Asian stocks fell for a third day this week as U.S. lawmakers failed to break a deadlock over raising the federal debt limit, and durable goods orders in the world’s biggest economy unexpectedly declined.
Toyota Motor Corp. (7203), the No. 1 carmaker, slid 1.8 percent in Tokyo. Mitsubishi UFJ Financial Group Inc. (8306), Japan’s biggest publicly traded lender, fell 1.7 percent. China Construction Bank Corp. led Chinese lenders lower after the government prohibited banks from renewing loans to local financing vehicles. BHP Billiton Ltd. (BHP), the world’s largest mining company by market value, retreated 1.7 percent in Sydney after oil and metal prices declined. Hitachi Construction Machinery Co. jumped 4.6 percent in Tokyo after boosting its net income forecast.
“There’s increased nervousness in equity markets as the debt ceiling deadline draws near,” saidTim Schroeders, who helps manage $1 billion in global equities at Pengana Capital Ltd. in Melbourne. “A de-rating of U.S. debt down the track could reduce monetary liquidity, and some bank earnings may be hurt. Exporter-led earnings are increasingly at risk under such a volatile backdrop.”
The MSCI Asia Pacific Index slid 0.9 percent to 137.69 as of 11:17 a.m. in Tokyo. About seven stocks fell for each that rose on the gauge. The measure is headed for a decline this week as forecasts for higher earnings at companies from Canon Inc. to Baidu Inc. were overshadowed by concern the U.S. may default on its debt if lawmakers can’t reach an agreement on raising the government’s borrowing limit by Aug. 2
The Region Declines
Japan’s Nikkei 225 (NKY) Stock Average fell 1.1 percent, sliding below the 10,000 yen level for the first time in a week. South Korea’s Kospi index declined 0.9 percent and Australia’s S&P/ASX 200 Index slipped 1.4 percent. Hong Kong’s Hang Seng Index (HSI) dropped 1.2 percent while the Shanghai Composite Index retreated 1.2 percent.
Futures on the Standard & Poor’s 500 Index rose 0.1 percent today. The index sank 2 percent yesterday in New York as lawmakers indicated they were no closer to reaching a compromise on the federal debt limit, while a government report showed orders for durable goods unexpectedly decreased.
A ‘True Compromise’
The S&P 500’s biggest decline since June 1 came as House Speaker John Boehner’s reworked deficit-cutting plan gained support among Republicans, while Senate Majority Leader Harry Reidsaid his competing proposal to avert a potential U.S. default is the only “true compromise.”
Stocks extended declines after the U.S. Commerce Department yesterday said bookings for goods meant to last at least three years fell 2.1 percent in June after a 1.9 percent gain in May that was smaller than last reported. The median forecast of 76 economists surveyed by Bloomberg News projected a 0.3 percent increase. Demand for business equipment, including machinery and computers, also dropped.
Consumer discretionary stocks, including exporters such as Toyota and Honda Motor Co., dropped the second-most among the 10 industry groups on the MSCI Asia Pacific Index today.
Toyota, which counts North America as its biggest market for sales, slid 1.8 percent to 3,195 yen. Honda, the automaker which receives 83 percent of its revenue abroad, also declined 1.8 percent to 3,090 yen in Tokyo. Samsung Electronics Co., a South Korean consumer and industrial electronics maker that gets about 85 percent of its revenue abroad, lost 1.5 percent to 832,000 won in Seoul. The companies were among the biggest drags on the MSCI Asia Pacific index.
‘Risk Avoidance’
“In addition to the recent debt impasse in the U.S., investors need to be more conscious about the deterioration of the actual economy,” said Mitsushige Akino, who oversees about $600 million in Tokyo at Ichiyoshi Investment Management Co. “Risk avoidance is increasing again.”
Stocks also fell after Standard & Poor’s said Greece will partially default on its debt once European officials push through a plan that will see bondholders foot part of the bill of a second bailout agreed to last week in Brussels. The rating company also cut its ranking for Greece to CC, two steps above default, from CCC.
Mitsubishi UFJ Financial Group fell 1.7 percent to 396 yen. Westpac Banking Corp., Australia’s second-largest lender by market value, slumped 1.5 percent to A$20.70. Australia & New Zealand Banking Group Ltd., Australia’s No. 3, lost 1.5 percent to A$20.96.
A Heavy Drag
Banks as a group were the heaviest drags to the MSCI Asia Pacific Index among its 10 industry groups.
Chinese banks fell after commercial lenders were banned from rolling over or renewing their loans to local-government financing vehicles, according to a statement posted on the China Banking Regulatory Commission’s website today.
China Construction Bank slid 1.9 percent to HK$6.24 in Hong Kong. Industrial & CommercialBank of China Ltd. (601988) slumped 2 percent to HK$5.87. Bank of China Ltd. declined 0.7 percent to 3.03 yuan in Shanghai.
Raw-material producers dropped after crude oil dropped for a second day in New York, while the London Metal Exchange Index of prices for six metals including copper and aluminum slid 0.2 percent yesterday.
Copper, Oil Falls
BHP retreated 1.7 percent to A$42.26, the biggest single drag on the MSCI Asia Pacific Index. Woodside Petroleum Ltd., Australia’s second-biggest oil and gas producer, slumped 1.3 percent to A$39.03. Inpex Corp., a Japanese energy exploration company, declined 1.8 percent to 591,000 yen.
Crude oil for September delivery slid as much as 0.6 percent to $96.80 a barrel today, its second day of declines. Copper in London dropped as much as 0.3 percent to $9,750 a metric ton, also falling for a second day.
Among stocks that advanced, Hitachi Construction Machinery, which makes as well as repairs machinery, jumped 4.6 percent to 1,759 yen, the second-biggest gain on the MSCI Asia Pacific Index. The company boosted its forecast for net income to 3.8 billion yen from 1.5 billion yen for the six months ending Sept. 30, citing higher sales of parts and cost reductions.
No comments:
Post a Comment