Asian Stocks Swing Between Gains, Losses on U.S., Europe Concern

January 11, 2012, 1:32 AM EST By Jonathan Burgos and Yoshiaki Nohara

Jan. 11 (Bloomberg) -- Asian stocks swung between gains and losses as optimism about the U.S. economy tempered concern Europe’s debt crisis is worsening ahead of a German bond sale.

James Hardie Industries SE, a supplier of building materials that gets most of its sales in the U.S., climbed 3 percent in Sydney. AU Optronics Corp., a supplier of liquid crystal displays to companies including Nokia Oyj and Dell Inc., gained 4.4 percent in Taipei. China Unicom (Hong Kong) Ltd. fell 3.3 percent amid concern competition will increase among mainland carriers.

“There are more positive signs particularly on employment and consumer,” spending in the U.S., said Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State Global Asset Management, which oversees about $150 billion. “The outlook in the U.S. is for modest growth this year, and that’s better than Europe. Expectations are Europe will be in a recession.”

The MSCI Asia Pacific Index slid 0.1 percent to 115.98 as of 2:30 p.m. in Tokyo, with five shares rising for every four that fell. The gauge advanced 0.9 percent last week as manufacturing growth from China to the U.S. bolstered confidence in the global economy.

Australia’s S&P/ASX 200 Index increased 0.9 percent. Hong Kong’s Hang Seng Index was little changed. Japan’s Nikkei 225 Stock Average rose 0.2 percent. South Korea’s Kospi Index lost 0.5 percent.

China Inflation

China’s Shanghai Composite Index decreased 0.6 percent, heading for its first decline in four days, on concern inflation will hamper the government’s ability to ease lending curbs. A report due to be released tomorrow will probably show consumer prices rose 4 percent in December.

Futures on the Standard & Poor’s 500 Index fell 0.2 percent today. The gauge rose 0.9 percent in New York yesterday as global equities rallied amid bets that China will ease monetary policy to spur growth in the world’s second-largest economy.

Exporters advanced as U.S. employers hired 4.15 million workers in November, 107,000 more than in the prior month, the Labor Department said yesterday. A survey by Chief Executive magazine showed confidence among American CEOs rose last month to the highest level since May.

--Editors: Nick Gentle, John McCluskey

To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net

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Asian Stocks Decline as Euro Weakens on Growth, Europe Concern

January 02, 2012, 2:42 AM EST By Shiyin Chen and Saeromi Shin

Jan. 2 (Bloomberg) -- Asian stocks declined on the first trading day of 2012, while the South Korean won and the euro weakened on concern that the global economic recovery will be hampered as Europe’s debt crisis enters a new year.

The MSCI Asia Pacific excluding Japan Index slipped 0.4 percent as of 3:08 p.m. in Singapore. Euro Stoxx 50 Index futures retreated 0.4 percent. Financial markets from Japan to the U.K. and the U.S. are closed for a holiday. The won fell 0.3 percent to 1,155.86 per dollar and the euro decreased 0.1 percent to $1.2941. Silver advanced as much as 0.2 percent to $27.8875 per ounce, set for a third day of gains.

Indexes of stocks and commodities had the worst yearly returns since the financial crisis in 2008. South Korea said yesterday export growth will slow this year and Singapore’s government said its economy grew less than previously forecast in 2011. Data today may confirm European manufacturing shrank for a fifth straight month, as regional leaders return to work from the Christmas holidays seeking to buy time to rescue the single currency from fragmentation.

“With many markets closed, it’s hard to make one-way bets especially in the absence of strong leads,” said Lim Chang Gue, a fund manager in Seoul at Samsung Asset Management Co., which oversees about $28 billion. “There’s the ongoing crisis in Europe, and global demand will continue to be generally weak this year. The thing is how much China could provide buffers, but it’s still unclear.”

More than three shares retreated for every one that rose on MSCI’s Asia Pacific ex-Japan Index. Taiwan’s Taiex Index sank 1.7 percent, Indonesia’s Jakarta Composite index dipped 0.3 percent and the BSE India Sensitive Index slid 0.5 percent, a fifth day of losses.

Korea, Singapore

South Korea’s export growth will probably slow to 6.7 percent this year from 19.6 percent in 2011, the Ministry of Knowledge Economy said yesterday. Finance Minister Bahk Jae Wan said the economic outlook will be more uncertain and difficult in 2012 and called for a strengthening of contingency plans to prevent contagion from Europe’s debt crisis.

Separately, Singapore’s Prime Minister Lee Hsien Loong said the island’s gross domestic product rose 4.8 percent in 2011, compared with the government’s earlier forecast of a 5 percent increase, and said the economy will expand 1 percent to 3 percent in 2012. Indonesia said exports grew 8.3 percent in November from a year earlier, slowing from an increase of 16.7 percent the previous month.

Data yesterday showed China’s purchasing managers’ index climbed to 50.3 in December from 49 in November, beating all forecasts in a Bloomberg News survey of 15 economists. A gauge of euro-region manufacturing was 46.9 in December from 46.4 the previous month, according to economists surveyed by Bloomberg News before Markit Economics releases the data today. A reading below 50 indicates contraction.

Europe’s Debt

The euro weakened against 11 of its 16 most actively traded peers. The currency weakened for a second year in 2011 and fell on Dec. 30 below 100 yen for the first time since June 2001. Some 157 billion euros ($203 billion) in debt will mature in the 17-member euro area in the first three months of 2012, according to UBS AG. By the end of that period, leaders have pledged to draft a stricter rulebook for controlling government spending. German Chancellor Angela Merkel and French President Nicolas Sarkozy will meet in Berlin Jan. 9 to work out details.

The Dollar Index, which tracks the U.S. currency against those of six major trading partners, rose 0.1 percent, the first increase in three days. It climbed 1.5 percent in 2011. Treasuries gained 9.78 percent last year, the most since 2008, as investors sought the relative safety of U.S. debt.

‘Wary’ Investors

“Investors are demanding dollars as they are wary of the ongoing European debt crisis,” said Ha Jun Woo, a Seoul-based currency dealer at Daegu Bank in Seoul.

The Institute for Supply Management’s factory index climbed to a six-month high of 53.4 in December, while spending on construction projects advanced 0.4 percent in November, the fourth straight monthly gain, economists surveyed by Bloomberg projected ahead of U.S. reports tomorrow. Payrolls climbed by 150,000 workers after rising 120,000 in November, according to the median forecast of 62 economists in a Bloomberg News survey before Labor Department data on Jan. 6.

