By Shani Raja
Nov. 17 (Bloomberg) -- Most Asian stocks fell, dragging the MSCI Asia Pacific Index from a three-week high, as Federal Reserve Chairman Ben S. Bernanke said “significant” challenges remain to revive the world’s biggest economy.
Westpac Banking Corp. lost 2.3 percent in Sydney, where Australia’s central bank said the pace of interest-rate increases is an “open question.” Hynix Semiconductor Inc. sank 6.6 percent after the Electronic Times said creditors will sell as much as 15 percent of the company. Korea Zinc Co. and Alumina Ltd. climbed more than 3 percent after commodities gained.
About two stocks declined for each one that rose on the MSCI Asia Pacific Index, which lost 0.2 percent to 119.10 as of 4:26 p.m. in Tokyo. It closed yesterday at the highest level since Oct. 26. Signs of a global recovery drove the measure up by 69 percent from a more than five-year low on March 9.
“The market’s been doing pretty well in grinding to higher levels over a long period of time, but it’s not without danger,” said Tim Schroeders, who helps manage $1.1 billion at Pengana Capital Ltd. in Melbourne. “What we’re seeing is a period of consolidation. Things don’t just go up in a straight line forever.”
Japan’s Nikkei 225 Stock Average lost 0.6 percent and Hong Kong’s Hang Seng Index was little changed. Australia’s S&P/ASX 200 Index fell 0.5 percent, while South Korea’s Kospi Index declined 0.4 percent.
China Metal Recycling Holdings Ltd., the country’s largest recycler of scrap metal by sales, tumbled 24 percent in Hong Kong after its chief financial officer resigned.
Retail Sales
GCL-Poly Energy Holdings Ltd. was suspended from trade as it said it will take a charge stemming from the overvaluation of an asset. Among stocks that gained, Canon Inc. rose 3 percent in Tokyo after agreeing to buy Oce NV, the world’s largest maker of wide-format printers.
Futures on the Standard & Poor’s 500 Index lost 0.1 percent. The gauge rose 1.5 percent yesterday after government figures showed retail sales increased 1.4 percent in October after dropping in September. The advance beat an estimate of a 0.9 percent gain by economists in a Bloomberg News survey.
Bernanke said yesterday economic “headwinds” of reduced bank lending and a weak labor market will probably restrain the pace of the U.S. economic recovery, warranting continued low borrowing costs.
His comments follow a statement from the Asia-Pacific Economic Cooperation forum at the weekend that it will keep spending until there was “durable” growth. The MSCI Asia Pacific Index has lost 1.7 percent from a 13-month high on Oct. 20 on concern governments will withdraw stimulus measures.
‘Balancing Risks’
Japan’s economy grew more in the third quarter as capital spending rose 1.6 percent, the government reported yesterday. Even so, Prime Minister Yukio Hatoyama said on Nov. 14 at the APEC meeting in Singapore that the economy remains “worrisome.”
Australian central bank policy makers “were conscious of balancing risks” in considering the pace of interest-rate increases, officials said in minutes released today of their Nov. 3 meeting, at which they raised borrowing costs for a second time this year. Countries in the Group of 20 have provided about $12 trillion to revive the global economy, according to International Monetary Fund data.
Westpac sank 2.3 percent to A$24.70, while Commonwealth Bank of Australia lost 2.5 percent to A$52.64.
Hynix slumped 6.6 percent to 18,400 won after the Electronic Times reported creditors will sell as much as 15 percent of the company in a block transaction if no potential bidders emerge by Dec. 15.
Mining Stocks Advance
The MSCI Asia Pacific Index’s rally since March outpaced gains of 64 percent for the S&P 500 and 59 percent for Europe’s Dow Jones Stoxx 600 Index. Stocks in the MSCI gauge are valued at 22 times estimated earnings, compared with 18 times for the S&P and 16 times for the Stoxx.
Korea Zinc gained 3.2 percent to 211,500 won, while Alumina climbed 3.4 percent to A$1.685. BHP Billiton Ltd., the world’s largest miner and Australia’s largest oil producer, added 1 percent to A$40.50.
Crude oil for December delivery jumped 3.3 percent to $78.90 a barrel in New York yesterday, the largest increase since Sept. 30. The London Metals Index, a measure of six metals including copper and zinc, climbed 4.7 percent yesterday, the biggest gain since Aug. 3.
In Tokyo, Canon gained 3 percent to 3,470 yen after the Japanese electronics maker agreed to buy Oce of the Netherlands for about 730 million euros ($1.1 billion).
Counter Bid
Konica Minolta Holdings Inc., a maker of film used in liquid-crystal displays, said it had no plans to counter Canon’s offer for OCE. Konica slumped 5.3 percent to 836 yen after Ryosuke Katsura, an analyst at Mizuho Securities, cut the stock’s rating to “neutral” from “outperform.”
China Metal Recycling plunged 24 percent to HK$8.62. It said in a statement Chief Financial Officer Wong Hok-leung had resigned because “he had been denied proper access to the financial information of the company.”
“The market is very sensitive to this kind of corporate governance issues nowadays so the stock just smashed to the floor,” said Castor Pang, a Hong Kong-based research director at Cinda International Holdings Ltd.
GCL Poly, a Hong Kong-listed power-station operator, was suspended from trading. The company said it will take an estimated charge of HK$9 billion ($1.16 billion) after independent experts reduced the value of a solar-power company the company bought in July. The stock last traded at HK$2.31 on Nov. 13.
To contact the reporter for this story: Shani Raja in Sydney at sraja4@bloomberg.net.
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