Asian stocks drop for second day, metals rise, dollar weakens
Wednesday, 20 January 2010
TOKYO, Jan 19 (Bloomberg): Asian stocks fell for a second day, led by shares of banks and technology companies, on concern earnings growth will slow. Metals rose and the dollar declined.
The MSCI Asia Pacific Index lost 0.4 per cent to 125.73 as of 5 pm in Tokyo. A measure of financial stocks on the gauge dropped 0.3 per cent, while technology shares declined 2.3 per cent.
Platinum for immediate delivery gained as much as 1.3 per cent, while palladium climbed 1 per cent. Futures on the Standard & Poor's 500 Index added 0.3 per cent ahead of trading in the US, where markets were closed yesterday.
The Dow Jones Stoxx 600 fell 0.2 per cent to 257.80 at 8 a.m. in London.
Stocks on the MSCI World Index are trading near the highest level versus earnings since 2002, raising concerns valuations may have outpaced profit growth. Citigroup Inc is due to report earnings later today after JPMorgan Chase & Co's results disappointed investors last week. Sixty-five companies in the S&P 500 are scheduled to release quarterly results this week.
"Markets are pausing for a breath," said Prasad Patkar, who helps manage $1.6 billion at Platypus Asset Management in Sydney. "Expected corporate earnings are now factoring in the economic recovery. For markets to press on from here upwards, we'll need to see the earnings growth come through."
Two stocks declined for each one that rose on the MSCI Asia Pacific Index. The Shanghai Composite Index rose 0.3 per cent to 3,246.87 though China's central bank guided its benchmark one-year bill yield to the highest level in 14 months to curb record loan growth and prevent asset bubbles.
The People's Bank of China sold the bills at a rate of 1.9264 per cent in open-market operations. The yield increased eight basis points, the same as last week, after five months during which the benchmark was held unchanged. The Hang Seng Index climbed 0.8 per cent to 21,622.90.
Commonwealth Bank of Australia, the country's biggest lender by market value, sank 2.4 per cent to A$56.64, while Westpac Banking Corp, the second biggest, dropped 1.2 per cent to A$25.70. Mitsubishi UFJ Financial Group Inc., Japan's largest listed bank, lost 2.4 per cent to 486 yen after Barclays Capital said that Japanese banks' income from lending may slump.
"Investors who chased the banks the last few days are taking risk off the table ahead of the US open tonight," said Angus Gluskie, who oversees $300 million at White Funds Management Pty in Sydney. "With banks having been weak after JPMorgan's earnings, investors will be uncertain as to the trend of profitability in the US."
JPMorgan, the largest US bank by market value, reported fourth-quarter net income on Jan 15 that beat analyst estimates, though said it was "cautious" about the outlook for consumer loan defaults. Its retail unit posted the first quarterly loss since the first three months of 2008.
A measure of technology companies on the MSCI Asia Pacific Index was the biggest decliner of 10 industry groups, after a benchmark gauge of prices for dynamic-random-access memory chips retreated 1.7 per cent, the sixth straight day of declines, according to Dramexchange Technology Inc.
Inotera Memories Inc plunged 6.3 per cent to NT$25.85 in Taipei, Nanya Technology Corp. lost 6 percent to NT$31.95 and Powerchip Semiconductor Corp sank 6.8 per cent to NT$4.52.
Japanese car and electronics makers fell as a weaker dollar threatened the value of exports earnings. The dollar slipped to 90.46 yen in Tokyo from 90.78 yesterday in New York after earlier falling to 90.41, the weakest since Dec. 21.
Toyota Motor Corp, which gets 31 per cent of its revenue in North America, lost 1.2 per cent to 4,140 yen. Canon Inc, which gets 28 per cent of its sales from the Americas, fell 1.4 per cent to 3,810 yen.
Among stocks that rose, Posco, South Korea's biggest steelmaker, gained 1 per cent to 604,000 won, reversing a 1.7-per cent drop. The company said Warren Buffett, chairman of Berkshire Hathaway Inc, wants to buy more shares. Berkshire didn't immediately respond to a message left with Buffett's assistant Debbie Bosanek.
