Singapore/Hong Kong: Canon Inc. was set for its biggest drop in three weeks on concern demand for its digital cameras will falter as the economy slows in the region’s biggest export market. All 10 industry groups making up the Morgan Stanley Capital International Asia- Pacific Index retreated as benchmarks in South Korea, China, Australia and New Zealand fell from records.
“The U.S. economy remains the key to Asian exporters’ profitability,’’ said Barro Liao, who helps manage $2.7 billion (Rs11,097 crore) at PCA Securities Investment Trust Co. in Taipei. “Reports pointing to doubts over U.S. growth are not encouraging.’’
BHP Billiton Ltd, the world’s largest mining company, posted its biggest drop in two weeks as copper and zinc declined. Casio Computer Co. plunged after the company missed its annual profit target. Taiwan Semiconductor Manufacturing Co. dropped after saying sales in April slipped from a year earlier.
MSCI’s Asia index lost 1% to 147.93 at 11:13 am in Tokyo, the most since 19 April , trimming its gains this week to 0.4%. All indexes fell in markets open for trading, with Japan’s Nikkei 225 Stock Average losing 1.4% to 17,493.33.
U.S. shares yesterday tumbled the most in almost two months, dragging the Standard & Poor’s 500 Index lower by 1.4% from a six-year high. Financial shares, led by Citigroup Inc. and JPMorgan Chase & Co. led declines.
Canon, the world’s No.1 digital-camera maker, slid 2% to 6,900 yen, the biggest drop since 19 April. North America accounted for 31% of Canon’s total revenue last business year. Samsung Electronics Co., South Korea’s largest exporter, lost 0.7% to 571,000 won. Samsung accounted for about 16% of South Korean exports last year.
A record 80% of U.S. retailers missed analysts’ estimates in April, according to Retail Metrics Inc. The government will release its April retail sales report today.
Meanwhile, gains in the cost of crude oil spurred a 1.3% increase in the import price index, the Labour Department said, exceeding the 1% rise expected by economists in a Bloomberg News survey. The trade deficit rose 10.4% to $63.9 billion in March, more than a $60 billion deficit estimated by economists surveyed by Bloomberg.
“The weak U.S. economic data was the trigger for today’s drop,’’ said Seiichiro Iwamoto, who oversees $260 million at Fuji Investment Management Co. in Tokyo. “Shares have been making big gains globally so the correction may last a while.’’
Metals Prices Slide
Hon Hai Precision Industry Co., Taiwan’s biggest electronics exporter by sales, fell 1.2% to NT$238. AU Optronics Corp., the world’s third-largest LCD maker, declined 2.6% to NT$51.60. Venture Corp., Singapore’s largest maker of electronics for companies such as Hewlett-Packard Co., slid 2.6% to S$15.
BHP Billiton lost 2.7% to A$30.94, set for its biggest loss since 27 April. Rio Tinto Group, the world’s third- largest mining company, declined 1.6% to A$90.46. Jiangxi Copper Co., China’s largest publicly traded producer of the metal, fell 1.9% to HK$11.40 in Hong Kong.
A measure of six metals traded on the London Metal Exchange dropped 1.7% yesterday, its third straight decline. Copper fell 2% on signs demand may slow in China, the world’s largest user of the metal used in pipes and wire. Zinc slid 2%.
“The outlook for commodities prices is far less certain than many investors believe, which is why we try to stay away from resources stocks especially,’’ said Geoff Wilson, who helps manage $385 million at Wilson Asset Management in Sydney.
Casio, the world’s largest maker of digital watches, slid 16% to 2,035 yen, set for the biggest tumble since March 1975. The company said yesterday net income rose 5.9% to 25.1 billion yen ($209 million) for the year ended 31 March. Profit missed the company’s own target of 27.5 billion yen amid price declines for liquid-crystal displays.
Hisashi Moriyama, an analyst at JPMorgan Securities Japan Co., lowered his rating on the shares to “neutral’’ from “overweight.’’ He also cut the 12-month share-price target to 2,500 yen from 3,000 yen.
Earnings growth at Tokyo-based Casio will “remain muted in the near term,’’ Moriyama wrote in a report today.
Taiwan Semiconductor, the world’s largest supplier of made- to-order chips, slipped 1.3% to NT$67.60. The company yesterday said sales in April fell 17.1% from a year earlier to NT$22.5 billion ($676.6 million).
Taiwan Semiconductor on 26 April reported a 42% slide in first-quarter net income on lower chip orders.