Asian Stocks Outside Japan Fall on Europe Crisis, US Slowdown

A Cambodian vendor carries household goods on his motorbike for selling through a village of Samroang Andet at the outskirt of Phnom Penh, Cambodia, on Monday, Sept. 17, 2012. Asian stocks excluding Japan fell on concern Europe’s debt crisis remains unresolved and the US economy is slowing. Gains in Japanese stocks were limited on concern a dispute between China and Japan is worsening. (AP Photo/Heng Sinith) 

September 18, 2012
Asian stocks excluding Japan fell on concern Europe’s debt crisis remains unresolved and the US economy is slowing. Gains in Japanese stocks were limited on concern a dispute between China and Japan is worsening.    

BHP Billiton Ltd., the world’s largest mining company, slid 0.8 percent in Sydney. Fast Retailing Co., Asia’s biggest apparel chain, dropped 5.4 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 6.5 percent as a government minister signaled he has no plans to stop construction of nuclear reactors. Fortescue Metals Group Ltd. surged 17 percent, after Australia’s third-biggest iron-ore producer arranged $4.5 billion of new debt to refinance bank loans.    

The MSCI Asia Pacific excluding Japan Index lost 0.3 percent to 440.79 as of 12:22 p.m. in Tokyo, with about three stocks dropping for every two that rose. The MSCI Asia Pacific Index added 0.2 percent to 123.58. 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.”                          

Annual Gain    

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 rose 0.2 percent, South Korea’s Kospi Index slid was little changed and Australia’s S&P/ASX 200 Index lost 0.1 percent. Hong Kong’s Hang Seng Index was little changed and China’s Shanghai Composite lost 0.7 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.              
           
Spanish Aid    

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.

Bloomberg