By Yoshiaki Nohara & Anna Kitanaka - Dec 21, 2012 7:22 AM GMT+0400
Asian stocks fell, with the regional benchmark index heading for the first two-day loss in five weeks, after U.S. House Republican leaders canceled a planned vote that would permit higher taxes amid stalled budget talks.
Techtronic Industries Co. (669), a maker of power tools that gets 72 percent of its sales in North America, dropped 1.5 percent in Hong Kong. Samsung Electronics Co. (005930), the world’s biggest maker of smartphones and TVs, dropped 3.7 percent in Seoul as it faces a European Union antitrust complaint. Mitsubishi Estate Co. rose 3 percent, pacing gains among Japanese realtors, on a report that the Bank of Japan is likely to adopt an inflation target in January.
Investors monitor prices and trade stocks at a securities exchange hall in Shanghai, China. Asia’s benchmark equities index has risen about 14 percent this year as central banks around the world boosted stimulus and on signs of recovery in the U.S. and China. Photographer: Qilai Shen/Bloomberg
The MSCI Asia Pacific Index slipped 0.4 percent to 128.74 at 12:20 p.m. in Tokyo, reversing an earlier gain of as much as 0.6 percent that was driven by reports which added to signs the U.S economy is recovering. The measure has gained 1 percent this week, heading for a fifth weekly advance.
“It’s cutting it quite close, and the pressure is definitely on the politicians,” said Shane Oliver, Sydney-based head of strategy at AMP Capital Investors Ltd., which has almost $130 billion under management. “If they go off the fiscal cliff, the U.S. economy could go into a recession. At stake is the U.S. economy and by implications the global economy.”
Asia’s benchmark equities index has risen about 13 percent this year as central banks around the world boosted stimulus and on signs of recovery in the U.S. and China. The gauge traded at 14.6 times average estimated earnings compared with 13.9 for the Standard & Poor’s 500 Index and 12.8 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Nikkei, Kospi
Japan’s Nikkei 225 Stock Average (NKY) fell 0.3 percent with trading volume 88 percent above the 30-day average as the yen advanced against all of its 16 major counterparts. The MSCI Asia Pacific Excluding Japan Index declined 0.8 percent.
South Korea’s Kospi Index fell 1.1 percent. The nation may get a growth boost next year as incoming president Park Geun Hye abandons fiscal restraint and increases spending on welfare.
Australia’s S&P/ASX 200 lost 0.5 percent and New Zealand’s NZX 50 Index slipped 0.1 percent. Hong Kong’s Hang Seng Index (HSI) fell 0.8 percent, while China’s Shanghai Composite Index dropped 0.5 percent. Taiwan’s Taiex Index declined 1.2 percent and Singapore’s Straits Times Index slid 0.3 percent.
Futures on the S&P 500 index fell 1.7 percent today after the gauge gained 0.6 percent yesterday. House Republican leaders canceled a planned vote on Speaker John Boehner’s plan to allow higher tax rates for annual income above $1 million amid stalled budget talks.
Home Sales
Exporters to the U.S. dropped, with Techtronic falling 1.5 percent to HK$14.70. James Hardie Industries SE (JHX), a building- materials supplier that gets 67 percent of sales from the U.S., dropped 2.4 percent to A$9.13 in Sydney. Canon Inc. (7751), a camera maker that depends on the Americas for 27 percent of its revenue, lost 0.9 percent to 3,325 yen in Tokyo after gaining as much as 1.6 percent.
Stocks gained earlier after purchases of existing houses increased 5.9 percent to a 5.04 million annual rate, the most since November 2009, the National Association of Realtors said yesterday. The data reinforces forecasts that the industry is set to contribute to annual economic growth for the first time since 2005.
Separately, the U.S. economy grew at a 3.1 percent annual rate in the third quarter, more than previously reported, according to Commerce Department figures released yesterday.
“The U.S. data has been very good and it all points toward reasonable growth going forwards,” said Oliver at AMP Capital. “We have a tug of war in the share markets, with the flow of positive economic data against the concerns about the fiscal cliff.”
Samsung Drops
Samsung dropped 3.7 percent to 1,447,000 won in Seoul after the EU’s competition commissioner said yesterday it faces a complaint over its use of standard-essential patents in legal disputes with Apple Inc. The two companies are fighting each other in courts on four continents over patents used in mobile phones.
Japan’s realtors advanced as the Nikkei newspaper reported the Bank of Japan will probably adopt an inflation target in January, citing its interpretation of public comments made yesterday by Governor Masaaki Shirakawa. The central bank expanded its asset purchases yesterday at its first meeting after the Liberal Democratic Party that calls for more aggressive monetary easing reclaimed power in the Dec. 16 election.
Mitsubishi Estate gained 3 percent to 1,900 yen and Sumitomo Realty & Development Co. added 3.7 percent to 2,662 yen. Tokyo Tatemono Real Estate Sales Co. surged 17 percent to 336 yen.
Billabong International Ltd. (BBG) gained 2.5 percent to 82 Australian cents after Chief Financial Officer Craig White left the Australian surf-wear maker yesterday as the board considers a A$527 million ($551 million) takeover offer.
Ju Teng International Holdings Ltd., a maker of notebook computer casings, gained 3.6 percent to HK$3.47 in Hong Kong after saying it expects an increase in full-year profit.
To contact the reporters on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net; Anna Kitanaka in Tokyo at akitanaka@bloomberg.net
