Tokyo / Sydney: Asian stocks declined, dragging the MSCI Asia Pacific Index down by the most in three weeks, as raw material prices fell on Monday and Hong Kong enacted measures to curtail property speculation.
Mitsubishi Corp., a Japanese trading company that gets 39% of its sales from commodities, slumped 5.5%. Sun Hung Kai Properties Ltd sank 3.4% in Hong Kong after the city tightened down-payment requirements for luxury homes. Kawasaki Kisen Kaisha Ltd, Japan’s No. 3 shipping line, dived 6.4% after more than doubling its yearly loss forecast.
The MSCI Asia Pacific Index dropped 1.5% to 118.02 as of 7:18pm in Tokyo, set for the biggest slump since 2 October. The gauge has climbed 67% from a five-year low on 9 March amid signs government measures were helping the global economy out of its worst slump since World War II.
Markets slide: People pass a stock indicator in Tokyo. Japan’s Nikkei declined 1.5% on Tuesday. Koji Sasahara/AP
“We’re at a turning point,” said Diane Lin, a Sydney-based fund manager at Pengana Capital Ltd, which oversees around $1.1 billion. “The stimulus has been helpful in pulling economies out of recession, but markets have been taking it for granted that this will continue.”
Japan’s Nikkei 225 Stock Average declined 1.5%. Consumer lenders Aiful Corp. and Promise Co. lost at least 2% after an industry group said about 50% of customers may be rejected for additional loans.
Australia’s S&P/ASX 200 Index declined 1.6%, James Hardie Industries NV, the No. 1 seller of home siding in the US, fell 4.2% as US senators discussed cutting a tax credit for homebuyers. The Kospi Index lost 0.5% in Seoul with LG Innotek Co. slumping 8.4% after Credit Suisse Group AG downgraded the stock.
Among shares that gained, Chuo Mitsui Trust Holdings Inc. surged 7.9% in Tokyo, while Sumitomo Trust and Banking Co. added 1.8% after the Nikkei newspaper said both banks will merge in spring 2011.
Baidu Inc., the operator of China’s biggest search engine, sank 13% in US after-hours trading after forecasting fourth quarter revenue that missed analysts’ estimates.
Futures on the Standard and Poor’s (S&P) 500 Index were little changed. The US gauge declined 1.2% on Monday, led by financial companies after Richard Bove, a Rochdale Securities Llc analyst, said the government will force Bank of America Corp. to raise more capital before repaying the Troubled Asset Relief Program.
US stocks will drop painfully from current levels in the coming year amid disappointing economic data and profits as margins shrink, Jeremy Grantham, chief investment strategist at Grantham Mayo Van Otterloo and Co., wrote in a quarterly report.
Mitsubishi, Japan’s biggest trading house, dropped 5.5% to 1,962 yen. Woodside Petroleum Ltd retreated 2.5% to A$49.60 in Sydney. BHP Billiton Ltd, the world’s biggest mining company, fell 2.2% to A$38.85.
Crude oil for December delivery lost 2.3% to $78.68 a barrel in New York on Monday, the biggest drop since 24 September. Copper futures fell 0.8%, declining from the highest level in almost 13 months.
Sun Hung Kai Properties, Hong Kong’s No. 1 property developer by market value, fell 3.4% to Hong Kong dollars 118.20. Cheung Kong (Holdings) Ltd, the second biggest, slid 3%.
Down payments for homes priced above Hong Kong dollars 20 million ($2.6 million) will be raised to 40% from 30%, Hong Kong Monetary Authority chief executive Norman Chan said.
Kawasaki Kisen slumped 6.4% to 353 yen. Market leader Nippon Yusen KK fell 2.5% to 347 yen, while Mitsui OSK Lines Ltd lost 2.5% to 551 yen.
Kawasaki Kisen more than doubled its net-loss forecast for the year to March. Nippon Yusen widened its full-year loss forecast by more than fivefold, while Mitsui cut its annual earnings target by 93%.
LG Innotek, a maker of mobile-phone components, fell 8.4% to 115,000 won, the steepest decline in two months. Credit Suisse cut its recommendation to underperform from neutral, citing worse-than-expected earnings.
Stocks have rallied since March amid better-than-estimated economic and earnings figures. This month, reports showed an export decline slowed in China and US service industries grew for the first time in a year.
Amid signs the global economy is improving, Australia’s central bank unexpectedly raised its benchmark rate on 6 October and has signalled further increases in coming months.
After markets shut, Honda Motor Co., Japan’s No. 2 automaker, almost tripled its full-year earnings forecast as government stimulus measures spurred demand. Toshiba Corp., the nation’s biggest memory chipmaker, reported a narrower-than-forecast loss for the first half.
The MSCI Asia Pacific Index has risen 32% this year, set for the biggest annual gain since 2003. Stocks in the benchmark are valued at 23 times estimated earnings for this year, higher than the 17 times for the S&P 500 and 15 times for Europe’s Dow Jones Stoxx 600 Index, according to Bloomberg data.
Kana Nishizawa and Akiko Ikeda in Tokyo contributed to this story.