By Patrick Rial and Masaki Kondo
Jan. 9 (Bloomberg) -- Asian stocks dropped, sending the region’s benchmark index to a weekly decline, as falling demand eroded profits at automakers and technology companies, overshadowing gains by producers of consumer staples.
Nissan Motor Co. retreated 5 percent after laying off workers in the U.K. following a “dramatic” slump in demand. Asustek Computer Inc. slid 7 percent in Taipei as it forecast a quarterly loss. India’s Satyam Computer Services Ltd. plunged 46 percent, extending declines, after Chairman Ramalinga Raju said he falsified accounts. Sapporo Holdings Ltd. rose 2.3 percent after saying beer sales may increase this year.
“As we enter the earnings season, no good news can be expected,” said Yoji Takeda, who manages the equivalent of $1.1 billion at RBC Investment (Asia) Ltd. in Hong Kong. “Actual numbers and forecasts are likely to be even worse than investors expect. I’ve already increased my holdings of defensive stocks, such as consumer staples, food producers and power generators.”
The MSCI Asia Pacific Index fell 0.7 percent to 89.31 as of 4:35 p.m. in Tokyo, set for a 0.9 percent weekly decline. About three stocks dropped for every two that rose on the benchmark gauge. The index has lost 0.4 percent this year, building on a record 43 percent decline in 2008.
Japan’s Nikkei 225 Stock Average slipped 0.5 percent to 8,836.80. Samsung Electronics Co. paced declines in South Korea after the central bank cut interest rates to a record low and said the economy is deteriorating “rapidly.”
India’s Sensitive Index fell 2.9 percent, led by Satyam, on resuming trade following a holiday yesterday.
Gold Climbs
Australian shares gained, led by Newcrest Mining Ltd., after gold prices rose the most in a week.
Most U.S. stocks rose yesterday, with the Standard & Poor’s 500 Index adding 0.3 percent as falling oil prices boosted the outlook for refiners’ profit margins. Futures on the S&P 500 slipped 0.1 percent today.
Growth in the global economy will slow to 2.2 percent this year from 2008’s 3.7 percent, the International Monetary Fund said in November. A rate of 3 percent or less is “equivalent to a global recession,” according to the group.
The recession helped wipe out about half of global equity value last year. Hedge funds lost 18.3 percent in 2008, their worst year on record, according to Hedge Fund Research Inc., as managers misjudged the severity of the biggest financial crisis since the Great Depression.
Nissan, Japan’s third-biggest automaker, declined 5 percent to 343 yen after saying it will eliminate about 1,200 workers at a U.K. factory. The car market is “extremely challenging” this year, the Japanese automaker said.
Rating Cut
Fanuc Ltd., the world’s largest maker of factory robots, plunged 7 percent to 6,250 yen. Orders for equipment from manufacturers are likely to continue to decline, Hidehiko Hoshino, an analyst at UBS AG, wrote in a report. The analyst cut his rating on Fanuc to “sell” from “neutral.”
Asustek, the world’s largest supplier of boards that connect computer components, lost 7 percent to NT$33.4 after saying it expects to post a loss at its Asus brand unit due to lower-than- expected demand, excess inventories and currency fluctuations. Macquarie Group Ltd. and Credit Suisse Group cut the company’s rating to “underperform” from “neutral.”
In India, Satyam dropped 46 percent to 21.9 rupees, taking its two-day decline to 88 percent since Chairman Raju said he inflated earnings and assets by $1 billion.
Interim Chief Executive Officer Ram Mynampati said yesterday the fourth-largest Indian software-services provider may have to restate earnings and he couldn’t be sure the company had enough cash for this month.
Investment Value
Larsen & Toubro Ltd., which owns a 3.95 percent stake in Satyam, dropped 6.9 percent to 721.1 rupees, as the value of its investment in the software developer fell.
Samsung, the world’s largest television maker, slid 3 percent to 493,000 won. “The economy is deteriorating rapidly as demand cools faster than expected at home and abroad,” the Bank of Korea said in a statement after reducing the seven-day repurchase rate to 2.5 percent, the fifth cut since October.
Ssangyong Motor Co. was suspended from trading after the South Korean automaker filed for court receivership because creditors could not agree on a rescue plan.
Sapporo, the brewer of Yebisu beer, climbed 2.3 percent to 537 yen after saying total sales of beer and beer-like beverages will probably increase 3 percent in 2009. Foster’s Group Ltd., the Australian beer and winemaker, added 3.7 percent to A$5.3. The stock fell 16 percent last year, compared with a 41 percent decline on the benchmark S&P/ASX 200 Index.
Goodman Fielder Ltd., Australia’s largest baker, climbed a record 9.1 percent to A$1.50, the biggest advance since the stock began trading three years ago.
‘Buy Defensives’
“Investors can’t dump all of their shareholdings although equities are hardly attractive to them now,” said Masaru Hamasaki, who helps oversee about $3.3 billion as a senior strategist at Toyota Asset Management Co. in Tokyo. “To shore up their portfolio performance, investors have no choice but to buy defensives like drugmakers and food producers.”
Sa Sa International Holdings Ltd., Hong Kong’s largest cosmetics retailer, soared 9.2 percent to HK$2.02 after reporting higher fourth-quarter sales. CSL Ltd., the world’s second-biggest maker of blood plasma, jumped 6.8 percent to A$32.91.
Measures of health care and consumer staple stocks were two of the three-best performing industry groups last year on the MSCI Asia gauge.
Newcrest, Australia’s biggest gold producer, surged 8.1 percent to A$30.65. Apex Mining Co., the Philippine unit of Crew Gold Corp., jumped 38 percent to 1.96 pesos. Gold futures jumped 1.5 percent yesterday, the most since Dec. 31, as rising numbers of people collecting unemployment pushed the dollar lower.
To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net; Masaki Kondo in Tokyo at mkondo3@bloomberg.net.
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