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Asian Stocks Decline Third Day as China Production Slows

11 May 2012

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  Hong Kong  Stock Exchange


(Bloomberg)

Asian stocks dropped for a third day after JPMorgan Chase & Co. said it had a $2 billion trading loss and China’s industrial output grew at a slower pace, while production at Indian factories unexpectedly contracted.

Industrial & Commercial Bank of China Ltd., the world’s biggest lender by market value, dropped 1.6 percent in Hong Kong. Sony Corp. tumbled 6.4 percent in Tokyo, heading for its lowest close since 1980, after the maker of Bravia televisions and PlayStation game consoles forecast half as much profit as analysts were expecting. Genting Singapore Plc sank 3.6 percent as the theme park and casino operator posted lower first-quarter net income.

“The market is struggling to digest negative factors coming in one after another,” said Koichi Kurose, chief economist in Tokyo at Resona Bank Ltd., Japan’s fifth-largest lender by market value. “China’s economy doesn’t look good, judging from reports. There are strong expectations for quick monetary easing, but they can’t loosen regulations on real estate.”

According to Blooomberg report, the MSCI Asia Pacific Index declined 1 percent to 118.48 as of 3:36 p.m. in Tokyo, with more than four shares falling for each that rose. The measure is heading for its biggest weekly loss in almost six months as France’s political changes and instability in Greece threaten to derail austerity plans and worsen Europe’s debt crisis.

Australia’s S&P/ASX 200 Index slid 0.2 percent. South Korea’s Kospi Index (KOSPI) and Hong Kong’s Hang Seng Index decreased 1.4 percent. Japan’s Nikkei 225 Stock Average fell 0.6 percent.
China, India

China’s Shanghai Composite Index (SHCOMP) slipped 0.4 percent. The nation’s industrial output growth slowed to 9.3 percent last month from 11.9 percent in March, missing economist’s estimates, according to data released today by the government. A separate report showed the country’s inflation rate was below the government’s target for a third month.
Chinese lenders fell. ICBC, as China’s biggest bank is known, dropped 1.6 percent to HK$4.88 in Hong Kong. China Construction Bank Corp. (939) fell 1.4 percent to HK$5.59.

India’s Sensitive Index decreased 0.9 percent. The country’s industrial production unexpectedly contracted in March as weaker domestic demand and sliding exports hurt the economy.

Futures on the Standard & Poor’s 500 Index dropped 0.7 percent today as JPMorgan revealed a $2 billion trading loss on synthetic credit securities after an “egregious” failure in its chief investment office. The index rose 0.3 percent yesterday as weekly U.S. jobless claims showed continued recovery in the labor market.

“Clearly JPMorgan got it wrong,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has almost $100 billion under management. “I suspect it’s probably a one off, but it comes during a week where we’ve seen risk off in a big way.”
Sony, Genting

Sony Corp. sank 6.4 percent to 1,135 yen in Tokyo, the lowest close since August 1980. The company said profit this fiscal year may reach 30 billion yen ($376 million), about half of the average estimate of 18 analysts compiled by Bloomberg News.
Noble Group Ltd. (NOBL) lost 1.7 percent to S$1.15 in Singapore after Asia’s biggest listed commodities trader posted first- quarter earnings that missed analysts’ estimates. Genting fell 3.6 percent to S$1.61 after saying first-quarter profit dropped 33 percent to S$205.5 million ($164 million) from a year earlier.

Of the 550 companies on the MSCI Asia Pacific Index that reported quarterly earnings since April 10, 211 exceeded analysts’s estimates, while 208 fell short of expectations, according to data compiled by Bloomberg News.
Automakers Advance

Exporters advanced after a report showed U.S. claims for unemployment benefits declined last week to the lowest level in a month, easing concern that the American labor market is faltering.

Nissan Motor Co. (7201), the carmaker that gets about one-third of sales from North America, climbed 3.3 percent to 804 yen. Honda Motor Co., Japan’s second-largest automaker, gained 1.5 percent to 2,752 yen.

Toyota Motor Corp. advanced 2.1 percent to 3,235 yen. Asia’s largest automaker passed General Motors Co. to sell the most cars and trucks in the world in the first three months of the year as it made up for earlier production losses caused by natural disasters in Asia, according to data compiled by Bloomberg.

The MSCI Asia Pacific Index (MXAP) rose 5.1 percent this year through yesterday, compared with an 8 percent gain by the S&P 500 and a 2.7 percent advance by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 12.2 times estimated earnings on average, compared with a multiple of 12.9 for the S&P 500 and 10.4 times for the Stoxx 600.

Tags: Business, World, Asian Stocks, Decline, China Production

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