Asian Stocks Decline as Greece Rating Cut Dents Recovery Hopes

By Shani Raja and Jonathan Burgos

Dec. 9 (Bloomberg) -- Asian stocks fell, led by finance and mining companies, after Japan’s economy grew more slowly than estimated and Fitch cut Greece’s credit rating, denting confidence in the global economic recovery.

Mitsubishi UFJ Financial Group Inc., Japan’s biggest publicly traded bank, sank 5.2 percent in Tokyo. Nissan Motor Co., a Japanese automaker that gets 35 percent of its revenue from North America, slumped 3.4 percent as the dollar weakened against the yen. Newcrest Mining Ltd., Australia’s largest gold producer, slipped 1.6 percent after the price of the metal dropped for a fourth day.

“Investor sentiment is worsening because of the reignited uncertainty about credit,” said Naoteru Teraoka, who helps oversee about $16 billion in Tokyo at Chuo Mitsui Asset Management Co. “There’s uncertainty about the future and companies are cautious.”

The MSCI Asia Pacific Index declined 0.6 percent to 120.19 as of 6:07 p.m. in Tokyo. The gauge has rallied 70 percent from a five-year low on March 9 on signs stimulus measures were reviving global growth. Japan’s Nikkei 225 Stock Average dropped 1.3 percent as the Cabinet Office said the economy expanded less than initially estimated in the third quarter.

Hong Kong’s Hang Seng Index fell 1.4 percent. Standard Chartered Plc dropped 4.2 percent after CLSA Asia-Pacific Markets recommended investors sell the stock.

China Lending Curbs

The Shanghai Composite Index fell 1.7 percent, extending yesterday’s 1.1 percent drop, on concern the government will curb new lending to avert asset bubbles. Industrial Commercial Bank of China Ltd., the nation’s biggest lender, fell 1.5 percent.

Australia’s S&P/ASX 200 Index lost 0.7 percent as reports showed consumer confidence fell in December and home-loan approvals dropped in October. Woolworths Ltd., the nation’s largest retailer, dropped 1.7 percent, while Australia & New Zealand Banking Group Ltd. dipped 1.9 percent.

New Zealand’s NZX 50 Index slipped 0.3 percent in Wellington, even as Finance Minister Bill English said the nation’s economic outlook was improving.

Futures on the Standard & Poor’s 500 Index added 0.2 percent. The gauge declined 1 percent yesterday, led by commodity producers. Fitch cut Greece’s credit rating one step to BBB+, the third-lowest on the investment-grade scale, and said the outlook for the rating is negative. Standard & Poor’s yesterday put the country’s rating on watch for a downgrade.

‘Sense of Indecision’

“There’s a sense of indecision,” said Nader Naeimi, a Sydney-based strategist at AMP Capital Investors, which oversees about $75 billion. “The fact that Greece has been downgraded is going to upset the market in the short term.”

Separately, Nakheel PJSC, the Dubai World property developer, posted a first-half loss of 13.4 billion dirhams ($3.65 billion) as it wrote down the value of land and property, according to a document obtained by Bloomberg News.

Dubai World roiled global markets two weeks ago after seeking to delay debt repayments. It last week began talks with banks to restructure $26 billion of debt, including a $3.52 billion Islamic bond of Nakheel’s maturing on Dec. 14.

Mitsubishi UFJ was the biggest drag on MSCI Asia Pacific Index, dropping 5.2 percent to 477 yen. Sumitomo Mitsui Financial Group Inc., Japan’s second-biggest bank by value, slipped 2.7 percent to 2,740 yen. Mizuho Financial Group Inc., the nation’s No. 3 lender by market value, sank 3 percent to 161 yen.

Japan GDP Revision

Japan’s gross domestic product rose at an annual pace of 1.3 percent, slower than the 4.8 percent reported in preliminary figures last month, the Cabinet Office said today. The revised figure was also lower than the predictions of all but one of the 17 economists surveyed by Bloomberg News.

