Asian Stocks

Asian Stocks Decline Third Day as China Production Slows

By Jonathan Burgos and Yoshiaki Nohara on May 11, 2012

Asian stocks slid for a third day, with the regional index capping its worst week in almost six months, as JPMorgan Chase & Co. revealed a $2 billion trading loss and China’s industrial output grew at a slower pace, while Indian factory production fell.

Industrial & Commercial Bank of China Ltd., the world’s biggest lender by

market value, dropped 1.4 percent in Hong Kong. Sony Corp. tumbled 6.4 percent in Tokyo, closing at its lowest in more than three decades, after the maker of Bravia televisions and PlayStation game consoles forecast half as much profit as analysts expected. Yamada Denki Co. slumped 8 percent after the electronics retailer said first-half profit will drop.

“The market is struggling to digest negative factors coming in one after another,” said Koichi Kurose, chief economist in Tokyo at Resona Bank Ltd., Japan’s fifth-largest lender by market value. “China’s economy doesn’t look good, judging from reports. There are strong expectations for quick monetary easing, but they can’t loosen regulations on real estate.”

The MSCI Asia Pacific Index (MXAP) declined 0.9 percent to 118.59 as of 5:50 p.m. in Tokyo, with more than three shares falling for each that rose. The measure is heading for 4.4 percent drop this week, the most since the period ended Nov. 25, as France’s political changes and instability in Greece threaten to derail austerity plans and worsen Europe’s debt crisis.

Australia’s S&P/ASX 200 Index slid 0.2 percent. South Korea’s Kospi Index (KOSPI) dropped 1.4 percent. Hong Kong’s Hang Seng Index decreased 1.3 percent, whie Japan’s Nikkei 225 Stock Average fell 0.6 percent.

China, India

China’s Shanghai Composite Index (SHCOMP) slipped 0.6 percent. The nation’s industrial output growth slowed to 9.3 percent last month from 11.9 percent in March, missing estimates, according to data released today by the government.

Chinese lenders fell. ICBC, as the world’s biggest bank is also known, dropped 1.4 percent to HK$4.89 in Hong Kong. China Construction Bank Corp. (939) fell 1.4 percent to HK$5.59.

India’s Sensitive Index swung between gains and losses as output at the nation’s factories unexpectedly contracted in March amid weaker domestic demand and exports.

Futures on the Standard & Poor’s 500 Index dropped 0.4 percent today as JPMorgan revealed a $2 billion trading loss on credit securities. The index rose 0.3 percent yesterday as weekly U.S. jobless claims fell to a month low, showing continued recovery in the labor market.

“Clearly JPMorgan got it wrong,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has almost $100 billion under management. “I suspect it’s probably a one-off, but it comes during a week where we’ve seen risk off in a big way.”

Sony, Yamada Denki

Sony sank 6.4 percent to 1,135 yen in Tokyo, the lowest close since August 1980. The company said profit this fiscal year may reach 30 billion yen ($376 million), about half of the average estimate of 18 analysts compiled by Bloomberg News.

Yamada Denki (9831) slumped 8 percent to 4,100 yen, the most on the MSCI Asia Pacific Index, after saying it expects first-half profit to drop 47 percent.

Of the 579 companies on the MSCI Asia Pacific Index that reported quarterly earnings since April 10, 224 exceeded analysts’s estimates, while 214 fell short of expectations, according to data compiled by Bloomberg News.

Exporters advanced after a report showed U.S. claims for unemployment benefits declined last week to the lowest level in a month, easing concern that the American labor market is faltering.

Nissan Motor Co. (7201), a carmaker that gets about one-third of sales from North America, climbed 3.3 percent to 804 yen in Tokyo. Honda Motor Co. gained 1.5 percent to 2,752 yen.

Toyota Tops GM

Toyota Motor Corp. advanced 2.1 percent to 3,235 yen. Asia’s largest automaker passed General Motors Co. to sell the most cars and trucks in the world in the first three months of the year, according to data compiled by Bloomberg.

The MSCI Asia Pacific Index rose 5.1 percent this year through yesterday, compared with an 8 percent gain by the S&P 500 and a 2.7 percent advance by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 12.2 times estimated earnings on average, compared with a multiple of 12.9 for the S&P 500 and 10.4 times for the Stoxx 600.