--With assistance from Jiyeun Lee in Seoul. Editors: Richard Dobson, Ovais Subhani

To contact the reporters on this story: Shiyin Chen in Singapore at schen37@bloomberg.net; Saeromi Shin in Seoul at sshin15@bloomberg.net

To contact the editor responsible for this story: Richard Dobson at rdobson4@bloomberg.net

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Asian Stocks Edge Higher on Signs U.S. Weathering Europe Crisis

December 30, 2011, 12:37 AM EST By Yoshiaki Nohara and Norie Kuboyama

Dec. 30 (Bloomberg) -- Asian stocks edged higher on the last trading day of 2011, with the region’s benchmark index set for its first yearly drop since 2008, as rising U.S. home sales signaled the world’s largest economy is weathering Europe’s debt crisis.

Sony Corp., Japan’s biggest exporter of consumer electronics, gained 1.6 percent. Techtronic Industries Company Ltd., a maker of industrial products that gets about 73 percent of its revenue in North America, added 1.5 percent in Hong Kong. Cnooc Ltd., China’s largest offshore energy explorer, rose 0.9 percent after oil gained. Chiyoda Corp. gained 2.7 percent after a report operating profit may top the Japanese engineering company’s forecast.

The MSCI Asia Pacific Index added 0.2 percent to 113.02 as of 11:23 a.m. in Tokyo. The measure has lost 0.5 percent this month and is set for an 18 percent drop this year. For the week, the gauge is down 0.6 percent.

“Investors increasingly feel the U.S. economy is firmer than they had expected,” said Toshiyuki Kanayama, a market analyst at Tokyo-based Monex Inc. “The economic data is looking good and that will boost stock markets, especially when concern about Europe’s debt issues aren’t in the forefront.”

The Asia Pacific gauge has lost about $1.78 trillion this year amid concern Europe’s three-year debt crisis will drag the global economy into recession. Stocks on Asia’s benchmark are valued at 12.6 times estimated earnings on average, compared with 12.6 times for Standard & Poor’s 500 Index and 10.5 times for the Stoxx Europe 600 Index.

Fukushima Dai-Ichi

Utilities have fallen 27 percent this year, dropping the most among the 10 industry groups on the Asian gauge. Japanese power producers tumbled amid a nuclear crisis at Tokyo Electric Power Co.’s Fukushima Dai-Ichi plant. The utility has lost 91 percent this year, the biggest drop on the MSCI All Country World Index.

Japan’s Nikkei 225 Stock Average gained 0.3 percent today. Trading volume was about half the 100-day average ahead of a four-day weekend. Hong Kong’s Hang Seng Index rose 0.4 percent. Australia’s S&P/ASX 200 lost 0.3 percent. South Korea’s market is closed today for a holiday.

Futures on the S&P 500 Index slid 0.1 percent The gauge advanced 1.1 percent yesterday in New York after a report showed a jump in pending sales of existing homes that exceeded economist estimates by almost five times.

Sony, James Hardie

Exporters to the U.S rose. Sony added 1.6 percent to 1,376 yen in Tokyo, Techtronic Industries rose 1.5 percent to HK$8.04.

Gains in stocks may be limited after Italy yesterday fell short of its target in a debt auction. Prime Minister Mario Monti said his government won’t “rule out” more aggressive efforts to reduce debt.

“Markets will continue to be unstable for the first quarter of next year,” said Masaru Hamasaki, Tokyo-based chief strategist at Toyota Asset Management Co., which oversees the equivalent of $24 billion. “European nations will need to unite as they debate how to rehabilitate the region’s finances. The leadership will be tested.”

Cnooc rose 0.9 percent to HK$13.70. Crude oil for February delivery gained as much 0.2 percent on the New York Mercantile Exchange amid potential supply disruptions by Iran around the Strait of Hormuz and on optimism about the U.S. economy.

--Editors: Jason Clenfield, Jim Powell.

To contact the reporters on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net; Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.

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Asian Stocks Drop as U.S. Home Prices Slip; China Mengniu Falls

December 28, 2011, 6:06 AM EST By Yoshiaki Nohara

Dec. 28 (Bloomberg) -- Asian stocks fell for a second day amid slow trading, with the regional benchmark index headed for its biggest annual decline since 2008, after U.S. housing prices fell, damping the earnings outlook for Asia’s exporters.

Sony Corp., Japan’s No. 1 exporter of consumer electronics, dropped 2.4 percent. SK Telecom Co. paced declines among South Korean companies that went ex-dividend today. China Mengniu Dairy Co. plunged 24 percent after saying moldy feed given to cows led to excessive levels of a toxin in its milk. Tokyo Electric Power Co. fell to the lowest level in at least 37 years after Japan’s trade minister said the utility should consider temporary government control.

The MSCI Asia Pacific Index slipped 0.6 percent to 113 as of 7:41 p.m. in Tokyo, with all but one of the gauge’s 10 industry groups falling. For the month, the index is heading for a 0.5 percent decline. The measure has dropped 18 percent this year, the most since 2008.

“The U.S. housing market has yet to get on a firm recovery path because we don’t know if prices will actually come back,” said Naoteru Teraoka, general manager at Tokyo-based Chuo Mitsui Asset Management Co., which oversees about $29.6 billion. “Market participants are in vacation mode and aren’t doing much.”

Futures on the Standard & Poor’s 500 Index climbed 0.2 percent today. The gauge was little changed yesterday in New York as better-than-estimated U.S. consumer confidence overshadowed a decline in home prices and concern about Europe’s debt crisis.

‘No Incentive’

Japan’s Nikkei 225 Stock Average fell 0.2 percent after a report showed factory output fell 2.6 percent in November as Thailand’s floods disrupted supply chains at manufacturers such as Sony and Honda Motor Co. Trading volume on the Nikkei was 43 percent below the 100-day average.

“There’s no incentive for investors to move their positions at the end of year,” said Hisakazu Amano, who helps oversee the equivalent of $29 billion at Tokyo-based T&D Asset Management Co. “The bottleneck is U.S. housing data. Corporate earnings are recovering and consumer confidence was good.”

South Korea’s Kospi Index lost 0.9 percent. Yesterday was the last day to buy shares and still get a year-end dividend in 15 percent of the companies included in the 785-member gauge.

Australia’s S&P/ASX 200 lost 1.3 percent, while Hong Kong’s Hang Seng Index slid 0.6 percent. Markets in Australia and Hong Kong reopened today after a four-day weekend.

Exporters dropped after the S&P/Case-Shiller index of property values in 20 U.S. cities dropped 3.4 percent in the year ended October after decreasing 3.5 percent in the year ended September, the New York-based group said yesterday.

