Thursday, 25 July 2013

Asian Stocks Fall as Topix Slides on Earnings; Gas Climbs

By Jae Hur & Adam Haigh - Jul 26, 2013 10:14 AM GMT+0400
Asian stocks fell, with the regional benchmark index trimming a fifth weekly advance, as Japanese shares dropped amid disappointing earnings. European equity-index futures rose while gasoline rebounded.
The MSCI Asia Pacific Index slid 0.7 percent to 135.22 as of 7:04 a.m. in London, paring its climb in the week to 0.2 percent. Japan’s Topix index plunged the most since June 13. Euro Stoxx 50 futures climbed 0.6 percent and contracts on the Standard & Poor’s 500 Index added 0.1 percent. The yen advanced a second day against the dollar, while the won rose 0.4 percent. Gasoline futures climbed 0.2 percent, snapping a two-day loss, and gold added 0.2 percent.
Asian Stock Futures Fall as Samsung Reports While Yen Holds Gain An electronic board displaying stock figures is reflected on a glass window as a security guard is silhouetted walking through Japan Exchange Group Inc.'s Tokyo Stock Exchange in Tokyo. Photographer: Kiyoshi Ota/Bloomberg
July 25 (Bloomberg) -- James Bianco, president of Bianco Research LLC, talks about the stock market, second-quarter corporate earnings, and the indictment of SAC Capital Advisors LP by a U.S. grand jury. He speaks with Betty Liu, Dominic Chu and Julie Hyman on Bloomberg Television's "In the Loop." (Source: Bloomberg)
July 26 (Bloomberg) -- Koji Endo, an analyst with Advanced Research Japan in Tokyo, talks about the outlook for Japan's automakers and their South Korean competitors. Nissan led Japanese automakers in reporting higher earnings as the weaker yen gave them an edge over South Korea’s Hyundai Motor Co., which posted a drop in profit for a third straight quarter. Endo speaks with Zeb Eckert on Bloomberg Television's "On the Move." (Source: Bloomberg)
Asian Stocks Fall as Japan Slips While Yen Holds Gain After Data
Japanese 10,000 yen banknotes are arranged for a photograph in Kawasaki, Kanagawa Prefecture, Japan. Photographer: Akio Kon/Bloomberg
Samsung Electronics Co., the largest smartphone maker, posted disappointing profits and Advantest Corp. had a wider-than-estimated loss. Of companies on MSCI’s Asian gauge that have reported results this month, 57 percent exceeded profit estimates and 52 percent missed revenue forecasts. China ordered companies to cut production capacity this year. Federal Reserve policy makers meet next week, and the U.S. will report on economic growth and employment.
“Considering profit margins are pretty elevated and valuations are fair, there isn’t a tremendous upside to the equity market now unless you get earnings coming through,” Chad Padowitz, the Melbourne-based chief investment officer at Wingate Asset Management, said by phone in Sydney. “There’s not a massive amount of risk appetite out there.”

Topix, Kospi

MSCI’s regional index was poised for a five-week gain, the longest such winning streak since January, and is up 4.5 percent on the year. Toyota Motor Corp., a Japanese carmaker that gets 31 percent of its revenue in North America, declined 3.6 percent as the yen rose. Advantest slumped 9.7 percent after posting a 3.6 billion yen ($36 million) quarterly loss.
The Topix sank 2.9 percent. Japanese consumer prices rose the most since 2008 in June, data today showed, signaling the second-largest Asian economy may be emerging from deflation.
The Kospi gauge in Seoul added 0.1 percent, while Australia’s S&P/ASX 200 Index gained 0.2 percent.
Samsung lost 0.9 percent after posting net income of 7.58 trillion won ($6.8 billion) for last quarter, versus an average analyst estimate of 8.02 trillion won.
Posco, a South Korean company that’s Asia’s fourth-biggest steelmaker by output, had a 51 percent drop in second-quarter profit yesterday, missing estimates. Japan’s Nissan Motor Co. posted a 14 percent increase in second-quarter net income yesterday, while Korea’s Hyundai Motor Co.’s profit fell for a third-straight quarter.

Yen Rallies

Hong Kong’s Hang Seng Index rose 0.1 percent, while the Shanghai Composite Index slid 0.3 percent. China, which reports industrial profit data tomorrow, directed more than 1,400 companies in industries from steelmaking to papermaking to cut excess capacity by year-end, according to a statement posted on the Ministry of Industry and Information Technology’s website yesterday.
The yen climbed 0.6 percent at 98.67 per dollar, poised for a 2 percent advance in the week. The won strengthened to 1,111.33 per dollar, up 0.9 percent this week.
Global stocks have been see-sawing as investors examine U.S. economic data to try and gauge when the Federal Reserve will start to curb its $85 billion-a-month in bond buying. Annual gross domestic product in the U.S. probably grew 1 percent between April and June, from an expansion of 1.8 percent in the previous three months, according to the median estimate in a Bloomberg News survey of economists. Nonfarm payrolls likely expanded by 184,000, another poll showed.

Fed Purchases

The Fed will start trimming purchases in September, according 50 percent of economists surveyed by Bloomberg. Fed Chairman Ben S. Bernanke said last week it is “way too early to make any judgment” as to whether policy makers will start tapering purchases that month. The central bank has said economic data will determine the timing and pace of any reduction in the quantitative easing program.
Data in the U.S. yesterday showed bookings for durable goods meant to last at least three years rose 4.2 percent, three times the median forecast of economists. Another report showed claims for jobless benefits rose by 7,000 to 343,000 in the period ended July 20.
Yields on 10-year Treasuries were little changed at 2.58 percent, after dropping two basis points, or 0.02 percentage point, yesterday.
Gold rose to $1,337.01 an ounce and is up 3.2 percent in the week. Russia and Kazakhstan expanded their gold reserves for a ninth-straight month in June as purchases slowed amid a price slump.
West Texas Intermediate crude was down 0.1 percent at $105.37 a barrel in New York. Crude is down 2.5 percent this week, set for the first five-day drop this month. Gasoline futures rallied from a two-week low, trading at $3.024 a gallon.
The cost of insuring corporate and sovereign bonds against non-payment in Australia rose, according to traders of credit-default swaps. The Markit iTraxx Japan index fell 0.5 basis points to 98.5 basis points as of 9:28 a.m. in Tokyo, according to Citigroup Inc. prices. The gauge is set to fall for the first time in three days, according to CMA.
To contact the reporters on this story: Jae Hur in Tokyo at; Adam Haigh in Sydney at
To contact the editor responsible for this story: Rocky Swift at