MW:Asia stocks fall on data, commodities, earnings
By Sarah Turner, MarketWatch
SYDNEY (MarketWatch) — Asian stocks traded sharply lower Thursday, as weak data, declining commodity prices and poorly received earnings put pressure on major markets a day ahead of a much-awaited speech from U.S. Federal Reserve Chairman Ben Bernanke.
Japan’s Nikkei Stock Average JP:100000018 -0.95% fell 1.2%, South Korea’s Kospi KR:SEU -1.15% lost 1.3%, and Australia’s S&P/ASX 200 index AU:XJO -0.93% fell 0.9%.
Hong Kong’s Hang Seng Index HK:HSI -1.24% dropped 1.2%, while the Shanghai Composite Index CN:000001 -0.03% fell 0.3% after closing at a fresh three-and-a-half year low on Wednesday.
The losses contrasted with mild gains for Wall Street stocks Wednesday after the Federal Reserve’s Beige Book reported gradual U.S. economic expansion. Read more on Beige Book.
At the same time, data showed U.S. gross domestic product rose at a 1.7% annual rate in April-June, an upward revision of a prior estimate of 1.5%. Read more on GDP.
But strategists said that Bernanke’s speech on Friday at an annual gathering of central bankers in Jackson Hole, Wyo., remains the main focus for investors this week.
“Investors are clearly waiting for Chairman Bernanke’s talk at the Jackson Hole Summit.,” said Matthew Sherwood, strategist at Perpetual.
However, Sherwood believes investors may be disappointed by Bernanke’s speech.
“It is unlikely that the Fed Chairman will announce anything in his talk, and with the U.S. fiscal cliff approaching, it would probably be wiser to hold onto whatever policy ammunition he has left, for when the growth battle arrives, instead of firing your weapon before the enemy has arrived,” he said.
Weighing Japanese shares Thursday were weaker retail data, showing overall retail sales turning negative in July with a 0.8% drop from a year earlier, the first such fall since November. Sales for the large retailers plunged 4.4%, accelerating a recent downward trend. Read more on Japan retail sales data.
Retailers fell in Tokyo after the data, with J. Front Retailing Co. JP:3086 -2.00% , down 1.8%; Fast Retailing Co. JP:9983 -1.35% FRCOF +2.38% , lower by 1.5%; and Seven & I Holdings Co. JP:3382 -2.01% SVNDF -1.09% , retreating 2.1%.
Meanwhile, declining commodity prices helped take steel-mill shares lower in Japan, even in the face of another steep drop in iron-ore prices to just above $90 a tonne.
Nippon Steel Corp. JP:5401 -3.61% NISTF 0.00% fell 4.2%, Kobe Steel Ltd. JP:5406 -1.56% KBSTY -5.97% lost 1.6% and JFE Holdings Inc. JP:5411 -2.81% JFEEF -1.41% retreated by 3%.
The downward spiral for iron-ore prices took a heavier toll on Australian ore miners Thursday, with Fortescue Metals Group Ltd. AU:FMG -1.64% FSUMF -6.48% losing 1.2%, and Atlas Iron Ltd. AU:AGO -5.48% AGODY 0.00% tumbling 4.3%.
Mining-services group Boart Longyear Ltd. AU:BLY -36.03% BLGPY -18.62% plunged 34.9% in Sydney after downgrading its outlook as it reported earnings. Read more on Boart Longyear outlook.
Among Chinese resource companies, Jiangxi Copper Co. HK:358 -1.64% JIXAY -4.83% gave up 2% after reporting its first-half profit fell almost 40% as copper prices weakened.
Shipper China Cosco Holdings Co. HK:1919 -3.18% CICOY -5.05% fell 5.1% after it reported a wider first-half net loss of 4.87 billion yuan ($767 million) while China Shipping Container Lines Co. HK:2866 -9.66% CITAF -21.74% fell 10.8% after also reporting a wider net loss late Wednesday amid depressed freight rates. See story on Asia trade.
Agricultural Bank of China Ltd. shares HK:1288 -2.69% ACGBF 0.00% gave up 2% after posting a more than 20% rise in first-half profit. Dow Jones Newswires reported that the bank’s capital position remains the weakest of China’s top four banks. Read more on Agricultural Bank of China earnings.
Other financials tracked lower, with Bank of Communications Co. HK:3328 -3.48% BKFCF -0.76% down 3.1%, Industrial & Commercial Bank of China Ltd. HK:1398 -1.64% IDCBF -2.11% losing 1.9%, and China Merchants Bank Co. HK:3968 -1.76% CIHHF -6.49% also retreating 1.9%.
The property sector also saw earnings-related losses, as shares of Sino Land Co. HK:83 -4.80% SNLAF +3.31% lost 4.8% after the real-estate developer posted a lower annual net profit, though its underlying profit from operations rose.
Other property firms followed Sino Land lower, with Hang Lung Properties Ltd. HK:101 -2.61% HLPPF +1.49% down 3.4%, and New World Development Co. HK:17 -2.75% NDVLF +3.36% down 1.9%.
Among a handful of gainers in Asia, broker action helped support shares of telecom Softbank Corp. JP:9984 +1.58% SFTBF -0.82% , which advanced 1% in Tokyo after Nomura raised its target price for the shares.