Sony fell 2.4 percent to 1,354 yen, and Canon Inc., the world’s biggest camera maker, slid 1.6 percent to 3,415 yen.

Going Ex-dividend

SK Telecom led declines among firms that have the highest dividend yields among South Korea’s 50 largest publicly traded companies, according to data compiled by Bloomberg. SK Telecom retreated 6.3 percent to 141,500 won. Rival KT Corp. slipped 4.8 percent to 35,850 won. Korea Exchange Bank fell 5.1 percent to 7,450 won.

China Mengniu Dairy plunged 24 percent to HK$20.00, the biggest loss since September 2008. In a random inspection, the level of a toxin in a batch of the firm’s milk was more than double the nation’s permitted level, an unidentified official at the General Administration of Quality Supervision, Inspection and Quarantine said in an interview with the Xinhua News Agency.

Tokyo Electric Plunges

Stocks in the Asian benchmark are valued at 12.6 times estimated earnings on average, compared with 12.8 times for the S&P 500 and 10.5 times for the Stoxx 600. Utilities have lost 27 percent this year, the worst among the 10 industry groups on the Asian benchmark gauge, as Japanese power generators tumbled after a nuclear crisis at Tokyo Electric Power Co.’s Fukushima Dai-Ichi plant.

Tepco, as the utility is known, slumped 12 percent to 186 yen today, the lowest since at least September 1974. The company needs to consider all options related to its survival, including the government taking temporary control of the utility, trade minister Yukio Edano told company president Toshio Nishizawa yesterday.

Tepco has lost 91 percent this year, the biggest drop in the MSCI All Country World Index, which includes both emerging and developed world markets.

--With assistance from Norie Kuboyama in Tokyo. Editors: Jason Clenfield, Jim Powell

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.

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Asian Stocks Decline in Holiday Trade as BOJ Warns of Downside

December 27, 2011, 2:40 AM EST By Yoshiaki Nohara

Dec. 27 (Bloomberg) -- Asian stocks fell amid slow holiday trading, with the regional benchmark headed for its worst year since 2008, as the Bank of Japan warned of downside risks to the economy and South Korean consumer confidence slid.

Nissan Motor Co., Japan’s third-largest carmaker by market value, fell 1.7 percent. Anhui Conch Cement led losses among Chinese industrial companies after a report profit growth slowed in the sector. Samsung Electro-Mechanics Co. fell 6.8 percent in Seoul after saying it will sell its stake in a light-emitting diode business for less than investors expected. Nishimatsu Construction Co. led gains among Japanese construction firms after a report the country will build three bullet train lines.

The MSCI Asia Pacific Index fell 0.3 percent to 113.59 as of 4:09 p.m. in Tokyo, with more than two stocks falling for each that rose. The measure is headed for an 18 percent loss this year, its biggest annual decline since 2008. Markets in Australia, New Zealand and Hong Kong are closed today.

“Economic uncertainty is deepening around the world, which is showing up in some Japanese statistics on exports and production,” said Hitoshi Asaoka, a Tokyo-based senior strategist at Mizuho Trust & Banking Co. “Investors find it hard to move near year-end.”

Japan’s Nikkei 225 Stock Average lost 0.5 percent after minutes from a central bank meeting last month showed a few board members said Europe’s sovereign-debt crisis and the yen’s rise pose increasing risks to economic growth. Trading volume on the gauge was more than 59 percent below the 100-day average, according to data compiled by Bloomberg.

‘No Catalyst’

“There’s no outstanding catalyst to buy stocks,” said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co. “Trading energy plunged in the Tokyo market yesterday. Today as well, we can’t expect foreign investors to buy shares as the overseas markets are closed.”

Nissan lost 1.7 percent to 684 yen. Sharp Corp., Japan’s largest maker of flat-panel displays, slid 1.4 percent to 711 yen.

South Korea’s Kospi Index fell 0.8 percent after consumer sentiment slipped. The gauge dropped as much as 2.3 percent after a mistaken order was apparently placed, according to La Sung Chae, an official at the market trading analysis team of Korea Exchange Inc. Shares also fell amid unsubstantiated rumors concerning the health of the new leader of North Korea and the nation’s relations with China, the official said.

Shanghai Stocks

The Shanghai Composite Index dropped 1.1 percent. Shares of mainland industrial companies fell after a report that profit growth declined to 24.4 percent in the first 11 months of the year from 25.3 percent in the 10 months through October.

Anhui Conch Cement slid 2.4 percent to 15.11 yuan. Sany Heavy Industry Co. fell 1.9 percent to 11.94 yuan.

Samsung Electro-Mechanics retreated 6.8 percent to 80,700 won in Seoul. The maker of electronic parts will sell its stake in an LED venture to Samsung Electronics Co. for 283 billion won ($244 million), according to a regulatory filing. The value of the deal is lower than expected, Woori Investment & Securities Co. said in a report today. Samsung Electronics gained 0.7 percent to 1.07 million won.

Japanese construction companies advanced after the Nikkei newspaper said the nation will start work on three bullet train lines, citing Transportation Minister Takeshi Maeda. Nishimatsu added 3.2 percent to 129 yen. Matsui Construction Co. rose 3 percent to 307 yen.

Stocks in the MSCI Asia Pacific Index are valued at 12.7 times estimated earnings on average, compared with 12.8 times for the S&P 500 and 10.5 times for the Stoxx 600. Utilities have lost 27 percent this year, the worst among the 10 industry groups on the Asian benchmark gauge, as Japanese power generators tumbled after a nuclear crisis at Tokyo Electric Power Co.’s Fukushima Dai-Ichi plant.

--With assistance from Toshiro Hasegawa and Norie Kuboyama in Tokyo. Editors: Jason Clenfield, Jim Powell.

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.

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Asian Stocks Advance After U.S. Reports Lift Earnings Outlook

December 26, 2011, 3:17 AM EST By Yoshiaki Nohara

Dec. 26 (Bloomberg) -- Asian stocks rose, extending last week’s gain, as orders for U.S. durable goods and home sales climbed, boosting confidence in the world’s biggest economy and the earnings outlook for Asia’s exporters.

Fanuc Corp., a maker of factory robots that gets 75 percent of its sales outside Japan, rose 2.9 percent in Tokyo. CSR Corp., a trainmaker, dropped 7.3 percent in Shanghai after a report China’s railway ministry will cut construction spending. Mitsubishi Corp., Japan’s biggest commodities trader by revenue, rose 1.7 percent after prices of raw materials and metals increased. Woongjin Energy Co. slipped 7 percent in Seoul after clients canceled orders for solar-energy equipment.

“America is holding up amid concern Europe’s problems would drag the world down,” said Koichi Kurose, chief economist in Tokyo at Resona Bank Ltd., which oversees the equivalent of $68 billion. “The U.S. economy will need policy backing to stand its ground. Moves in equities will be limited this week before investors start seeking a trend in the next year.”

The MSCI Asia Pacific Index gained 0.2 percent to 113.90 as of 4:20 p.m. in Tokyo, with eight out of the 10 industry groups advancing. The measure added 1.1 percent last week. The gauge has tumbled 17 percent this year amid concern Europe’s debt crisis will slow global economic growth.

Japan’s Nikkei 225 Stock Average rose 1 percent today after a public holiday on Dec. 23. Trading volume on the gauge was 51 percent below the 100-day average, according to data compiled by Bloomberg.

South Korea’s Kospi Index fell 0.6 percent, while China’s Shanghai Composite Index slipped 0.7 percent. Markets in Hong Kong, Australia and Singapore are shut today for holidays.

U.S. Data

The Standard & Poor’s 500 Index added 0.9 percent in New York on Dec. 23. as orders for durable goods rose in November by the most in four months and sales of new U.S. homes advanced last month to a seven-month high.

Stocks also gained after the U.S. Congress passed a two- month extension of a payroll tax cut. President Barack Obama signed the measure, and negotiators are making plans to start work on a longer-term deal.

‘Worst Avoided’

“There was a consensus that 2012 U.S. growth would fall,” said Naoki Murakami, chief economist at Monex Group Inc. in Tokyo. “The worst-case scenario has been avoided, and that’s a positive for stocks.”

Exporters to the U.S. advanced. Fanuc added 2.9 percent to 11,780 yen. Honda Motor Co., Japan’s second-largest carmaker by market value, rose 1.3 percent to 2,354 yen.

Stocks in the MSCI Asia Pacific Index were valued at 12.7 times estimated earnings on average as of Dec. 23, compared with 12.8 times for the S&P 500 and 10.5 times for the Stoxx Europe 600 index, according to data compiled by Bloomberg.

Utilities posted the biggest decline among the 10 industry groups in the Asia-Pacific gauge this year as Japanese power generators tumbled after meltdowns at Tokyo Electric Power Co.’s Fukushima Dai-Ichi plant.

Tepco, as the utility is known, lost 4.1 percent to 213 yen today after the Nikkei newspaper reported the company may seek several hundred billion yen in fresh aid to compensate nuclear disaster victims. Tepco received 890 billion yen ($11.4 billion) in state assistance last month.

Railway Stocks

CSR dropped 7.3 percent to 4.42 yuan after Xinhua News Agency said China’s railway ministry will reduce construction spending to 400 billion yuan ($63 billion) in 2012 from 469 billion yuan this year. China Railway Construction Corp. lost 1 percent to 3.99 yuan.

Mitsubishi Corp. climbed 1.7 percent to 1,539 yen after the Thomson Reuters/Jefferies CRB Index of raw materials added 0.1 percent on Dec. 23 and a gauge of prices for industrial metals advanced in London. Itochu Corp., a Japanese trading firm, rose 1.1 percent to 769 yen.

Woongjin Energy slipped 7 percent to 4,500 won after three clients canceled orders for solar-cell wafers because of the global economic slowdown and lower demand for alternative energy, according to regulatory filings.

--With assistance from Norie Kuboyama and Toshiro Hasegawa in Tokyo. Editors: Jim Powell, Jason Clenfield.

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net

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Asian Stocks Rise as U.S. Data Overshadow Europe Debt Concern

December 22, 2011, 9:33 PM EST By Jonathan Burgos

Dec. 23 (Bloomberg) -- Asian stocks rose, with a regional index heading for its first gain in three weeks, as a drop in U.S. jobless claims and an increase in consumer confidence added to signs the world’s biggest economy is weathering Europe’s debt crisis.

Samsung Electronics Co., South Korea’s biggest exporter of consumer electronics, advanced 1.8 percent in Seoul. James Hardie Industries SE, a supplier of building materials the counts the U.S. as its largest market, climbed 3.9 percent in Sydney. Gloucester Coal Ltd. surged 23 percent after Yanzhou Coal Mining Co. offered to buy the Sydney-based company for A$700 million ($709 million) and merge it with Yanzhou’s Australian unit.

“Its encouraging that the U.S. economy is improving,” said Tim Schroeders, who helps manage $1 billion at Pengana Capital Ltd. Melbourne. “Asset prices can probably go further despite this fairly benign economic environment. There’s probably a need for further policy response in Europe but at least we’re seeing that the liquidity mechanism put in place are starting to impact positively in terms of bond yields paring their gains.”

The MSCI Asia Pacific Excluding Japan Index climbed 1.2 percent to 397.22 as 10:02 a.m. in Hong Kong, heading for a 2.1 percent advance this week. Almost seven shares gained for each that fell in the gauge.

The regional index had fallen in the past two weeks as signs of slowing growth in China and concern that Europe’s debt crisis is worsening overshadowed improving U.S. data. Greece’s creditors are resisting pressure from the International Monetary Fund to accept bigger losses on holdings of the indebted nation’s government bonds, three people with direct knowledge of the discussions said.

New Zealand Quake

South Korea’s Kospi Index and Hong Kong Hang Seng Index both gained 1.1 percent. Australia’s S&P/ASX 200 Index advanced 1 percent. China’s Shanghai Composite Index was little changed. Japanese markets are closed today for a holiday.

New Zealand’s NZX 50 Index added 0.4 percent, paring gains of as much as 0.7 percent after a magnitude 5.8 earthquake struck the country’s South Island.

Futures on the Standard & Poor’s 500 Index rose 0.6 percent today. The gauge rose 0.8 percent in New York yesterday amid better-than-estimated economic reports.

Asian exporters gained as the number of Americans applying for unemployment benefits unexpectedly dropped last week to the lowest since April 2008 and consumer confidence rose more than forecast in December to a six-month high.

The MSCI Asia Pacific Index, which includes Japan, slumped 18 percent this year through yesterday, heading for its worst performance since 2008. Utilities posted the biggest decline among the 10 industry groups in the gauge as Japanese utilities tumbled after meltdowns at Tokyo Electric Power Co.’s Fukushima Dai-Ichi plant. It was the worst nuclear accident in 25 years.

The regional benchmark index’s drop this year compared with a 0.3 percent decline by the S&P 500 and a 13 percent slide by the Stoxx Europe 600 Index. Stocks in the Asian gauge were valued at 12.6 times estimated earnings on average, compared with 12.7 times for the S&P 500 and 10.4 times for the Stoxx 600, according to data compiled by Bloomberg.

--Editor: Nick Gentle

To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net

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Asian Stocks Fall on Economic Data, Before European Debt Summit

December 08, 2011, 6:53 AM EST By Kana Nishizawa and Norie Kuboyama

Dec. 8 (Bloomberg) -- Asian stocks dropped ahead of a European summit on the region’s sovereign debt crisis, and after economic data from Japan and Australia signaled the global economy is slowing.

Tokyo Electric Power Co., the operator of the power plant at the center of the biggest nuclear disaster in 25 years, sank 11 percent after the Mainichi newspaper reported it may be effectively nationalized. LG Electronics Inc., a home appliances maker that gets more than a fifth of its revenue from Europe, fell 1.3 percent in Seoul. City Developments Ltd., Singapore’s second-biggest real-estate company, led declines among the city’s property developers after the government imposed extra taxes on purchases of residential property.

“As the European meetings get closer investors have turned cautious,” said Masaru Hamasaki, who helps oversee the equivalent of $24 billion as chief strategist at Toyota Asset Management Co. in Tokyo. “There’s been a switch from a feeling that we were going to get some visibility on the situation to a cooler stance, where people are in a wait-and-see mood.”

The MSCI Asia Pacific Index slid 0.5 percent to 117.56 as of 8:28 p.m. in Tokyo. All but one of 10 industry groups on the measure dropped, with more than twice as many stocks falling as rising.

Japan’s Nikkei 225 Stock Average retreated 0.7 percent after machinery orders fell 6.9 percent in October from September, missing the median forecast of a 0.5 percent gain by 27 economists surveyed by Bloomberg News.

Australia’s S&P/ASX 200 index fell 0.3 percent as the nation’s employers cut 6,300 workers in November from the previous month, missing the 10,000 extra jobs forecast in a Bloomberg survey of 22 economists.

Interest Rates

New Zealand’s NZX 50 Index dropped 0.4 percent after the central bank left interest rates at a record low of 2.5 percent today and cut its economic growth predictions. South Korea’s Kospi Index declined 0.4 percent as the central bank refrained from raising borrowing costs for a sixth straight month amid a global slowdown. Hong Kong’s Hang Seng Index fell 0.7 percent, while Singapore’s Straits Times Index lost 2 percent.

The MSCI Asia Pacific Index declined 14 percent this year through yesterday, compared with a gain of 0.3 percent by the Standard & Poor’s 500 and a 12 percent slump by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 12.9 times estimated earnings on average, compared with 12.7 times for the S&P 500 and 10.6 times for the Stoxx 600.

Pressure Intensifies

LG Electronics fell 1.3 percent to 74,000 won in Seoul, while Hutchison Whampoa Ltd., an owner of ports in Germany, Italy and Spain, retreated 0.4 percent to HK$68 in Hong Kong.

Pressure on Europe’s leaders to halt the spread of the region’s debt crisis at a summit in Brussels this week intensified as the European Union had its AAA long-term rating put on “creditwatch negative” by S&P following a similar action on 15 euro-area governments.

German Chancellor Angela Merkel and French President Nicolas Sarkozy are expected to argue for rewriting European Union treaties to tighten control of national budgets at the meeting of euro zone leaders tonight and tomorrow.

“Investors can’t buy or sell until they see the results of the European meetings,” said Mitsushige Akino, who oversees about $600 million in Tokyo at Ichiyoshi Investment Management Co. “Stocks have been rising on expectations the European Union and the European Central Bank may take some action, but now investors need to see whether the results meet or beat expectations.”

Tepco Action

Tokyo Electric Power, known as Tepco, dropped 11 percent to 244 yen after the Mainichi newspaper said the government’s Nuclear Damage Liability Facilitation Fund may buy preferred shares worth at least 1 trillion yen ($12.9 billion) from the utility by next summer, without saying where the information came from. Most of Tokyo Electric’s management will be replaced, the report said.

City Developments sank 8.3 percent to S$9.19 in Singapore, the second-biggest drop in the MSCI Asia Pacific Index after Tepco. CapitaLand Ltd., an operator in residential and commercial properties, dropped 7.3 percent to S$2.42. Keppel Land Ltd., the real-estate unit of Keppel Corp., retreated 8 percent to S$2.42.

Singapore developers declined after the government required foreigners and corporate entities to pay an additional 10 percent stamp duty when they buy homes in the city. Permanent residents purchasing a second home as well as citizens buying their third residential property also need to pay an additional tax of 3 percent, the government said in a statement yesterday.

--With assistance from Jonathan Burgos in Singapore and Toshiro Hasegawa in Tokyo. Editors: Nick Gentle, John McCluskey

To contact the reporters on this story: Kana Nishizawa in Hong Kong at knishizawa5@bloomberg.net; Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net

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Asian Stocks Drop as U.S. Jobs, Manufacturing Reports Disappoint

June 02, 2011, 6:57 AM EDT By Jonathan Burgos and Shani Raja

June 2 (Bloomberg) -- Asian stocks dropped for the first time in three days after U.S. manufacturing expanded at the weakest pace in more than a year and employers hired fewer workers than forecast, fueling concern the global economic recovery will slow.

Samsung Electronics Co., the Korean consumer-electronics company that gets 85 percent of its revenue from overseas, sank 3.1 percent in Seoul. Sony Corp., Japan’s largest exporter of consumer electronics, lost 1.7 percent in Tokyo. Toyota Motor Corp. and Honda Motor Co. led declines among Japanese carmakers as sales in the U.S. slumped. BHP Billiton Ltd., the world’s largest mining company and Australia’s No. 1 oil producer, retreated 2.2 percent after crude oil and metal futures dropped.

The MSCI Asia Pacific Index dropped 1.6 percent to 134.59 as of 7:37 p.m. in Tokyo, paring this week’s advance and set for its biggest drop since May 23. All of the 10 industry groups that make up the gauge declined. More than four stocks dropped for each that rose on the measure, which last week completed its longest streak of weekly losses in two years as concern deepened over Europe’s debt crisis and amid speculation a slowing global recovery will crimp earnings.