The Japanese government yesterday unveiled a 7.2 trillion yen ($81 billion) economic stimulus package, bringing to more than 29 trillion yen the amount of spending to boost the economy since September 2008.

In Shanghai, ICBC, as the world’s most profitable bank is known, dropped 1.5 percent to 5.22 yuan. China Construction Bank Corp., the nation’s second-biggest lender, slipped 1.3 percent to 6 yuan.

The China Banking Regulatory Commission will “strictly control lending to industries that are energy-intensive, polluting and have overcapacity, and raise the quality of lending,” Chairman Liu Mingkang said late yesterday. Overall, it will “increase regulatory supervision,” the official said.

Japanese exporters declined as the stronger yen threatened to reduce the value of overseas revenue at the companies when converted into their home currency.

Japan Exporters Decline

Nissan slumped 3.4 percent to 711 yen. Sony Corp., an electronics maker that gets 24 percent of revenue in the U.S., lost 2.9 percent to 2,510 yen. Canon Inc., the world’s biggest maker of office equipment, declined 1.6 percent to 3,650 yen.

The yen appreciated to as high as 87.79 against the dollar in early trading today in Tokyo, compared with 88.90 at the 3 p.m. close of stock trading yesterday. Against the euro, Japan’s currency strengthened to as much as 129.18 from 131.96.

“Concerns remain about currencies as well as overseas credit risks,” said Hiroichi Nishi, an equities manager at Nikko Cordial Securities Inc. in Tokyo.

The MSCI Asia Pacific Index’s rally from the March low has outpaced gains of 61 percent by the S&P 500 and 54 percent for Europe’s Dow Jones Stoxx 600 Index. Stocks in the benchmark are valued at 22 times estimated earnings, compared with 17 times for the S&P 500 and 15 times for the Stoxx.

Australian Consumer Confidence

In Sydney, Woolworths slipped 1.7 percent to A$26.96. Harvey Norman Holdings Ltd., Australia’s biggest electronics retailer, dropped 2.6 percent to A$4.12.

The country’s consumer confidence fell in December after central bank Governor Glenn Stevens increased borrowing costs for an unprecedented third straight month, according to a survey by Westpac Banking Corp. and the Melbourne Institute.

The number of loans granted to build or buy houses and apartments in Australia dropped 1.4 percent in October from the previous month, when they gained a revised 3.3 percent, the country’s statistics bureau said today.

ANZ Bank, the nation’s fourth-largest lender, dropped 1.9 percent to A$21.51. Westpac lost 1.1 percent to A$23.59.

In Hong Kong, Standard Chartered declined 4.2 percent to HK$182.20. CLSA Asia-Pacific Markets cut its recommendation on the stock to “sell” from “underperform.” It was CLSA’s second downgrade of Standard Chartered in two weeks after Dubai World attempted to reschedule its debt.

Miners Slide

Newcrest lost 1.6 percent to A$35.17. Sumitomo Metal Mining Co., Japan’s biggest gold producer, dropped 2.6 percent to 1,403 yen. Zijin Mining Group Co., China’s biggest producer of the metal, slipped 1.7 percent to HK$8.12 in Hong Kong. Gold futures in New York fell 1 percent to $1,132.20 an ounce in New York, the fourth day of declines.

“There was a whole host of negative issues that gave people an excuse to cut back on risky positions,” said Chris Weston an institutional dealer at IG Markets in Melbourne. “People seem quite happy to sit on the sidelines until the new year.”

BHP Billiton Ltd., the nation’s biggest oil producer, fell 1.2 percent to A$40.55. Crude oil dropped 1.8 percent to $72.62 a barrel yesterday, the lowest settlement since Oct. 9. Oil rose 1 percent today.

Woodside Petroleum Ltd., Australia’s second-largest oil producer, slipped 2.1 percent to A$47.17. