Asia stocks fall a fourth day as BOJ refrains from more easing
BOJ refrains from boosting stimulus as economy shows signs of weathering the impact of first sales-tax hike since 1997
Sydney: Asian stocks fell for a fourth day, with the regional benchmark index posting its longest losing streak since January, as the yen strengthened and the Bank of Japan (BOJ) refrained from adding to monetary stimulus.
Raw-material suppliers retreated, with Fortescue Metals Group Ltd losing 2.4% in Sydney after benchmark prices for iron-ore delivered to China’s Tianjin port dropped to the lowest since 2012. Mazda Motor Corp. fell 2.4% as the yen traded near its strongest level in more than three months. Japan Petroleum Exploration Co. led energy suppliers higher, jumping 8%, after its stock rating was raised by SMBC Nikko Securities Inc.
The MSCI Asia Pacific Index slipped 0.1% to 138.93 as of 7.12pm in Hong Kong. The gauge dropped the past three days amid concern about the pace of global growth after valuations on the measure last week touched a six-week high.
“Markets are experiencing a fresh bout of risk aversion," said Matthew Sherwood, Sydney-based head of investment markets research at Perpetual Ltd, which manages about $29 billion. “There was scant new regional data on the economic and earnings front, which means justifying current valuations is the main concern for investors."
Japan’s Topix index slid 0.3% as the yen rose. The yen strengthened to 101.06 to the dollar after the Tokyo bourse closed. Mazda sank 2.4% to 411 yen. Canon Inc., a camera maker that gets more than half of its sales outside Japan, retreated 1.3% to 3,296 yen.
Trade deficit
The nation posted a trade deficit of 808.9 billion yen ($8 billion) for April, data showed on Wednesday. Economists surveyed by Bloomberg had predicted a 646.3 billion yen shortfall. Exports gained 5.1% year on year, while imports increased 3.4%, both topping expectations.
The BOJ refrained from boosting stimulus as the economy shows signs of weathering the impact of the first sales-tax increase since 1997. The central bank will continue to expand the monetary base at a pace of 60 trillion yen to 70 trillion yen per year, it said in a statement on Wednesday in Tokyo, in line with forecasts of all 32 economists in a Bloomberg survey.
The BOJ’s monetary stimulus and government spending by Prime Minister Shinzo Abe drove a world-beating 51% jump in the Topix last year. The measure has fallen 12% in 2014, the largest decline among 24 developed markets tracked by Bloomberg, amid concern the stimulus measures won’t be enough to revive the economy and generate inflation.
Confidence slumps
Australia’s S&P/ASX 200 Index added 0.1%. South Korea’s Kospi index slipped 0.1% and New Zealand’s NZX 50 Index fell 0.5%. Singapore’s Straits Times Index slid 0.1%, and India’s S&P BSE Sensex Index slipped 0.3%.
The Hang Seng China Enterprises Index of mainland Chinese equities listed in Hong Kong surged 1.1% and the Shanghai Composite Index climbed 0.8% as speculation that state- linked investors are buying equities offset concern that the economy is slowing. Hong Kong’s Hang Seng Index closed little changed and Taiwan’s Taiex Index lost 0.3%.
Futures on the Standard and Poor’s 500 Index added 0.2% on Wednesday after the US benchmark gauge fell 0.7% on Tuesday.
The Asia-Pacific gauge traded at 12.7 times estimated earnings on Tuesday, compared with 15.9 for the S&P 500 and 15.1 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Mining companies sank. Fortescue Metals retreated 2.4% to A$4.43. BHP Billiton Ltd sank 0.8% to A$37.17 and Rio Tinto Group declined 1.1% to A$59.40. The spot price of iron ore at China’s Tianjin port fell 1% on Wednesday to $97.50 a dry metric tonne, the lowest level since September 2012, according to data from The Steel Index Ltd.
Wine takeover
Treasury Wine Estates Ltd climbed 5.6% to A$5.07. The world’s second-largest listed wine company rose a second day amid speculation the Melbourne-based maker of Penfolds Grange will attract higher offers after rejecting a takeover from KKR and Co.
Lenovo Group Ltd gained 3.4% to HK$9.44 in Hong Kong after the world’s largest maker of personal computers reported an increase in full-year profit.
Japan Petroleum rose 8% to 4,200 yen as SMBC upgraded the shares, citing contributions from overseas and curbs on exploration costs.
Great Wall Motor Co. advanced 3.5% to HK$29.65 in Hong Kong. Shares of the sport-utility vehicles maker have risen since it said 19 May that it would set up a vehicle production base in Russia. Bloomberg
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