By Chen Shiyin and Stuart Kelly, Bloomberg
Singapore: Asian stocks fell to a more than one-week low after China curbed bank lending and the US economy expanded at the slowest pace in four years.
China Mobile Ltd., the world’s largest mobile-phone operator, fell for a fourth day after China ordered banks to set aside 11 % of deposits as reserves to prevent the economy from overheating. Taiwan Semiconductor Manufacturing Co., the biggest maker of customized computer chips, slid after a report showed US GDP rose less than analysts estimated.
“You’ve bad news coming out of the world’s biggest economy as well as one of the fastest growing, which is enough to make investors anywhere pause for thought,” said Michael Birch, who helps manage $133 million at Wallace Funds Management in Sydney.
ICICI Bank Ltd., India’s most valuable lender, posted its biggest fall in three years on concern a planned Rs200 billion ($4.9 billion) stock sale will reduce returns for investors as profit growth slows. Aluminum Corp. of China Ltd., its biggest maker of the metal, known as Chalco, jumped threefold on its trading debut in Shanghai.
The Morgan Stanley Capital International Asia-Pacific excluding Japan Index lost 0.5 % to 427.64, the lowest since 19 April. The measure has gained 4.6 % this month, poised for its biggest monthly advance since November.
Taiwan’s Taiex index slid 1.3 %, while Hong Kong’s Hang Seng Index declined 1.1 %. Indexes fell elsewhere, except in Australia, New Zealand and Thailand. Japan’s market is closed today for a public holiday.
Taiwan Semiconductor, whose customers include Santa Clara, California-based Intel Corp., slid 1.5 % to NT$68. Samsung Electronics Co., which accounted for about 16 % of South Korean exports last year, lost 1.4 %. LG.Philips LCD Co., the world’s second-largest maker of liquid- crystal displays, dropped 1.3 %.
Shares fell after China’s banks were told to put aside 11 % of deposits starting 15 May up from 10.5 %, the seventh rise in 11 months. Growth in China, the world’s fastest- expanding major economy, accelerated to 11.1 % in the first quarter from 10.4 % in the previous three months, driven by a trade surplus that almost doubled to $46.4 billion.
US stocks fell on 27 April after the Commerce Department said the economy grew at an annual rate of 1.3 % last quarter. Economists expected a 1.8 % gain in GDP, according to the median of 83 forecasts in a Bloomberg News survey. Meanwhile, a measure of inflation watched by the Federal Reserve rose at a faster pace.
‘Unfavourable for Investments’
“Signs of possible slowing demand in both China and the US are unfavourable for investments,” said Dennes Chang, who helps manage $2.5 billion of assets at Jih Sun Securities Investment Trust Co. in Taipei.
China Mobile dropped 1.2 % to HK$71.35 in Hong Kong, adding to a three-day, 1.6 % loss. Industrial & Commercial Bank of China Ltd., the nation’s largest lender, fell 1.2 % to HK$4.29. China Life Insurance Co., the country’s biggest insurer, lost 2 % to HK$24.40.
ICICI slumped 7.6 %, set for its biggest drop since 17 May 2004. The bank said on 28 April, it plans to sell the equivalent of 20 % of its equity locally and overseas in June, the biggest sale by an Indian company.