Honda Motor Co. (7267), a carmaker that gets about 83 percent of sales overseas, dropped 1.9 percent in Tokyo to pace losses among Japanese exporters. Celltrion Inc. slumped 8.5 percent in Seoul after the drugmaker’s operating profit plunged. Jiangxi Copper Co., China’s biggest producer of the metal, sank 2.6 percent in Hong Kong, on course for a 2 1/2-year low. Belle International Holdings Ltd., a retailer of women’s shoes that gets almost all its sales from China, plunged 9.9 percent after reporting same-store footwear sales dropped.
The MSCI Asia Pacific Index declined 1.5 percent to 135.97 as of 2:31 p.m. in Tokyo, headed for its biggest decline since Feb. 4. All industry groups on the Asia-Pacific benchmark index fell. Mining companies dropped as copper futures yesterday fell to the lowest since July 2010 after disappointing China credit and export data fueled speculation the nation may miss its 7.5 percent economic growth target.
“The concern about China is big,” said Ayako Sera, a Tokyo-based market strategist at Sumitomo Mitsui Trust Holdings Inc., which has the equivalent of $651 billion in assets. “The outlook is unclear at the moment. While continuing to watch how it develops, investors are also preparing for the economy to deteriorate.”
China Credit
Aggregate financing in China decreased to 938.7 billion yuan ($153 billion) last month amid a crackdown on shadow lending, a government report this week showed. That compares with January’s record 2.58 trillion yuan and is less than the 1.31 trillion yuan median estimate of analysts surveyed by Bloomberg News. Chinese exports slid the most since 2009 last month, a separate report over the weekend showed.
“There’s been a little bit of an excess credit there that has created bubbles in real estate,” Carl Tannenbaum, Chicago-based chief economist at Northern Trust Corp., said on Bloomberg Television from Seoul. “China has to be very careful that their efforts to bring things under control don’t create a very large correction that will be disruptive.”
China’s Shanghai Composite Index lost 0.8 percent, while the Hang Seng China Enterprises Index of mainland companies traded in Hong Kong declined 2 percent, nearing a bear market. The city’s benchmark Hang Seng Index slipped 1.7 percent.
Baoding Tianwei Baobian Electric Co. declined 5.1 percent to 4.29 yuan in Shanghai as it resumed trading. The company’s bonds and stock were suspended from trading yesterday after the Chinese electrical equipment maker said it reported losses for a second year running.
Chaori Default
Investor scrutiny of China’s onshore bond market is mounting after Shanghai Chaori Solar Energy Science & Technology Co. last week became the first company to default. Chaori Solar’s failure to pay has stoked speculation more companies may miss debt deadlines also.
Japan’s Topix index fell 2.1 percent after the yen yesterday rose the most in a more than a week against the dollar. Australia’s S&P/ASX 200 Index (AS51) and Singapore’s Straits Times Index declined 0.5 percent. South Korea’s Kospi Index decreased 1.5 percent. New Zealand’s NZX 50 Index lost 0.1 percent. Taiwan’s Taiex index dropped 0.2 percent.
The MSCI Asia Pacific Index increased 6.1 percent from this year’s low on Feb. 4 through yesterday. The gauge traded at 13 times the estimated earnings of its constituent companies yesterday, compared with 15.9 for the Standard & Poor’s 500 Index and 14.4 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
U.S. Futures
Futures on the S&P 500 slipped 0.1 percent today. The U.S. equity benchmark index fell 0.5 percent yesterday, extending its retreat from a record high reached on March 7.
Russia stood by deposed Ukrainian President Viktor Yanukovych and called possible U.S. aid to the new government in Kiev illegal, as the standoff with Western governments over Crimea intensified. Ukraine’s interim prime minister Arseniy Yatsenyuk meets U.S. President Barack Obama in Washington today as the House of Representatives passed a resolution seeking sanctions against Russia.
To contact the reporters on this story: Jonathan Burgos in Singapore atjburgos4@bloomberg.net; Anna Kitanaka in Tokyo at akitanaka@bloomberg.net
To contact the editors responsible for this story: Sarah McDonald atsmcdonald23@bloomberg.net Jim Powell
http://www.bloomberg.com/news/2014-03-12/asia-stocks-drop-on-china-concern-as-rising-yen-weighs-on-topix.html
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