Sunday, 11 November 2012

Asia Stocks Drop as Shrinking Japan GDP Overshadows China

By Adam Haigh and Jason Clenfield - Nov 12, 2012 8:19 AM GMT+0400

Asian stocks fell, with the regional benchmark index headed for its lowest close in a month, after Japan’s economy shrank at the fastest pace since last year’s earthquake, overshadowing an acceleration in China’s exports.
Fast Retailing Co., Asia’s biggest clothing retailer, slipped 0.5 percent after Japan’s growth data.QBE Insurance Group Ltd. (QBE) sank 7.9 percent, the most in 11 months, after Australia’s No. 1 insurer by market value said it will issue debt due to losses from U.S. super storm Sandy. Li & Fung Ltd., a supplier of clothes and toys to Wal-Mart Stores Inc., climbed 1 percent as China’s exports grew at the fastest rate since May.
The MSCI Asia Pacific Index (MXAP) lost 0.2 percent to 121.06 as of 1:07 p.m. in Tokyo. About two shares fell for each two that rose. The gauge gained 11 percent through Nov. 9 from this year’s low on June 4 as central banks added stimulus to spur growth and data showed a slowdown in China may be bottoming.
“I don’t think anyone’s relying on a massive pickup in Japanese growth to drive things,” saidAngus Gluskie, managing director at Sydney-based White Funds Management, which oversees more than $350 million. “If the data continues to deteriorate, it becomes another problem area and it will come on to investors’ radar screens.”
The MSCI Asia Pacific gauge traded at 13.3 times estimated earnings as of Nov. 9, comparedwith 13.3 for the Standard & Poor’s 500 Index and 12.1 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Another Recession

Japan’s Nikkei 225 Stock Average (NKY) lost 0.7 percent as a report showed gross domestic product shrank an annualized 3.5 percent in the three months through September. The median of 23 analysts’ estimates in a Bloomberg News survey was for a 3.4 percent contraction. Economists are forecasting a second straight quarter of contraction through December, meeting the technical definition of a recession.
Australia’s S&P/ASX 200 Index slid 0.1 percent and South Korea’s Kospi Index dropped 0.3 percent. Taiwan’s Taiex Index slipped 0.2 percent and Singapore’s Strait Times lost 0.1 percent.
Hong Kong’s Hang Seng Index rose 0.2 percent and China’s Shanghai Composite climbed 0.1 percent, with Li & Fung advancing 1 percent to HK$12.50. Geely Automobile Holdings Ltd. led carmakers higher in Hong Kong, gaining 4.2 percent to HK$3.75 after Chinese passenger-vehicle sales increased in October.

China Exports

China’s overseas shipments increased 11.6 percent from a year earlier, the Beijing-based customs administration said in a statement today. That compared with the 10 percent estimate in a Bloomberg News survey of economists. Imports rose 2.4 percent, the same pace as the previous month. The trade surplus widened to $32 billion, the biggest in almost four years.
New yuan loans in China fell 14 percent in October from a year earlier, Beijing-based People’s Bank of China said on its website today.
Futures on the Standard & Poor’s 500 Index were little changed after slipping as much as 0.2 percent earlier today. The S&P 500 posted its biggest weekly decline since June last week as President Barack Obama’s re-election set up a budget showdown with the Republican-controlled House of Representatives.
Lynas Corp. (LYC), builder of the world’s biggest rare-earth refinery in Malaysia, fell 8.1 percent to 74 Australian cents in Sydney after selling A$150 million ($156 million) of new shares.
QBE retreated 7.9 percent to A$11.85, the biggest drop since January. The insurer said its profit margin will drop to around 8 percent this year, down from an August forecast for better than 12 percent. Losses from Sandy total $350 million to $450 million, QBE said in a statement today.
Equity-trading volume was lower than average for the time of day, with 27 percent fewer shares trading hands on Japan’s Nikkei 225 and 41 percent less on the Hang Seng, according to data compiled by Bloomberg.
To contact the reporters on this story: Adam Haigh in Sydney at; Jason Clenfield in Tokyo at
To contact the editor responsible for this story: Nick Gentle at