Asian stocks fell this week, retreating from a 20-month high, as mining companies declined after reports showed recovery in the Chinese and U.S. economies may be stalling.
BHP Billiton Ltd. (BHP), the world’s biggest miner, sank 5.9 percent in Sydney after copper and gold plunged. Celltrion Inc. tumbled 34 percent in Seoul as the South Korean maker of arthritis medicine Abatacept postponed a late-stage drug trial. Zoomlion Heavy Industry Science and Technology Co., China’s second-largest maker of construction equipment, sank 2.4 percent after forecasting a drop in profit.
The MSCI Asia Pacific Index (MXAP) slid 1.4 percent to 136.29 this week. The gauge retreated from the highest level since August 2011 after the International Monetary Fund cut its forecast for global economic growth, China’s economy expanded less than economists’ estimates and industrial production in the U.S. unexpectedly dropped.
“The Chinese economy is heading toward slower growth than what we’ve seen in the past decade, which means it’s a lot less investment-intensive with less demand for commodities,” said Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd., which manages $126 billion. “We’ve reduced our equity exposure in the short term as economic data show signs of softening. The market needs to correct at least 10 percent.”
Australia’s S&P/ASX 200 Index (AS51), which counts mining companies BHP and Rio Tinto Group among its biggest components, slipped 1.6 percent this week. Japan’s Nikkei 225 Stock Average fell 1.3 percent, snapping a three-week advance.
South Korea’s Kospi Index (KOSPI) lost 0.9 percent this week. Hong Kong’s Hang Seng Index declined 0.3 percent. China’s Shanghai Composite Index climbed 1.7 percent. Taiwan’s Taiex Index advanced 1.4 percent.
The MSCI Asia Pacific Index gained more than 5 percent this year amid signs the U.S. economy is recovering and as Japanese equities rallied on speculation the Bank of Japan will step up efforts to stimulate its economy. Shares on the gauge traded at 13.8 times estimated earnings yesterday compared with 13.9 for the Standard & Poor’s 500 Index and 12.3 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Raw-material producers and energy companies posted the biggest declines amid concern demand from China, the world’s biggest consumer of metals and fuel, will drop as economic growth slows. Copper fell to the lowest since October 2011, while gold posted its biggest daily drop since 1983 this week. Silver and crude oil slipped.
BHP sank 5.9 percent to A$31.40 in Sydney. Rio Tinto, the world’s second-largest mining company, dropped 4.5 percent to A$54.32. Newcrest Mining Ltd. (NCM), Australia’s No. 1 gold producer, tumbled 15 percent to A$16.65. Inpex Corp., Japan’s biggest energy explorer, decreased 7.6 percent to 473,000 yen in Tokyo.
Calibre Group Ltd. (CGH), which provides engineering services to mining and infrastructure companies, slumped 21 percent to A$0.395 in Sydney. The company cut its full-year net income forecast after clients delayed a number of projects on softening demand for iron ore and coal.
Celltrion tumbled 34 percent to 31,350 won in Seoul, the biggest weekly decline on the MSCI Asia Pacific Index. The company said it postponed a late-stage trial of a biosimilar version of Roche Holding AG’s best-selling Rituxan drug used in treating non-Hodgkin lymphoma patients, potentially benefiting competitors such as Boehringer Ingelheim GmbH and Novartis AG.
Zoomlion Heavy Industry (1157) fell 2.4 percent to HK$8.10 after the Chinese cranemaker forecast first-quarter profit will fall between 60 percent and 80 percent. Daphne International Holdings Ltd. slumped 15 percent to HK$8.39 after reporting a drop in sales.
“Weak corporate earnings results and renewed concerns about the global economy saw traders switch to a risk-off mode,” said Matthew Sherwood, Sydney-based head of markets research at Perpetual Investments, which manages about $25 billion.
Softbank Corp., Japan’s third-largest mobile-phone company, declined 7.4 percent to 4,365 yen in Tokyo this week. Dish Network offered $25.5 billion for control of Sprint, sparking concerns the Japanese wireless carrier may raise its own bid.
Among stocks that advanced, Taiwan Semiconductor Manufacturing Co., the world’s largest contract maker of chips, gained 6 percent to NT$106.50 after forecasting record quarterly sales and raising its spending plan amid rising smartphone demand.
Lenovo Group Ltd., the second-largest maker of personal computers, rose 6 percent to HK$7.06. The Chinese company has emerged as the most likely bidder for International Business Machines Corp.’s low-end server business, a person familiar with the matter said.
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