Bloomberg News

Asian Stocks Fall as Fisher Says Fed Should Resume Normal Policy

November 04, 2013

Asian stocks fell after Federal Reserve Bank of Dallas President Richard Fisher said the U.S. central bank should end its record stimulus as soon as possible.

South Korean financial companies including Shinhan Financial Group Co., Mirae Asset Securities Co. and Hana Financial Group Inc. dropped more than 3 percent. Coca-Cola Amatil Ltd. (CCL), Australia’s largest listed drinks company, slumped 4.7 percent after forecasting 2013 earnings will decline. MStar Semiconductor Inc., an electronics component maker, gained 7 percent to close at a record in Taipei.

The MSCI Asia Pacific excluding Japan Index fell 0.3 percent to 478.22 as of 4:10 p.m. in Hong Kong, after rising as much as 0.2 percent. About twice as many stocks declined as gained on the index. Japanese markets are closed today.

“It’s all about the Fisher speech,” Chris Weston, chief market strategist at brokerage IG Ltd. in Melbourne, said by phone. “We’re starting to see a slight change in rhetoric from the Fed, more and more people are highlighting the cost of quantitative easing. The Fed rhetoric in the last few weeks has certainly been more hawkish than the markets were expecting.”

Fisher, speaking in Sydney, said: “At the earliest possible moment we need to focus on transitioning back to having an interest-rate-driven monetary policy.”

Last week’s advance on the MSCI Asia Pacific excluding Japan Index pushed valuations on the measure to 13.2 times estimated earnings, up from a multiple of 12.2 at the end of August, according to data compiled by Bloomberg.

China Manufacturing

Australia’s S&P/ASX 200 Index (AS51) slipped 0.4 percent. Singapore’s Straits Times Index was little changed and Taiwan’s Taiex Index retreated 0.4 percent. Hong Kong’s Hang Seng Index (HSI) slipped 0.3 percent after rising as much as 0.4 percent and China’s Shanghai Composite Index was little changed.

China’s Communist Party leaders will enter a policy-making summit this week, with services and manufacturing surveys showing the economy is strengthening.

A non-manufacturing Purchasing Managers’ Index rose to the highest level this year in October, a government report showed yesterday. The increase follows faster-than-estimated growth in two manufacturing indexes last week.

New Zealand’s NZX 50 Index fell 0.1 percent. South Korea’s Kospi index dropped 0.7 percent.

“The Kospi is being driven down by foreigners who are net selling South Korean stocks after the opening of the market today,” Heo Pil Seok, chief executive officer at Midas International Asset Management Ltd., which oversees about $6.4 billion, said by phone in Seoul today. “The lower-than-estimated third-quarter profits at Korean companies is impacting the market.”

Woori Profit

South Korean financial companies declined after Woori Finance Holdings Co., the nation’s largest financial group by assets, reported earnings that missed estimates.

Woori’s third-quarter profit dropped 84 percent from a year earlier to 86.4 billion won ($81 million), the company reported on Nov. 1 after the market closed, missing the 315.5 billion-won average estimate of 21 analysts surveyed by Bloomberg. Woori shares fell 1.2 percent to 12,200 won.

Shinhan Financial dropped 3.5 percent to 45,150 won. Hana Financial declined 3.1 percent to 39,200 won, while Mirae Asset slumped 4.2 percent to 33,900 won.

Futures on the Standard & Poor’s 500 Index gained 0.2 percent today. The equities benchmark rose 0.1 percent last week after completing its second straight monthly gain, adding 4.5 percent in October. Of the index members that have reported earnings this season, 75 percent have posted higher profit than analysts estimated, data compiled by Bloomberg show.

Coca-Cola Amatil

Coca-Cola Amatil lost 4.7 percent to A$12.28 after forecasting that its earnings before interest and tax will decline 5 percent to 7 percent this year from the prior 12 months.

Shunfeng Photovoltaic International Ltd., a maker of solar cells, surged 19 percent to HK$6.36 in Hong Kong, a record close, after announcing it would acquire Wuxi Suntech Power Co.

MStar Semiconductor gained 7 percent to NT$329 in Taipei, closing at an all-time high after reporting its third-quarter profit increased 67 percent from a year earlier.

David Jones Ltd. (DJS) climbed 4.5 percent to A$3.03 in Sydney after brokers from Credit Suisse Group AG to Deutsche Bank AG upgraded recommendations on the retailer’s shares.

To contact the reporters on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net; Eleni Himaras in Hong Kong at ehimaras@bloomberg.net

To contact the editor responsible for this story: Sarah McDonald at smcdonald23@bloomberg.net


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