Asian Stocks Decline for Second Day as Material Producers Slide

Sep 05, 2014 8:01 am ET

Sept. 5 (Bloomberg) -- Asian stocks fell, with the regional benchmark index paring its weekly advance, as material and energy companies slid.

Newcrest Mining Ltd., Australia’s biggest gold producer, lost 3.2 percent after the price of bullion fell. Fortescue Metals Group Ltd., the nation’s third-largest iron ore miner, sank 3.2 percent after a gauge of prices for the raw material in China dropped. Oil explorer Inpex Corp. fell 1.9 percent in Tokyo as crude futures headed for the six weekly decline in seven weeks. Sekisui House Ltd. rose 2.2 percent after the homebuilder reported first-half net income increased.

The MSCI Asia Pacific Index slipped 0.4 percent to 148.24 as of 8 p.m. in Hong Kong, with three shares declining for every two that rose. The gauge posted a 0.2 percent advance for the week. Stocks climbed to a one-month high on Sept. 3 on reports showing faster growth in China’s service industries and U.S. manufacturing.

“We’re seeing a bit of profit-taking today following the recent rally,” Ryan Huang, a market strategist at IG Ltd. in Singapore, said by phone. “Investors are looking out for the U.S. jobs data due tonight and the Chinese exports data next week.”

South Korea’s Kospi index declined 0.3 percent. Australia’s S&P/ASX 200 Index slid 0.6 percent. India’s S&P BSE Sensex index, Hong Kong’s Hang Seng Index and Taiwan’s Taiex index and Singapore’s Straits Times Index each lost 0.2 percent.

Japan’s Topix index fell 0.3 percent as the yen pared its drop after touching an October 2008 low. China’s Shanghai Composite Index gained 0.9 percent, capping its biggest weekly advance since February 2013. New Zealand’s NZX 50 Index increased 0.5 percent.

The MSCI Asia Pacific Index traded at 13.8 times estimated earnings, compared with 16.7 for the Standard & Poor’s Index and 15.5 for Stoxx Europe 600 Index.

U.S. Futures

Futures on the S&P 500 slid 0.3 percent today. The U.S. equity benchmark slipped 0.2 percent yesterday as energy producers sank with oil prices to overshadow the ECB announcement.

U.S. data yesterday showed service providers such as retailers and construction firms expanded in August at the fastest pace in nine years, a sign of growing momentum in the broadest sector of the economy.

Applications for unemployment benefits were little changed last week, while a separate report indicated firms added fewer jobs in August than estimated. The Labor Department’s monthly jobs report is due today.

ECB Stimulus

The European Central Bank unexpectedly cut interest rates and said it will start buying assets, boosting the flow of funding for the euro-area economy while stopping short of broad- based quantitative easing. The move buoyed European stocks and sent bond yields negative.

“The ECB move is positive for the market,” said Angus Gluskie, managing director at White Funds Management in Sydney, where he helps oversee about $550 million. “The broader global economic outlook is reasonably positive. In the short term, it’s worth being cautious given prevailing geopolitical risks.”

Ukraine’s President Petro Poroshenko voiced “careful optimism” that talks with pro-Russian rebels in Minsk, Belarus, will set the course for a cease-fire after more than five months of fighting. After Poroshenko met with leaders of the North Atlantic Treaty Organization, the alliance’s Secretary General Anders Fogh Rasmussen said it’s too early to tell whether peace overtures by Russian President Vladimir Putin are genuine.

Energy and materials companies slid as gold and iron ore futures slipped, while crude oil headed for a 1.6 percent weekly decline. Newcrest Mining dropped 3.2 percent to A$10.59 in Sydney. Fortescue sank 3.2 percent to A$3.92. Inpex fell 1.9 percent to 1,499.5 yen in Tokyo.

‘Disciplinary Warning’

KB Financial Group Inc. decreased 1.9 percent to 41,800 won in Seoul after regulators issued a “disciplinary warning” to Lee Kun Ho, Chief Executive Officer of unit Kookmin Bank, and KB Financial Chairman Lim Young Rok over issues relating to changes in the bank’s computing system. Lee resigned yesterday.

China Hongqiao Group Ltd. tumbled 6.6 percent to HK$6.36 in Hong Kong after the aluminum-products maker said it plans to sell new shares to its controlling stockholder.

Artiza Networks Inc., which makes testing systems for phone networks, plunged 7.3 percent to 1,111 yen in Tokyo after projecting a slump in net income, capping a 25 percent decline on the week.

Among shares that gained, Sekisui House rose 2.2 percent to 1,338.50 yen in Tokyo after the homebuilder reported first-half net income increased to 42.2 billion yen ($401 million) from 34 billion yen a year ago.