“The weak manufacturing and employment data coming on the back of soft data out of Europe and China and another downgrade for Greece have added to concerns about the strength of the global economy,” said Shane Oliver, head of investment strategy at AMP Capital Investors Ltd., which manages $98 billion in Sydney. “Investors are worried it will be something worse, which will be bad for Asian exporters. As a result the risk on- risk off, the roller coaster in global and regional markets continues and right now it’s back to risk off.”

Kan Vote

Japan’s Nikkei 225 Stock Average decreased 1.7 percent ahead of a no-confidence vote on Prime Minister Naoto Kan after the country’s markets closed. The motion was rejected by the lower house of parliament after Kan, who faces discontent over his handling of the March 11 earthquake disaster that triggered the world’s worst nuclear accident in 25 years, signaled he’ll resign once a solution to the nation’s post-quake crisis is in sight.

South Korea’s Kospi Index retreated 1.3 percent. Hong Kong’s Hang Seng Index slipped 1.6 percent, while China’s Shanghai Composite Index sank 1.4 percent. Australia’s S&P/ASX 200 Index dropped 2.3 percent, its steepest fall in a year.

Futures on the Standard & Poor’s 500 Index added 0.3 percent today. In New York, the index retreated 2.3 percent yesterday, its biggest decline since August, after the Institute for Supply Management’s factory index fell last month to its lowest level since September 2009.

Manufacturing, Jobs

Companies in the U.S. last month added jobs at the slowest pace since September. Employment grew by 38,000 in May, data from ADP Employer Services showed yesterday, missing a 175,000 median estimate of economists surveyed by Bloomberg.

Manufacturing growth from China, the U.S. and Europe slowed in May, adding to signs that momentum is weakening in a global economy facing headwinds from rising commodity costs and financial shocks. Greece’s risk of default was raised to 50 percent by Moody’s Investors Service as European officials rushed to put together the second bailout plan in two years to stave off renewed financial turmoil in the region.

“The global economy has hit a soft patch and more investors are shying away from risk assets.” said Mitsushige Akino, who oversees the equivalent of $600 million at Ichiyoshi Investment Management Co. in Tokyo.

Billabong International Ltd., the world’s largest surfwear maker, dropped 3.4 percent to A$6.20 in Sydney. Samsung Electronics, which gets about 22 percent of sales from America, dropped 3.1 percent to 883,000 won in Seoul. LG Electronics Inc., the world’s third-biggest maker of mobile phones, tumbled 4.4 percent to 94,200 won. Sony, the maker of PlayStation gaming consoles and Bravia televisions, lost 1.7 percent to 2,142 yen in Tokyo.

Auto Slump

Acer Inc., the world’s second-biggest supplier of notebook computers, slumped 7 percent to NT$51.90 in Taipei, its steepest drop since December 1997. The company said it will book an operating loss of $150 million because of an inventory write-off. It also plans to cut 300 jobs in Europe, the Middle East and Africa to reduce expenses.

Carmakers declined as industry-wide U.S. auto sales fell to 1.06 million cars and light trucks last month from 1.1 million a year earlier, according to a report from Autodata Corp., of Woodcliff Lake, New Jersey. Toyota and Honda, the automakers hardest hit by Japan’s record earthquake, led U.S. sales declines among Asian-based car manufacturers in May as supplies of some models ran low, the report showed.

Toyota, the world’s biggest carmaker, decreased 3.3 percent to 3,270 yen. Honda, which gets about 44 percent of sales from North America, dropped 2.4 percent to 3,045 yen. Nissan Motor Co., Japan’s No. 3 automaker by market value, sank 3.2 percent to 781 yen.

Oil, Metals

A gauge of raw material producers led the drop among the 10 industry groups in the MSCI Asia Pacific Index. BHP dropped 2.2 percent to A$43.55 in Sydney. Rio Tinto Group, the world’s second-biggest mining company by sales, fell 1.8 percent to A$80.10. Jiangxi Copper Co., China’s No. 1 producer of the metal, slipped 3 percent to HK$25.65 in Hong Kong. Cnooc Ltd., the nation’s largest offshore oil producer, dipped 2.2 percent to HK$18.96.

Crude oil for June delivery declined 2.4 percent to settle at $100.29 a barrel in New York yesterday, the biggest drop in a single-session since May 11. The London Metal Exchange Index of prices for six metals including copper and aluminum lost 1 percent.

The MSCI Asia Pacific Index slid 0.6 percent this year through yesterday, compared with gains of 4.5 percent by the S&P 500 and 0.9 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark were valued at 13.8 times estimated earnings on average, compared with 13.3 times for the S&P 500 and 11.2 times for the Stoxx 600.

--With assistance from Norie Kuboyama and Satoshi Kawano in Tokyo. Editors: John McCluskey.

To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; To contact the reporters on this story: Shani Raja in Sydney at sraja4@bloomberg.net.

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.

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Asian Stocks Climb on Optimism Over Greece Aid; Sony Advances

May 31, 2011, 7:03 AM EDT By Jonathan Burgos

May 31 (Bloomberg) -- Asian stocks rose, with the regional benchmark index paring the biggest monthly decline in a year, amid speculation European officials will pledge more financial aid to Greece.

Cosco Pacific Ltd., the Hong Kong-based operator of container facilities in Greece, climbed 3.8 percent. Sony Corp., the maker of PlayStation gaming consoles that counts Europe as its biggest market outside of Japan, gained 1.9 percent in Tokyo. Hyundai Heavy Industries Co., the world’s biggest shipbuilder, surged 11 percent in Seoul after winning an order for two liquefied natural gas tankers.

The MSCI Asia Pacific Index gained 1.4 percent to 136.11 as of 7:24 p.m. in Tokyo, the highest close since May 13. More than six stocks advanced for each that fell in the gauge, which last week completed its longest string of weekly losses in two years as concern deepened over Europe’s debt crisis and amid speculation a slowing global recovery will crimp earnings.

“Talk of additional aid for Greece has given investors some relief for now,” said Andrew Pease, Sydney-based senior investment strategist for the Asia-Pacific region at Russell Investment Group. “These are just temporary solutions. That’s not a sustainable solution. Asian markets, particularly China, look genuinely cheap.”

Japan’s Nikkei 225 Stock Average climbed 2 percent, the steepest gain since March 30. Stocks extended gains today after a report showed Japan’s industrial production, disrupted by the March disaster, may rebound to near pre-earthquake levels by next month. The data also showed output grew less than economists expected last month.

India Economic Growth

“On the level of individual firms we’ve had a lot of anecdotal evidence that supply chains were recovering, but today’s figures are significant because they confirm that production is coming back,” said Yoshinori Nagano, a senior strategist in Tokyo at Daiwa Asset Management Co., which oversees the equivalent of $104 billion.

