29 Oct 2009
Oct. 29 (Bloomberg) -- Asian stocks fell, extending a global sell-off, as companies from PetroChina Co. to Australia & New Zealand Banking Group Ltd. posted lower-than-estimated profit and China moved to tighten lending rules. The yen rose.PetroChina, the nation's biggest oil producer, slumped 4.9 percent in Hong Kong. Advantest Corp., the world's No. 1 maker of memory-chip testers, slid 5.9 percent after posting a wider loss on slumping orders. ANZ Banking dropped 2.4 percent in Sydney as its chief executive officer said the Australian economy is "still fragile." Industrial & Commercial Bank of China Ltd. sank 3.2 percent on government plans to tighten rules on personal loans.
The MSCI Asia Pacific Index slipped 1.5 percent to 114.58 as of 1:02 p.m. in Tokyo, extending a two-day, 2.9 percent decline. The gauge has climbed 62 percent from a more than five- year low on March 9 amid signs the global economy is recovering from its worst slowdown since World War II. The MSCI World Index lost 0.3 percent, after slumping 2 percent yesterday.
"Investors are wise to take some of their money off the table," said Jonathan Ravelas, strategist at Manila-based Banco de Oro Unibank Inc., which has about $8 billion of assets. "There is a lingering doubt in the market if the corporate earnings we are seeing are being driven by actual demand or is it all because of government stimulus spending."
Japan's Nikkei 225 Stock Average sank 1.9 percent, while Hong Kong's Hang Seng Index dropped 2.4 percent. Australia's S&P/ASX 200 Index declined 2.5 percent as BHP Billiton Ltd., the world's largest mining company, slid 3.2 percent after commodity prices declined.
New Home Sales
South Korea's Kospi Index declined 2.2 percent. Hyundai Steel Co. tumbled 6 percent after cutting product prices. New Zealand's NZX 50 Index dipped 0.5 percent as the nation's central bank said it will wait until the second half of next year before raising interest rates.
Futures on the Standard & Poor's 500 Index rose 0.1 percent. The gauge fell 2 percent in New York yesterday, the most in a month, as the Commerce Department said sales of new homes fell 3.6 percent to a level that was lower than the most pessimistic economist's forecast.
Concern the global economic recovery is faltering damped demand for higher-yielding assets. The yen climbed to 132.82 against the euro, its highest since Oct. 14. Treasuries were little changed, with yields near the lowest in a week.
Worse Than Estimated
In Hong Kong, PetroChina dropped 4.9 percent to HK$9.46. The company posted a 24 percent drop in third-quarter profit to 30.8 billion yuan ($4.5 billion) as oil prices slumped from a record. The median estimate of five analysts surveyed by Bloomberg was for a profit of 35 billion yuan.
In Tokyo, NEC Electronics Corp. tumbled 12 percent to 659 yen. Japan's fourth-largest chipmaker widened its full-year net loss forecast, citing lower demand for semiconductors used in cars, flat-panel televisions and handsets.
Advantest slumped 5.9 percent to 2,080 yen. The company's second-quarter net loss widened to 3.3 billion yen ($36 million) from 2.8 billion yen a year earlier.
The MSCI World Index tumbled 42 percent last year and the MSCI Asia Pacific Index slumped by a record 43 percent as the global credit crunch dragged economies worldwide into recession. The financial crisis isn't over, Harvard University professors Kenneth Rogoff and Niall Ferguson said.
Rising Interest Rates
The Reserve Bank of Australia this month became the first central bank among Group of 20 nations to raise interest rates amid signs of strength in the country's economy. New Zealand's central bank maintained the official cash rate at a record-low of 2.5 percent because the economy needs further stimulus as it recovers from a recession.
Australia's central bank should have waited longer before raising borrowing costs because the economy is "still fragile," ANZ Bank Chief Executive Officer Mike Smith told reporters in Sydney today.
The lender, Australia's second-biggest provider of business loans, dropped 2.4 percent to A$22.80. Full-year net income fell 11 percent to A$2.94 billion ($2.6 billion), short of the A$3.13 billion analysts in a Bloomberg survey anticipated.
Better-than-estimated earnings and economic reports have driven the global stock rally since March. Companies in the MSCI Asia Pacific Index are valued at 22 times estimated earnings, compared with 17 times for the S&P 500 and 15 times for Europe's Dow Jones Stoxx 600 Index.
‘Better To Wait'
"The market was hoping for some major forecast upgrades that just aren't coming through as companies are clearly nervous about the second half," said Naoki Fujiwara, chief fund manager at Tokyo-based Shinkin Asset Management Co., which oversees the equivalent of $4 billion. "It's probably better to wait on buying as stocks are likely headed a bit lower."
Industrial & Commercial Bank, the world's largest bank by market value, fell 3 percent to HK$6.06. Bank of China Ltd. retreated 1.7 percent to 3.97 yuan in Shanghai. China Vanke Co., the nation's biggest publicly traded developer, sank 3.4 percent to 11.52 yuan.
The rule changes are aimed at ensuring loans enter the real economy, the China Banking Regulatory Commission said yesterday. Advances exceeding 300,000 yuan ($43,937) will be given directly to the borrower's counterparty, rather than the borrower, according to a draft rule.
Oil, Metals Slump
"What we might be seeing is just some signaling, as we're seeing elsewhere, that they might have to take away some of that stimulus in the private sector just to keep things on an even keel," Simon Godfrey, a senior investment specialist at Fortis Investment Management, said in a Bloomberg Television interview from Hong Kong. "There could be some negative reaction here."
Resources companies declined after crude oil for December delivery tumbled 2.6 percent, the most in a month, to $77.46 a barrel in New York yesterday, while the London Metals Index, a measure of six metals, slumped 3.2 percent.
BHP dropped 3.2 percent to A$37.16. Rio Tinto Ltd., the world's second-biggest mining company, slipped 4.6 percent to A$61.17. Woodside Petroleum Ltd., Australia's No. 2 oil producer, dropped 2.9 percent to A$46.98. Inpex Corp., Japan's largest oil explorer, fell 3 percent to 747,000 yen. Cnooc Ltd., China's biggest offshore oil producer, declined 4 percent to HK$11.56.
Nippon Mining Holdings Inc. sank 4.9 percent to 388 yen. Japan's biggest copper producer and an oil refiner said in a preliminary earnings statement first-half net income was 18.8 billion yen, missing its projection by 18 percent, amid narrower margins for petroleum products.
Hyundai Steel, South Korea's second-largest steelmaker, slumped 6 percent to 76,900 won. The company lowered the price of some products for the first time this year after the cost of steel scrap and competing imports declined.
