BLBG:Asian Stocks Extend Weekly Loss in ’12; Copper, Kiwi Gain
Asian stocks fell, extending the biggest weekly decline of the year, as a surprise drop in profit at China’s third-largest bank rekindled concern growth will slow in the world’s second-largest economy. Metals rebounded, led by zinc amid tightening supplies.
The MSCI Asia Pacific Index (MXAP) slipped 0.7 percent as of 1:29 p.m. in Tokyo, heading for a 1.5 percent drop this week, the most since the period ended Dec. 16. Standard & Poor’s 500 Index futures added 0.2 percent after the gauge slipped 0.7 percent yesterday. Copper added 0.6 percent, while zinc climbed 1.3 percent. The yen pared its steepest weekly gain this year before data that may show U.S. home sales rose, damping demand for haven assets.
Agricultural Bank of China Ltd. and China Unicom (Hong Kong) Ltd. posted lower-than-expected earnings, underscoring concerns about economic growth in the nation after a report yesterday signaled manufacturing output may slow for a fifth month. More than half of Asian companies that reported earnings since January have missed analysts’ estimates.
“You have a more cautious attitude toward risk,” said Mike Jones, a currency strategist at Bank of New Zealand in Wellington.
Japan’s Nikkei 225 Stock Average (NKY) slid 1 percent and Hong Kong’s Hang Seng Index lost 1 percent, while China’s Shanghai Composite dropped 0.7 percent.
Earnings Performance
Agricultural Bank of China, the nation’s No. 3 lender, sank 3.1 percent in Hong Kong after reporting its first quarterly profit drop since listing two years ago amid lending restrictions and bad-loan costs. China Unicom, the country’s second-largest mobile phone company, dropped as much as 3.7 percent after yesterday posting full-year net income and revenue that fell short of expectations.
Of the 618 companies on the MSCI Asia Pacific Index that reported earnings since Jan. 9, 56 percent missed analysts’ estimates, data compiled by Bloomberg showed.
Yanzhou Coal Mining Co., China Petroleum & Chemical Corp. and Shanghai Electric Group Co. are among Hong Kong-listed companies scheduled to report earnings today.
S&P 500 Index futures rallied before a report economists said may show sales of new homes in the U.S. increased in February to the highest level since May 2010. The equities gauge lost 0.7 percent in New York yesterday as reports pointing to a manufacturing slowdown in Europe and China darkened the global economic outlook, overshadowing a decline claims for U.S. jobless benefits.
The Stoxx Europe 600 Index weakened 1.2 percent yesterday after a report by London-based Markit Economics showed a gauge of European manufacturing fell to 47.7 as factory output unexpectedly shrank in Germany and France.
Copper, Zinc
Base metals rebounded with copper advancing 0.6 percent to $8,341 a metric ton after a fall yesterday to the lowest level in more than two weeks was seen as excessive amid tightening global supplies. Zinc advanced 1.3 percent to $2,011 a ton. Lead climbed 1.2 percent to $2,007 a ton.
“Copper sentiment is a little poor at present, as markets and traders have over-reacted to Chinese economic news this week,” said Gavin Wendt, founder and senior resource analyst at Mine Life Pty in Sydney. “There are serious supply-side issues and demand remains robust, despite the pessimism in speculative circles.”
The yen fell 0.3 percent to 82.77 per dollar, paring this week’s gain to 0.8 percent. The New Zealand dollar gained 0.3 percent to 81.16 U.S. cents after falling as much as 1.2 percent yesterday after data showed the nation’s economy grew at half the pace forecast by economists.
Turning Point
Treasuries snapped a three-day gain, with 10-year yields rising one basis point to 2.29 percent. U.S. government securities have handed investors a 1.4 percent loss this month as of yesterday, Bank of America Merrill Lynch indexes show.
Rising yields are the result of improvement in the American economy and a recognition that the Federal Reserve will “normalize” monetary policy, according to UBS AG, one of the 21 primary dealers that trade with the central bank. Federal Reserve Bank of St. Louis President James Bullard said U.S. monetary policy may be at a turning point and the Fed’s first interest-rate increase since the global financial crisis could come late next year.
To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net
To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net
