Asian Stocks Decline on Economic Concerns

Youth challenge symbols of world capitalism in Rome, Italy as the Occupy Wall Street Movement spreads throughout the globe. On October 15, 2011 demonstrations were held in over 30 countries in North America, Europe and Asia., a photo by Pan-African News Wire File Photos on Flickr.

Asian Stocks Decline on Economic Concerns

By Lynn Thomasson
Bloomberg
Mar 5, 2012

Asian stocks fell for a second day, led by raw-material producers, and the yen strengthened on concern global economic growth is slowing. Australia’s bond risk rose to a two-week high.

The MSCI Asia Pacific Index (MXAP) slid 0.8 percent as of 11:26 a.m. in Tokyo, poised for the first back-to-back drop in two months. The Hang Seng China Enterprises Index sank 1.4 percent and Standard & Poor’s 500 Index futures lost 0.2 percent. The yen climbed against all its major peers, while the New Zealand dollar touched a five-week low. Oil pared gains after earlier climbing as much as 0.6 percent.

U.S. factory orders decreased for the first time in three months and euro-area services output shrank more than forecast in February, economic reports showed yesterday, while China cut its economic growth target. President Barack Obama said at a meeting with Israeli Prime Minister Benjamin Netanyahu that the U.S. has a commitment to Israel’s security and that “all options” are available to prevent a nuclear-armed Iran.

“We’ve come so far, so quickly that a little pullback has to be expected,” David Joy, the Boston-based chief market strategist at Ameriprise Financial Inc., said in a Bloomberg Television interview. China cutting its growth projection “takes a little wind out of the sails of this euphoria,” he said.

Equity Valuations

Asian stocks have rallied for the past 11 consecutive weeks, pushing the MSCI gauge up 11 percent in 2012. The Asian equity benchmark trades at 14.8 times estimated earnings, near the highest level since May 2010, according to data compiled by Bloomberg.

Raw-material producers slid 1.4 percent for the biggest drop among 10 industries in the MSCI Asia-Pacific index. BHP Billiton Ltd., the world’s largest mining company, slumped 2.4 percent in Australian trading, poised for the biggest drop since December. Copper declined for a third day, with the three-month contract falling as much as 0.5 percent to $8,463.5 a metric ton.

AIA Group Ltd. (1299) tumbled 7 percent in Hong Kong. American International Group Inc. will sell $6 billion of AIA shares to help repay U.S. government rescue funds.

Brent oil for April settlement gained 15 cents to $123.95 a barrel on the London-based ICE Futures Europe exchange. Obama and Netanyahu met in Washington yesterday to consider their next steps to force Iran to give up a program that they say is aimed at building a nuclear bomb. Neither leader set out a clear threshold that would trigger military action, while Obama called for more time to let sanctions and diplomacy work.

Kiwi Weakens

The New Zealand dollar, known as the kiwi, touched 81.66 U.S. cents, the lowest since Jan. 30. The nation’s budget deficit was wider than forecast in the seven months through January after higher-than-expected earthquake-insurance liabilities, a report today showed.

The Markit iTraxx Australia index climbed 2.3 basis points to 145.3 basis points, Deutsche Bank AG prices show. The gauge is set for its highest close since Feb. 17, according to data provider CMA.

The euro fell 0.2 percent against the yen for a fifth day of declines. Gross domestic product in the 17-nation euro area probably fell 0.3 percent in the last quarter of 2011 from the previous three month period, according to the median estimate of economists in a Bloomberg News survey before the European Union’s statistics office releases the data today.

To contact the reporter on this story: Lynn Thomasson in Hong Kong at lthomasson@bloomberg.net.

To contact the editor responsible for this story: Alexander Kwiatkowski in Singapore at akwiatkowsk2@bloomberg.net