Asia Stocks Fall as Japan’s Topix Posts Worst Week Since June

Apr 11, 2014 6:34 am ET

April 11 (Bloomberg) -- Asia’s benchmark stock index fell from an almost three-month high amid a renewed selloff of technology shares and as a gain in the yen yesterday dragged Japan’s Topix index to its worst week since June.

Fast Retailing Co., which comprises 9.5 percent of the Nikkei 225 Stock Average, tumbled 7.9 percent in Tokyo after Asia’s biggest clothing retailer cut its forecast for annual profit. Tencent Holdings Ltd. slid 6.8 percent in Hong Kong, with Asia’s No. 1 Internet company following yesterday’s rout in U.S. technology shares. Hong Kong Exchanges & Clearing Ltd. surged 12 percent, the most in more than five years, after an agreement to link Shanghai and Hong Kong markets.

The MSCI Asia Pacific Index declined 0.9 percent to 137.98 as of 6:33 p.m. in Hong Kong, with all but one of the 10 industry groups retreating. The weekly slump for Japanese equities is the biggest among 24 developed markets tracked by Bloomberg.

“Heightened risk aversion has resurfaced,” Matthew Sherwood, Sydney-based head of investment markets research at Perpetual Ltd., which manages about $25 billion, said in an e- mail. “There was no clear catalyst to spark such an aggressive sell-down. The key for investors is determining which stocks are overtly overvalued.”

Japan’s Topix slid 1.3 percent to a seven-month low as the yen traded at 101.53 per dollar after yesterday reaching its highest level in three weeks. The stocks gauge lost 6.7 percent since April 4. The Nikkei 225 declined 2.4 percent today, extending this week’s loss to 7.3 percent, the most since the five days after the 2011 earthquake.

Japan Rout

Fast Retailing tumbled 7.9 percent to 33,820 yen as the company’s billionaire President Tadashi Yanai said he doesn’t have an optimistic view about consumption in Japan. SoftBank Corp., a mobile-phone operator and Internet-company investor, fell 3.8 percent to 6,900 yen and was the biggest drag on the Topix today.

South Korea’s Kospi index retreated 0.6 percent. New Zealand’s NZX 50 Index lost 0.5 percent as Xero Ltd., a Wellington-based online-accounting software developer, slipped 5.3 percent to NZ$31.35, bringing its decline this week to 17 percent.

Hong Kong’s Hang Seng Index slid 0.8 percent and the Hang Seng China Enterprises Index of mainland stocks traded in the city declined 1.9 percent as falling producer prices signaled weakening economic growth. Tencent lost 6.8 percent to HK$525. The Shanghai Composite Index slipped 0.2 percent. Taiwan’s Taiex index retreated 0.5 percent and Singapore’s Straits Times Index declined 0.2 percent. India’s BSE S&P Sensex Index slid 0.4 percent.

China Exchanges

China’s plans to connect the stock exchanges of Hong Kong and Shanghai bolstered speculation the country will lure more investors. Stocks rallied on both venues yesterday after China said it would allow a combined 23.5 billion yuan ($3.8 billion) of daily cross-border trading. Hong Kong Exchanges advanced 12 percent to HK$146.

The Bloomberg China-US Equity Index of the most-traded Chinese stocks in New York fell 0.9 percent yesterday, fueled by declines of more than 4 percent in technology stocks including E-Commerce China Dangdang Inc., Vipshop Holdings Inc., Qihoo 360 Technology Co. and Sina Corp. American depositary receipts of Baidu Inc., owner of China’s most-used Internet search engine, fell 4.3 percent in New York.

Consumer Prices

A report today showed Chinese consumer prices rose 2.4 percent from a year earlier in March, after gaining 2 percent in February, matching the median of 55 economists’ estimates compiled by Bloomberg. The nation’s producer price index retreated 2.3 percent following the previous month’s 2 percent drop.

Futures on the Standard & Poor’s 500 Index rose less than 0.1 percent today. The measure lost 2.1 percent yesterday, the most since Feb. 3., as a technology selloff resumed amid concern valuations may be too high at the start of earnings season. The Dow Jones Internet Composite Index sank 4.2 percent in the U.S. session and the Nasdaq Biotechnology Index plunged 5.6 percent, the most since 2011.

The MSCI Asia Pacific Index traded at 12.5 times estimated earnings yesterday, compared with 15.6 for the S&P 500 and 14.6 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.