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Monday, 17 September 2012
Asian Stocks Outside Japan Fall on Europe Crisis, U.S
By Adam Haigh and Yoshiaki Nohara - Sep 18, 2012 8:58 AM GMT+0400
Asian stocks excluding Japan fell on concern Europe’s debt crisis remains unresolved and theU.S. economy is slowing. Gains in Japanese stocks were limited on concern a dispute between China and Japan is worsening.
BHP Billiton Ltd. (BHP), the world’s largest mining company, slid 0.8 percent in Sydney. Fast Retailing Co. (9983), Asia’s biggest apparel chain, dropped 5.3 percent in Tokyo as it was forced to shut stores in Beijing amid anti-Japanese protests. Hokuriku Electric Power Co., a Japanese operator of nuclear power plants, surged 5.8 percent as a government minister signaled he has no plans to stop construction of nuclear reactors. Fortescue Metals Group Ltd. (FMG) surged 21 percent after Australia’s third-biggest iron-ore producer arranged $4.5 billion of new debt to refinance bank loans.
The MSCI Asia Pacific (MXAP) excluding Japan Index lost 0.3 percent to 440.46 as of 1:54 p.m. in Tokyo, with about three stocks dropping for every two that rose. The MSCI Asia Pacific Index was little changed at 123.33. Japanese equity markets reopened today after a public holiday.
“There are still a number of areas of concern,” Tim Schroeders, who helps manage about $1 billion at Pengana Capital Ltd. in Melbourne, said in a telephone interview. “Investors will become increasingly nervous if a policy response doesn’t materialize in China. There’s still tensions between European partners in terms of what shape and form the ultimate rescue takes. The devil lies in the detail.”
The MSCI Asia Pacific Index rose more than 8 percent this year through yesterday compared with a 16 percent gain on the S&P 500 and a 12 percent advance for the Stoxx Europe 600 Index amid speculation central banks will step up measures to promote global economic growth. The Asian benchmark traded at 12.8 times estimated earnings compared with 14.1 for the S&P 500 and 12.2 for the Stoxx Europe 600 Index.
Japan’s Nikkei 225 Stock Average (NKY) slid 0.1 percent, South Korea’s Kospi Index was little changed and Australia’s S&P/ASX 200 Index fell 0.1 percent. Hong Kong’s Hang Seng Index slipped 0.1 percent and China’s Shanghai Composite lost 0.6 percent.
Futures on the Standard & Poor’s 500 Index added 0.1 percent today. The index fell 0.3 percent in New York yesterday, when the Federal Reserve Bank of New York said its general economic index of manufacturing dropped to minus 10.41, the lowest reading since April 2009, from minus 5.85 in August. The median forecast of 53 economists in a Bloomberg News survey called for minus 2. Readings less than zero signal contraction in the so-called Empire State Index that covers New York, northern New Jersey and southern Connecticut.
European Central Bank Governing Council member Luc Coene said rising bond yields may force Spain into asking for aid and submitting to the ECB’s conditions for granting it. Spanish bond yields climbed past 6 percent yesterday for the first time since Sept. 7, the day after ECB President Mario Draghi gave details of the central bank’s new government bond purchase plan.
If “markets see that Spain will not” ask for assistance, “then it will not last long before spreads will rise again, and then Spain will be somewhat forced to come back on its decision and submit to the conditionality program,” Coene said at a panel discussion in London yesterday.
BHP Billiton fell 0.8 percent to A$33.89. Rio Tinto Ltd. slid 0.2 percent to A$57.37. The London Metal Exchange Index of industrial metals lost 0.8 percent yesterday.
Japanese companies that do business in China dropped as a territorial dispute sparked the worst diplomatic crisis between the two nations since 2005, putting at risk a trade relationship that’s tripled in the past decade to more than $340 billion.
Honda Motor Co. (7267) slid 2.2 percent to 2,612 yen. Nissan Motor Co., the biggest Japanese automaker by sales in China, sank 3.9 percent to 709 yen. Fast Retailing sank 5.3 percent to 17,790 yen after shutting 42 of its Uniqlo apparel shops in China amid protests.
Japanese utilities gained the most among 33 industry groups on the Topix Index (TPX) after the Nikkei newspaper reported Japanese Trade Minister Yukio Edano signaled he has no plans to stop construction of reactors that have already been approved, despite a goal to scrap nuclear power by the end of the 2030s.
Hokuriku Electric soared 5.8 percent to 912 yen. Tohoku Electric Power Co. jumped 3.9 percent to 533 yen.
Fortescue jumped 21 percent to A$3.61 as a new debt arrangement eased concern the Perth-based company may need to sell assets or stock to repay debt.
Sony Corp. (6758), Japan’s biggest exporter of consumer electronics, gained 4.8 percent to 1,030 yen after public broadcaster NHK reported on Sept. 14 the company will invest about 50 billion yen ($636 million) in Olympus Corp. and set up a company to manufacture medical equipment.