Asian stocks fell, with the benchmark regional index declining from a four-month high, as the Federal Reserve begins a two-day policy meeting at which it is forecast to reduce the pace of its U.S. bond buying.
Samsung Electronics Co. (005930), Asia’s biggest technology company, sank 2.5 percent in Seoul, retreating from the highest level since May. Daiichi Sankyo Co. (4568), a drugmaker that owns 64 percent of Ranbaxy Laboratories Ltd., tumbled 5.7 percent in Tokyo after U.S. regulators restricted imports from one of the Indian drugmaker’s facilities. Japan’s Topix index rose 0.4 percent as the equity market reopened after a holiday.
The MSCI Asia Pacific Index slipped 0.3 percent to 138.32 as of 11:38 a.m. in Hong Kong as nine of the 10 industry groups on the gauge declined. The Federal Open Market Committee meets today and tomorrow to consider whether to taper its $85 billion-a-month in bond buying. Purchases will probably be cut by $10 billion, according to a Bloomberg survey of economists.
“Tapering is coming, but it’s only going to be small,” Kerry Series, Sydney-based chief investment officer at Eight Investment Partners, told Bloomberg TV. “There is an economic recovery underway in the U.S., but it’s fragile. The combination of low valuations, easy monetary policy and reasonable earnings growth across the region means markets will want to go higher.” His Asia-Pacific fund beat 89 percent of peers, rising 39 percent in the past year, according to data compiled by Bloomberg.
Australia’s S&P/ASX 200 Index (AS51) rose 0.1 percent, trading at a five-year high. New Zealand’s NZX 50 Index slid 0.1 percent, falling from a record high. Taiwan’s Taiex Index dropped 0.3 percent and Singapore’s Straits Times Index gained 0.2 percent.
South Korea’s Kospi index retreated 0.5 percent, as Samsung dragged the country’s benchmark lower. Shares of the electronics maker slid 2.5 percent to 1.389 million won. Hong Kong’s Hang Seng Index sank 0.2 percent and China’s Shanghai Composite Index lost 0.9 percent.
The MSCI Asia Pacific Index’s 7.2 percent rally in 2013 through yesterday has lagged a 19 percent surge on the Standard & Poor’s 500 Index amid concern economic growth in China is slowing. The Asia-Pacific measure yesterday traded at 13.5 times estimated earnings, compared with a multiple of 15.4 for the S&P 500 and 14.3 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
The Asia-Pacific index climbed to a four-month high yesterday after former Treasury Secretary Lawrence Summers withdrew his bid to be the next Fed chairman.
Japanese equity markets “are playing catch-up on the Summers effect, having been closed” for a holiday, said Evan Lucas, a market strategist at IG Ltd. in Melbourne.
The Reserve Bank of Australia said it retains the option of reducing interest rates and a further decline in the currency would aid the economy as resource investment slows, minutes of the central bank’s Sept. 3 meeting showed. Governor Glenn Stevens and his board left the benchmark interest rate at a record-low 2.5 percent at that meeting.
Futures on the S&P 500 Index fell 0.1 percent today. The gauge yesterday came within five points of its record high of 1,709.67 on Aug. 2.
The U.S. benchmark measure has rallied for nine of 10 sessions this month, rising 4 percent to rebound from the worst monthly loss since May 2012, as reports showed China’s economy strengthened and the U.S. looked less likely to attack Syria.
Daiichi Sankyo lost 5.7 percent to 1,793 yen as U.S. regulators restricted imports from a factory of its Indian unit Ranbaxy Laboratories. The plant would have been used to make a majority of generic drugs that Ranbaxy was filing for U.S. approval, including Diovan, according to Cantor Fitzgerald LP, referring to a blood-pressure pill that generated $4.4 billion in sales for Novartis AG last year.
Wing Hang Bank Ltd. (302) soared 40 percent to HK$117.40 in Hong Kong after saying shareholders were approached for a takeover bid. The firm joins other lenders such as Chong Hing Bank Ltd. in acquisition talks as Hong Kong’s role as an international yuan center attracts mainland financial institutions that are seeking to expand overseas.
Nippon Yakin Kogyo Co. (5480) soared 22 percent to 342 yen in Tokyo after starting contract production for a unit of Japan’s biggest steelmaker.