Singapore: Asian stocks fell for the first time in six days, led by exporters, banks and mining companies, on concern global interest rates will rise further.
The Morgan Stanley Capital International Asia-Pacific Index retreated from a record high, led by Nissan Motor Co. and Samsung Electronics Co., after US labour costs rose more than economist forecasts. Commonwealth Bank of Australia dropped after the government said May employment rose almost four times as much as economists estimated, suggesting borrowing costs may increase.
“We are moving into a phase whereby long-term interest rates will go a lot higher,” said Chua Soon Hock, who manages about $400 million (Rs1,640 crore) at Asia Genesis Asset Management Pte in Singapore. “You need to be defensive and preserve your capital.”
China’s CSI 300 Index rose 2.2%, the biggest advance among regional benchmarks. China Minsheng Banking Corp. climbed after the Shanghai Securities News said speculation the government will tax capital gains from stock transactions was “ridiculous”.
The MSCI Asia-Pacific index lost 0.1% to 153.09 as of 2:38pm in Tokyo, snapping a five-day, 3.3% rally. BHP Billiton Ltd led mining shares lower after metals prices fell, while energy shares including Cnooc Ltd. tracked crude oil higher.
Japan’s Nikkei 225 Stock Average slid 0.1% to 18,028.52. Trading companies advanced after Nikko Citigroup Ltd raised its rating on shares of Sumitomo Corp. and Marubeni Corp. Benchmarks slid elsewhere across the region, except in Taiwan, South Korea, India and Thailand.
US stocks fell on Wednesday, sending the Standard & Poor’s 500 Index 0.9% lower. European shares dropped the most in two months after European Central Bank policy makers raised the benchmark rate by a quarter-point to 4% and signalled borrowing costs may climb further. The two regions are Asia’s largest export markets.
Interest rates in the US, Europe, Australia and the UK are at six-year highs and at a record in New Zealand. The US Federal Reserve has kept its target rate for overnight loans between banks at 5.25% since previous increase in June last year. Nissan, which made more than 40% of its sales in North America last year, slid 2.3% to 1,335 yen. Samsung Electronics, Asia’s largest maker of chips and mobile phones, dropped 0.7% to 567,000 won.
The US government’s measure of labour costs rose 1.8% last quarter, triple the rate initially estimated and higher than the 1.3% expected by economists surveyed by Bloomberg News. Federal Reserve Bank of Cleveland president Sandra Pianalto on Wednesday joined Fed chairman Ben S. Bernanke in warning that prices are rising too quickly.