By Darren Boey and Jonathan Burgos
Nov. 3 (Bloomberg) -- Asian stocks fell, led by banks and energy companies, as UBS AG and Suzlon Energy Ltd. posted wider- than-estimated losses amid investor concern the withdrawal of stimulus measures will cause the global recovery to falter.
National Australia Bank Ltd. sank 1.8 percent as the country’s central bank raised interest rates for the second time in four weeks. Sino Land Co. dropped 4.1 percent in Hong Kong on concern the government will enact measures to curb property speculation. India’s Suzlon Energy and Reliance Communications Ltd. slumped more than 3 percent after their quarterly results missed analyst estimates.
The MSCI Asia Pacific excluding Japan Index lost 1.3 percent to 383.83 as of 4:58 p.m. in Hong Kong, with two stocks declining for each that rose. The gauge has surged 87 percent from a three-month low on March 2 on signs government stimulus measures are reviving the global economy.
“We’re tending towards the view that we will see some relapse next year as people basically lose faith in governments’ ability to continue to come to the rescue,” said Peter Elston, a Singapore-based strategist at Aberdeen Asset Management Plc, which had about $234 billon under management as of Sept. 30.
Japanese markets are closed for a holiday. Hong Kong’s Hang Seng Index fell 1.8 percent, South Korea’s Kospi Index lost 0.6 percent and India’s Sensitive Index declined 1.6 percent. China’s Shanghai Composite Index climbed 1.2 percent.
Among stocks that gained today, Hyundai Motor Co. added 2.9 percent in Seoul as Ford said it expects to be “solidly profitable” in 2011. Zijin Mining Group Co., China’s No. 1 gold producer, rose 1.4 percent in Hong Kong after the precious metal climbed to a one-week high.
U.S. Factory Index
Futures on the U.S. Standard & Poor’s 500 Index lost 0.6 percent, reversing earlier gains, as UBS, Switzerland’s largest bank, reported a fourth consecutive quarterly loss and Lloyds Banking Group Plc announced a $34 billion rights offer. The S&P 500 advanced 0.7 percent yesterday as the Institute for Supply Management’s factory index rose to a three-year high.
National Australia Bank, the country’s third-largest by market value, lost 1.8 percent to A$28.39, while Westpac Banking Corp., the second biggest, dropped 0.6 percent to A$25.43.
Australia’s central bank raised its overnight cash rate target to 3.5 percent from 3.25 percent, as forecast by 18 of 22 economists surveyed by Bloomberg News. The rest expect a half- point increase.
Australia on Oct. 6 became the first Group of 20 nation to raise interest rates amid signs of strength in its economy, while the Bank of Japan said last week it will let its programs of buying corporate debt expire at the end of the year.
October Decline
Investor concern about the withdrawal of stimulus policies have helped drag the MSCI Asia Pacific Index, which includes Japan, down by 5.2 percent from this year’s high on Oct. 20. The U.S. must increase stimulus spending or risk “many years of high unemployment,” Nobel Prize-winning economist Paul Krugman wrote in the New York Times yesterday.
The MSCI measure lost 1.3 percent last month, the first drop since February. Stocks on the gauge trade at an average 22 times estimated profit, the lowest level since May 14, according to Bloomberg data. That’s still higher than the 13.7 times at the start of the year.
“Further improvements in the economic and corporate news will help justify valuations,” said Jason Teh, who helps manage $3.2 billion at Investors Mutual in Sydney. “A lot of stocks have had a good run, making it harder to find value in this market.”
Suzlon, the country’s biggest maker of wind-turbine generators, tumbled 11 percent to 59.70 rupees as its loss in the three months ended Sept. 30, including that of units, widened on slowing equipment orders.
Government Stabilization
Reliance Communications, India’s second-largest mobile- phone operator, slumped 3.3 percent to 170.05 rupees. The company on Oct. 31 reported a 52 percent tumble in second- quarter net income.
In Hong Kong, Sino Land dropped 4.1 percent to HK$14.10. Sun Hung Kai Properties Ltd., Hong Kong’s No. 1 property developer by market value, declined 3.6 percent to HK$113.60.
Hong Kong Chief Executive Donald Tsang said yesterday the government is “closely” monitoring the local property market and has tools available to stabilize it if necessary. The Hong Kong Monetary Authority last month raised down-payment requirements for luxury homes for the first time since 1991.
“People seem to have recognized that their dream about continually rising property shares has burst,” said Castor Pang, a research director at CINDA International Holdings Ltd., a Hong Kong brokerage.
Hyundai Motor
In Seoul, Hyundai Motor rose 2.9 percent to 105,000 won. The company controlled 4.4 percent of the U.S. auto market at the end of September, according to Autodata Corp. Kia Motors Corp., which got 30 percent of its revenue last year in North America, gained 2.8 percent to 18,150 won.
Ford, the only major U.S. automaker to avoid bankruptcy, posted a quarterly pretax profit of $1.1 billion, or 26 cents a share, compared with a year-earlier loss of $3 billion, or $1.32. Ford beat the 20 cents a share adjusted loss estimated by an average of 11 analysts surveyed by Bloomberg.
Zijin Mining rose 1.4 percent to HK$7.77 after gold futures in New York gained 1 percent in after-hours trading. Prices jumped 1.3 percent to $1,054 an ounce in New York yesterday, the highest closing level since Oct. 23.
Newcrest Mining Ltd., Australia’s largest gold producer, climbed 3.9 percent to A$33.38, while Lihir Gold Ltd. added 4.3 percent to A$3.17.
To contact the reporters for this story: Darren Boey in Hong Kong at dboey@bloomberg.net; Jonathan Burgos in Singapore at jburgos4@bloomberg.net.
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