India’s Sensitive Index advanced 1.5 percent. The nation’s economic growth eased to 7.8 percent in the three months to March 31 as manufacturing and services moderated, a slowdown that has yet to curb pressure for more increases in interest rates to damp inflation.

South Korea’s Kospi Index advanced 2.3 percent. Australia’s S&P/ASX 20 Index gained 0.9 percent. Hong Kong’s Hang Seng Index increased 2.2 percent, while China’s Shanghai Composite Index added 1.4 percent, its first increase in nine days.

European Union leaders will decide on additional aid for Greece by the end of June and have ruled out a “total restructuring” of the nation’s debt, said Jean-Claude Juncker, head of the euro-area finance ministers’ group. Greek Prime Minister George Papandreou said on May 27 he’ll press ahead with new austerity measures after failing to win backing from the main opposition parties.

‘Relief to Exporters’

Cosco Pacific advanced 3.8 percent to HK$15.42 in Hong Kong. Samsung Electronics Co., the world’s largest maker of televisions that gets one-fifth of its sales from Europe, climbed 2 percent to 902,000 won in Seoul. Sony, Japan’s biggest exporter of consumer electronics, rose 1.9 percent to 2,163 yen in Tokyo.

Japanese exporters also advanced as the euro rose against the yen, boosting the value of repatriated sales from Europe. Toyota Motor Co., the world’s biggest carmaker, gained 2.1 percent to 3,400 yen. Mazda Motor Corp., the Japanese carmaker most dependent on European sales, jumped 1.5 percent to 205 yen. Canon Inc., the camera maker whose largest source of revenue is Europe, advanced 2.1 percent to 3,905 yen.

Debt Crisis

“Even though the euro has weakened in the midst of Greece’s debt crisis, the currency is having a little comeback and that’s given some relief to exporter shares,” said Daiwa’s Nagano.

The MSCI Asia Pacific Index lost 2.5 percent this year through yesterday, compared with gains of 5.8 percent by the S&P 500 and 1.1 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark were valued at 13.4 times estimated earnings on average, the same as for the S&P 500, and compared with 11.1 times for the Stoxx 600.

Hyundai Heavy surged 11 percent to 505,000 won in Seoul, the biggest advance on the MSCI Asia Pacific Index. The company won an order for two liquefied natural gas tankers from Dynagas Ltd. of Greece.

Hyundai Engineering & Construction Co., a South Korean builder, increased 2.1 percent to 84,000 won. The company said it received orders worth $230 million from Singapore and Iraq.

Hanwha Chemical Corp., South Korea’s fourth-largest maker of plastic resins by sales, jumped 9.6 percent to 48,950 won after Samsung Securities raised its share-price forecast to 59,500 won from 41,000 won and maintained its “buy” rating.

‘Stock Valuations’

“While stock valuations are looking attractive, we’re still cautious as global growth is slowing,” said Diane Lin, a Sydney-based fund manager at Pengana Capital Ltd., which has about $1 billion of assets. “Europe’s situation is still very difficult.”

Futures on the Standard & Poor’s 500 Index rose 1 percent today. U.S. markets were closed yesterday for a public holiday.

U.S. economic data to be released this week are expected to show further evidence that growth in the world’s biggest economy is slowing. Nonfarm payrolls are expected to rise by 185,000 workers in May, less than the 244,000 increase in April, according to the median forecast in a Bloomberg News survey before Labor Department figures to be released on June 3. Another report may show factory orders grew at the slowest pace in seven months.

Renewable Energy

Renewable-energy companies rallied after German Chancellor Angela Merkel’s coalition endorsed yesterday a plan to close all of Germany’s atomic-power plants by 2022. The country will double energy output from renewable sources by 2020, Merkel said yesterday at a press conference in Berlin.

Taewoong Co., a South Korean maker of parts for wind power plants, surged 8.3 percent to 44,400 won in Seoul. OCI Co., the nation’s biggest maker of polysilicon that’s used in solar panels, jumped 9 percent to 493,000 won. GCL-Poly Energy Holdings Ltd., China’s largest maker of the same material, climbed 5.3 percent to HK$4.17 in Hong Kong.

--Editor: Reinie Booysen

To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net.

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.

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Dividend Stocks' Asian Flavor

By David Bogoslaw

(Changes percentages in twelfth paragraph.)

The search for yield is driving investors toward stocks that pay dividends—and some of the most generous yields are in Asia, where stock prices are among the world's cheapest. While most international dividend mutual funds are heavily allocated to North America and Europe, few have major exposure to Asia. The main reason for that is U.S. investors tend to associate Asian companies with torrid growth and believe that profits are being reinvested in their businesses at the expense of dividends, much like at U.S. technology giants Apple (AAPL) and Google (GOOG).

But that conventional wisdom is not completely accurate, some portfolio managers say.

"If you look at history, Asia has been yielding over the years 75 to 100 basis points higher than the U.S. So this is nothing new," says Jesper Madsen, lead manager of the $2.3 billion Matthews Asia Dividend Fund (MAPIX) in San Francisco. "It seems like the marketplace is not fully appreciating the fact that Asia does offer the yield and that it also comes with a higher growth rate alongside."

It makes sense that high growth rates in Asian countries' gross domestic product and capital flows into the region would show up in dividend growth rates for the region overall, Madsen says. In an analysis done in the fall of 2010, Madsen says, he found that the aggregate dividend for the MSCI Asia Pacific Index rose at an average annual rate of 16 percent from 2002 to 2009, compared with a 6 percent dividend growth rate for the Standard & Poor's 500-stock index. Bloomberg data for the same period show that growth in Asian dividends outpaced U.S. and European dividends on an annual basis, albeit not quite as dramatically. (The Matthews study froze the indexes at their compositions as of Dec. 31, 2002, to avoid overstating dividend growth that would have resulted from including many high dividend-paying Asian companies whose initial public offerings occurred after 2002.)

Dividend growth on the MSCI Asia Pacific Index increased at a compound annual rate of 7.23 percent, vs. 4.85 percent for the S&P 500 and 4.83 percent for the MSCI EAFE Index, which includes companies across Europe, Africa, and the Middle East, according to Bloomberg data. "That goes counter to people's basic understanding of what investing is about," Madsen says. "They've been taught if you want growth, you have to sacrifice yield. But we've seen companies [in Asia] deliver both."

