Bloomberg News

Asian Stocks Decline After Longest Run of Daily Gains This Year

February 13, 2014

Topix Index

People look at an electronic stock board displaying the day's movements of the Topix index outside a securities firm in Tokyo. Japan’s Topix index dropped 0.4 percent. Photographer: Yuriko Nakao/Bloomberg

Asian stocks dropped after the regional benchmark index climbed for a sixth day yesterday to cap its longest run of advances this year.

Asahi Group (2502) Holdings Ltd. slid 4.5 percent in Tokyo after Japan’s second-largest beermaker’s net-income forecast missed estimates. Tokyo Tatemono Co. plunged 8.3 percent after the developer predicted full-year operating profit below analyst expectations. Qantas Airways Ltd. jumped 6.3 percent after the Sydney Morning Herald reported that Australian Treasurer Joe Hockey said the nation’s biggest carrier met pre-conditions for government support.

The MSCI Asia Pacific Index slipped 0.9 percent to 135.15 as of 4:02 p.m. in Hong Kong, with about seven shares falling for every two that rose. The measure rebounded 4.8 percent through yesterday from a five-month low on Feb. 4. Futures on the Standard & Poor’s 500 Index slid 0.4 percent today after the gauge slipped less than 0.1 percent yesterday as Procter & Gamble Co., the world’s largest consumer-products maker, cut its forecasts and Amazon.com Inc. was downgraded at UBS AG.

“The softness that we’re seeing in January and February should be expected,” Mark Matthews, Singapore-based head of Asia research for Julius Baer, which oversees about $377 billion, said on Bloomberg TV. “Markets can’t go up in a straight line. We got so much money after the global financial crisis here in Asia and now we’re seeing a lot of outflows.”

The Asia-Pacific equity benchmark climbed back after losing 4.6 percent in January, its worst start since 2009, amid concern about the Federal Reserve’s stimulus cuts, a slowdown in China and volatility in developing markets.

Global Rebound

Global equity losses in 2014 peaked at $3 trillion on Feb. 4 and have since narrowed to less than $1 trillion, data compiled by Bloomberg show. Foreign investors pulled a net $9.6 billion out of Japanese equities last month, according to the data.

Japan’s Topix index dropped 1.6 percent. Taiwan’s Taiex index, China’s Shanghai Composite Index and Hong Kong’s Hang Seng Index lost 0.5 percent. India’s S&P BSE Sensex index slipped 0.7 percent.

Australia’s S&P/ASX 200 Index fell less than 0.1 percent, erasing gains of as much as 0.4 percent. A government report showed that the nation’s unemployment rate rose to 6 percent, the highest in more than a decade.

South Korea’s Kospi index dropped 0.5 percent after the nation’s central left its key interest rate unchanged. New Zealand’s NZX 50 Index and Singapore’s Straits Times Index added 0.1 percent.

“It does look like this rally is coming to a halt,” Evan Lucas, a markets strategist in Melbourne at brokerage IG Ltd. “We have to watch earnings, particularly in Japan. The earnings so far have been OK but they’re not fantastic.”

Relative Value

Shares on the MSCI Asia Pacific Index traded at 12.8 times estimated earnings yesterday, compared with 15.4 for the S&P 500 and 14.2 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Of the 322 companies on the Asian measure that have reported quarterly earnings since the beginning of January and for which estimates are available, 54 percent beat profit expectations, Bloomberg-compiled data show.

Asahi Group sank 4.5 percent to 2,692 yen in Tokyo. The maker of Super Dry beer said yesterday full-year profit will rise 8.5 percent to 67 billion yen ($654 million). That compares with the 77.4 billion yen average of 14 analysts’ estimates compiled by Bloomberg.

Tokyo Tatemono slumped 8.3 percent to 869 yen, the most since May 30, after forecasting full-year operating profit of 27 billion yen. That compares with the 34 billion yen average estimate compiled by Bloomberg from 13 analysts.

Prada, Qantas

Prada SpA declined 4.9 percent to HK$60.55 in Hong Kong after the Italian handbag maker reported weakening quarterly sales growth and softening demand in Europe and Asia.

Among shares that rose, Qantas climbed 6.3 percent to A$1.185 in Sydney, the steepest gain since Aug. 29. The airline, which is seeking a debt guarantee from the government, meets pre-conditions for potential sovereign support, the Sydney Morning Herald quoted Hockey as saying.

Singapore Telecommunications Ltd., Southeast Asia’s biggest phone company, rose 1.7 percent to S$3.57 after reporting third-quarter profit increased 5.4 percent to S$872 million ($689 million) from a year earlier.

To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net

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


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