The MSCI Asia Pacific Index lost 0.4 per cent to 125.73 as of 5 pm in Tokyo. A measure of financial stocks on the gauge dropped 0.3 per cent, while technology shares declined 2.3 per cent.
Platinum for immediate delivery gained as much as 1.3 per cent, while palladium climbed 1 per cent. Futures on the Standard & Poor's 500 Index added 0.3 per cent ahead of trading in the US, where markets were closed yesterday.
The Dow Jones Stoxx 600 fell 0.2 per cent to 257.80 at 8 a.m. in London.
Stocks on the MSCI World Index are trading near the highest level versus earnings since 2002, raising concerns valuations may have outpaced profit growth. Citigroup Inc is due to report earnings later today after JPMorgan Chase & Co's results disappointed investors last week. Sixty-five companies in the S&P 500 are scheduled to release quarterly results this week.
"Markets are pausing for a breath," said Prasad Patkar, who helps manage $1.6 billion at Platypus Asset Management in Sydney. "Expected corporate earnings are now factoring in the economic recovery. For markets to press on from here upwards, we'll need to see the earnings growth come through."
Two stocks declined for each one that rose on the MSCI Asia Pacific Index. The Shanghai Composite Index rose 0.3 per cent to 3,246.87 though China's central bank guided its benchmark one-year bill yield to the highest level in 14 months to curb record loan growth and prevent asset bubbles.
The People's Bank of China sold the bills at a rate of 1.9264 per cent in open-market operations. The yield increased eight basis points, the same as last week, after five months during which the benchmark was held unchanged. The Hang Seng Index climbed 0.8 per cent to 21,622.90.
Commonwealth Bank of Australia, the country's biggest lender by market value, sank 2.4 per cent to A$56.64, while Westpac Banking Corp, the second biggest, dropped 1.2 per cent to A$25.70. Mitsubishi UFJ Financial Group Inc., Japan's largest listed bank, lost 2.4 per cent to 486 yen after Barclays Capital said that Japanese banks' income from lending may slump.
"Investors who chased the banks the last few days are taking risk off the table ahead of the US open tonight," said Angus Gluskie, who oversees $300 million at White Funds Management Pty in Sydney. "With banks having been weak after JPMorgan's earnings, investors will be uncertain as to the trend of profitability in the US."
JPMorgan, the largest US bank by market value, reported fourth-quarter net income on Jan 15 that beat analyst estimates, though said it was "cautious" about the outlook for consumer loan defaults. Its retail unit posted the first quarterly loss since the first three months of 2008.
A measure of technology companies on the MSCI Asia Pacific Index was the biggest decliner of 10 industry groups, after a benchmark gauge of prices for dynamic-random-access memory chips retreated 1.7 per cent, the sixth straight day of declines, according to Dramexchange Technology Inc.
Inotera Memories Inc plunged 6.3 per cent to NT$25.85 in Taipei, Nanya Technology Corp. lost 6 percent to NT$31.95 and Powerchip Semiconductor Corp sank 6.8 per cent to NT$4.52.
Japanese car and electronics makers fell as a weaker dollar threatened the value of exports earnings. The dollar slipped to 90.46 yen in Tokyo from 90.78 yesterday in New York after earlier falling to 90.41, the weakest since Dec. 21.
Toyota Motor Corp, which gets 31 per cent of its revenue in North America, lost 1.2 per cent to 4,140 yen. Canon Inc, which gets 28 per cent of its sales from the Americas, fell 1.4 per cent to 3,810 yen.
Among stocks that rose, Posco, South Korea's biggest steelmaker, gained 1 per cent to 604,000 won, reversing a 1.7-per cent drop. The company said Warren Buffett, chairman of Berkshire Hathaway Inc, wants to buy more shares. Berkshire didn't immediately respond to a message left with Buffett's assistant Debbie Bosanek.