong Kong’s Hang Seng Index rose 0.5 percent.
Australia’s S&P/ASX 200 Index gained 0.5 percent after a survey showed business confidence recovered in September amid prospects of interest-rate cuts. The Reserve Bank of Australia trimmed its benchmark rate on Oct. 2.
Futures on the Standard & Poor’s 500 Index lost 0.1 percent today. The gauge dropped 0.4 percent in New York yesterday ahead of meeting of European leaders to discuss the region’s debt crisis. Finance ministers from all the 27 countries in the European Union will convene today in the lead up to a summit in Brussels on Oct. 18-19.
German Chancellor Angela Merkel is scheduled to visit Greece today as European finance ministers hailed the nation’s efforts to cut its budget, raising chances that aid will keep flowing to the recession-wracked country.
The world economy will expand 3.3 percent this year, the slowest pace since the 2009 recession, and 3.6 percent next year, the IMF said today. That compares with July predictions of 3.5 percent in 2012 and 3.9 percent for 2013.
Exporters dropped. Canon lost 1.4 percent to 2,425 yen in Tokyo. Sony Corp., Japan’s biggest exporter of consumer electronics, sank 3.6 percent to 914 yen.
HTC sank 7 percent to NT$267 in Taipei. The smartphone maker reported third-quarter net income dropped 79 percent from a year earlier to NT$3.9 billion ($133 million). The results missed the NT$4.43 billion average of eight analysts’ estimates compiled by Bloomberg.
Sharp Corp., a Japanese electronics maker on course to post a second straight full-year loss, slumped 15 percent to 151 yen in Tokyo, the lowest close in at least 38 years. Goldman Sachs Group Inc. cut its rating on the stock to sell from neutral, saying the company’s financial situation may continue deteriorate even if gets support from creditors.
The Asian benchmark equity gauge traded at 12.8 times estimated earnings, compared with 13.9 times for the S&P 500 and 12.1 times for the Stoxx Europe 600 Index.
Raw-material producers advanced after crude and copper futures rebounded. BHP Billiton Ltd. (BHP), the world’s No. 1 mining company and Australia’s largest oil producer, added 0.7 percent to A$33.47 in Sydney. PetroChina Co. (857), China’s biggest energy company, climbed 2.1 percent to HK$10.14 in Hong Kong.
Chinese banks were among the biggest contributors to gains of the Shanghai Composite Index today. Industrial & Commercial Bank of China Ltd., the world’s biggest lender by market value, gained 1.3 percent to 3.80 yuan in Shanghai. China Construction Bank Corp. (939), the country’s second-largest lender, rose 2 percent to 4.06 yuan.
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