Asian Stocks Fall Amid Mixed Earnings, Fed Concern


Asian stocks fell, snapping the regional benchmark’s longest winning streak in six weeks, amid mixed corporate earnings across the region and after economists predicted the Federal Reserve will reduce stimulus next month.

Sony Corp., an electronics maker that gets 68 percent of sales overseas, slid 1.6 percent, pacing declines among Japanese exporters as the yen rose. Thai Beverage Pcl (THBEV), a brewer controlled by billionaire Charoen Sirivadhanabhakdi, sank 5.2 percent in Singapore after posting lower sales and profit. Li & Fung Ltd. jumped 12 percent after saying business is recovering, leading an advance in Hong Kong’s Hang Seng Index (HSI), which briefly erased losses for the year.

The MSCI Asia Pacific Index dropped 0.4 percent to 135.41 as of 12:40 p.m. in Tokyo, with five shares falling for every two that rose. Nine of the 10 industry groups on the gauge declined. The measure climbed 8.8 percent through yesterday from this year’s low on June 25.

“The market’s had a good run over the last few weeks, so we’re likely to see a bit of selling pressure today,” Matthew Sherwood, head of investment markets research in Sydney at Perpetual Investments, which manages about $25 billion, said by telephone. “We’ve had a few results that missed expectations and the reporting season has been pretty mixed. The jobless claims will be watched as that’s regarded as a very good leading indicator for the U.S.”

Asian Earnings

While the Asia-Pacific benchmark stock index rose for the past five days, less than 50 percent of members that have reported earnings this season posted profits that beat analyst estimates, data compiled by Bloomberg show. A report today may show U.S. jobless claims fell in the week to Aug. 3, fueling speculation that has 65 percent of economists surveyed by Bloomberg predicting the Fed will pare bond purchases next month.

Japan’s Topix index slid 1.5 percent, while the benchmark Nikkei 225 Stock Average dropped 1.8 percent. Japanese exporters declined as the yen climbed as much as 0.5 percent against the dollar today. A stronger yen reduces the overseas income of the nation’s carmakers and electronics manufacturers when repatriated.

The Topix index surged 36 percent this year through yesterday, retaining its position as the world’s best-performing developed equity market, amid optimism Prime Minister Shinzo Abe will push through reforms while the Bank of Japan provides record stimulus to spur a recovery in Asia’s second-largest economy.

Regional Gauges

Taiwan’s Taiex index lost 0.6 percent and Singapore’s Straits Times Index dropped 0.7 percent. Australia’s S&P/ASX 200 Index slipped 0.2 percent and New Zealand’s NZX 50 Index was little changed. Indian and South Korean markets are closed.

Hong Kong’s Hang Seng Index advanced as much as 0.7 percent, briefly erasing this year’s loss. Trading in the city resumed today after being canceled yesterday because of a typhoon. China’s Shanghai Composite Index was little changed.

The MSCI Asia Pacific gauge traded at 13.2 times estimated earnings yesterday, compared with 15.3 for the Standard & Poor’s 500 Index and 14.1 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Futures on the Standard & Poor’s 500 Index fell 0.1 percent today. U.S. stocks dropped yesterday as Macy’s Inc. paced a drop in retailers after reducing its earnings forecast and as speculation heightened that the Fed will reduce stimulus in September. The S&P 500 (SPX) lost 0.5 percent, dropping to the lowest closing level since July 29.

Fed Stimulus

The Fed, led by Chairman Ben S. Bernanke, will probably reduce its $85 billion in monthly bond purchases at its meeting on Sept. 17-18, according to 65 percent of economists surveyed by Bloomberg from Aug. 9 to Aug. 13. In a survey last month, half of economists predicted a reduction at next month’s meeting.

Data yesterday showed the euro area’s economy emerged from a record-long recession in the second quarter, led by Germany and France. Gross domestic product expanded 0.3 percent after a 0.3 percent contraction in the first quarter, the European Union’s statistics office said.

Japanese exporters declined as the yen headed for a second day of advance. Sony, the maker of Bravia televisions and PlayStation game consoles, dropped 1.6 percent to 1,969 yen. Panasonic Corp. (6752), Japan’s biggest consumer electronics maker, fell 3.2 percent to 858 yen. Nissan Motor Co., which gets about 80 percent of sales overseas, lost 1.2 percent to 1,042 yen.

Farm Revenue

Kubota Corp. (6326), a tractor maker that gets 23 percent of its sales from North America, dropped 3.2 percent to 1,475 yen after rival Deere & Co. forecast a decline in U.S. farm revenue.

Thai Beverage sank 5.2 percent to 54.5 Singapore cents. Second-quarter profit slipped 2 percent from a year earlier to 4.92 billion baht ($157.4 million) as sales declined 11 percent.

Among stocks that advanced, Li & Fung, a supplier of toys and clothes to retailers including Wal-Mart Stores Inc., jumped 12 percent to HK$11.78 in Hong Kong, poised for its biggest gain since April 2009. Orders for the second half are “solid,” Chief Executive Officer Bruce Rockowitz said on Aug. 13.

AMP Ltd. climbed 4.1 percent to A$4.725 after Australia’s biggest life insurer and pension manager posted profit that beat estimates.


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