Indeed, the dividends paid by the 1,022 companies in the MSCI Asia Pacific Index totaled about $200 billion in 2010, on par with S&P 500 companies, Madsen says. S&P says the 500 companies in its index paid $205.3 billion in dividends last year. "It talks to the fact that this is a market that's already there," Madsen says. "It's present, available to be tapped."

Another psychological hump for investors to surmount is the belief that Asian companies carry greater risk, whether due to lower trading liquidity than well-established Western companies, less transparent corporate governance, or the uncertain treatment of minority shareholders. James Weir, co-manager of the Guinness Atkinson Asia Pacific Dividend Fund (GAADX), thinks those risks are overstated. Investors have more cause to worry about corporate and government balance sheets in Europe than in Asia, where debt levels have been managed tightly since the currency crisis of the late 1990s, he says. Weir believes a well-capitalized telecom provider in Malaysia, for example, is a better pick for investors than one in the United Kingdom based on a cheaper valuation, better earnings growth, and a higher dividend yield, typically in the high single to low double digits.

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Asian Stocks Drop as Commodities Tumble Amid Inflation Concern

May 12, 2011, 7:11 AM EDT By Shani Raja

May 12 (Bloomberg) -- Asian stocks fell, with the key regional index set for its biggest slide since markets crashed in the wake of Japan’s record earthquake in March, as commodity prices tumbled amid concern that China will further tighten monetary policy.

BHP Billiton Ltd., the world’s largest mining company, dropped 2.6 percent in Sydney after oil and metal prices sank yesterday in New York. Jiangxi Copper Co., China’s No. 1 producer of the metal, declined 2.2 percent in Hong Kong. Korea Zinc Co. slid 5.7 percent in Seoul, while Mitsubishi Corp., Japan’s biggest commodities trader, fell 2 percent. Olympus Corp., an optical-equipment maker, lost 5.6 percent in Tokyo after reporting an 85 percent slump in profit.

The MSCI Asia Pacific Index declined 1.6 percent to 136.14 as of 7:44 p.m. in Tokyo after commodity prices tumbled yesterday as China reported faster-than-estimated inflation and as the U.S. Federal Reserve gets closer to ending a $600 billion asset-purchase program, known as quantitative easing, in June.

“Markets always struggle with tightening cycles,” said James Holt, Sydney-based director of BlackRock Investment Management (Australia) Ltd., which oversees about $40 billion in assets. “The China inflation data yesterday shows that the country will need to do more tightening. This comes at the same time as investors pre-empt the end of the second round of quantitative easing, which has pumped up asset and commodity markets.”

Nikkei, Kospi

The gauge is headed for its steepest drop since March 15, when it fell 5 percent as Japanese stocks plunged amid a nuclear crisis triggered by a magnitude-9 earthquake and ensuing tsunami on March 11.

Japan’s Nikkei 225 Stock Average fell 1.5 percent and South Korea’s Kospi Index lost 2 percent. Hong Kong’s Hang Seng Index retreated 0.9 percent. Australia’s S&P/ASX 200 Index decreased 1.8 percent on a day the statistics bureau reported that the nation’s employers unexpectedly cut workers in April by the most since 2009.

Futures on the Standard & Poor’s 500 Index lost 0.6 percent today. In New York yesterday, the index slumped 1.1 percent, its biggest decline since March 16.

The MSCI Asia Pacific Index rose 0.5 percent this year through yesterday, compared with gains of 6.7 percent by the S&P 500 and 2.9 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark were valued at 13.6 times estimated earnings on average at yesterday’s close, compared with 13.6 times for the S&P 500 and 11.3 times for the Stoxx 600.

BHP, Korea Zinc

The Asia-Pacific gauge has risen close to 5 percent and commodity prices have surged since Nov. 3 when a U.S. plan to buy Treasuries was unveiled. The Fed said last month it won’t need to extend the $600 billion program beyond its scheduled end next month.

BHP Billiton, also Australia’s No. 1 oil producer, lost 2.6 percent to A$44.13 in Sydney, while Rio Tinto Group, the world’s No. 2 mining company by sales, retreated 2 percent to A$79.79. Jiangxi Copper slumped 2.2 percent to HK$24.10 in Hong Kong.

Korea Zinc slid 5.7 percent to 367,500 won in Seoul and Mitsubishi Corp. declined 2 percent to 2,112 yen in Tokyo.

China Growth Risk

“The volatility in commodity prices and concerns about future policy direction in China have increased investor uncertainty,” said Tim Schroeders, Melbourne-based manager at Pengana Capital Ltd., which oversees about $1 billion. “Any perception that risks to the Chinese growth story are increasing will see investors react swiftly to adjust.”

Material and energy stocks led today’s declines after crude oil for June delivery plunged 5.5 percent to settle at $98.21 a barrel yesterday in New York. Copper fell to the lowest price in five months after China reported inflation remains above the government’s target, signaling further monetary-policy tightening that may curb metal demand.

The London Metal Exchange Index of six metals including copper and aluminum lost 1.9 percent yesterday, its first drop in four days.

“The inflation concern is causing investors to avoid risk assets,” said Mitsushige Akino, who oversees about $600 million in Tokyo at Ichiyoshi Investment Management Co. “That is the underlying reason for a slump in the commodity market.”

Consumer Prices

Consumer prices in China rose 5.3 percent from a year earlier and banks extended 740 billion yuan ($114 billion) of local-currency loans, according to reports yesterday from the statistics bureau and central bank.

Inflation is “the most pressing problem” facing the world’s second-biggest economy, Vice Premier Wang Qishan said this week. Monetary policy will remain “prudent” and focus on removing “inflationary monetary elements,” Chinese officials said in a statement in Washington after talks with the U.S.

Oil refiners dropped today after gasoline prices yesterday sank the most since February 2009 in New York. S-Oil Corp. slumped 6.3 percent to 134,000 won in Seoul, while SK Innovation Co. fell 4.7 percent to 215,500 won. In Sydney, Caltex Australia Ltd., Australia’s largest oil refiner, slid 1.3 percent to A$14.35.

Olympus dropped 5.6 percent to 2,281 yen in Tokyo. The company said full-year net income tumbled 85 percent to 7.38 billion yen as sales fell and did not disclose a profit forecast for this year.

Also in Tokyo, Citizen Holdings Co. decreased 7.3 percent to 459 yen. The watchmaker booked 5.12 billion yen ($63 million) in net income for the year ended March 31, missing its forecast by 27 percent.

--With assistance from Norie Kuboyama and Toshiro Hasegawa in Tokyo. Editor: John McCluskey, Nick Gentle.

To contact the reporters on this story: Shani Raja in Sydney at sraja4@bloomberg.net.

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.

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