Asia Stocks Drop as China Shares Fall; Copper Rebounds

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Asia’s benchmark stock index fell for a fourth day as Chinese shares retreated and the yen gained. Copper snapped three days of losses while Australia’s dollar weakened and precious metals advanced.

The MSCI Asia Pacific Index slid 0.2 percent by 12:33 p.m. in Tokyo, after rising as much as 0.5 percent. Hong Kong’s Hang Seng Index dropped 0.8 percent and the Shanghai Composite Index slid 0.7 percent. Standard & Poor’s 500 Index futures were little changed. Copper rallied 0.5 percent and gold rose 0.3 percent. Australia’s currency fell 0.3 percent versus the dollar and the yen climbed 0.2 percent. Natural gas fell for a fourth day and headed for a more than two-month low.

China’s leaders will meet in Beijing Nov. 9-12 to map out economic policies as the country heads for its slowest annual growth in more than two decades. Australia’s central bank kept its key rate at a record-low 2.5 percent today and said the currency was still “uncomfortably high.” The Institute for Supply Management in the U.S. issues its non-factory measure for October today.

“All eyes are on the third party plenum this weekend,” Tim Moe, a Hong Kong-based strategist at Goldman Sachs Group Inc., told Bloomberg TV. “The market has priced in a fair amount of expectation about this and therefore from a tactical standpoint, the market is vulnerable to profit-taking.”

Chinese Shares

In China, investors are selling stocks on concern government reforms will be disappointing at the Communist Party meeting, Tebon Securities analyst Zhang Haidong said from Shanghai. Tsingtao Brewery Co. slumped 3.2 percent to lead declines for consumer-staples producers.

China Citic Bank Corp. and Ping An Bank Co. slid more than 1.2 percent amid concerns about increased competition after the China Securities Journal said the government may allow licenses for private banks early next year.

Japan’s Topix index dropped 0.3 percent, erasing gains of as much as 0.8 percent. Nissan Motor Co., Japan’s third-largest carmaker by market value, plunged 10 percent after cutting its net-income forecast. Komatsu Ltd., a construction-equipment maker that gets about 80 percent of its revenue outside Japan, lost 2.4 percent. The yen climbed to trade at 98.36 per dollar. Japan’s markets were closed yesterday for a holiday.

The Thai baht headed for a three-week low, falling to 31.313 per dollar on concern protests against a bill that would grant an amnesty for political offenses in the country will escalate, deterring investment.

Aussie Declines

Australia’s dollar, known as the Aussie, retreated 0.3 percent to 94.81 U.S. cents. The currency gained 0.8 percent yesterday, the most since Oct. 17, as data showed retail sales rose twice as fast as economists estimated in September.

The Bloomberg U.S. Dollar Index, a gauge of the U.S. currency against 10 major peers, was little changed after snapping its longest rally since May yesterday, dropping 0.3 percent. Ten-year Treasury yields were little changed at 2.6 percent after falling two basis points, or 0.02 percentage point, in New York.

In the U.S., Federal Reserve Bank of Dallas President Richard Fisher said yesterday the nation should resume normal monetary policy as soon as possible. The Fed currently buys $85 billion a month of bonds to bolster the world’s largest economy and damp borrowing costs.

U.S. Economy

The ISM non-manufacturing composite index for the U.S. will drop to 54.0 for October from 54.4 the previous month, according to a Bloomberg survey of economists.

A government report Nov. 7 is forecast by economists to show the U.S. economy grew at a 2 percent annualized rate in the third quarter, compared with a 2.5 percent increase in the previous three months. Economists predict a report the next day will show payrolls climbed by 120,000 in October and the unemployment rate increased to 7.3 percent from 7.2 percent in the previous month, according to a separate survey.

Copper climbed to $7,183 a metric ton. Gold rose to $1,317 an ounce, after closing at the lowest level since Oct. 16 yesterday. Silver and platinum gained at least 0.2 percent each.

U.S. natural gas dropped amid forecasts for moderate November temperatures that would limit demand for the heating fuel. Gas futures fell 0.4 percent to $3.432 per million British thermal units in electronic trading on the New York Mercantile Exchange.

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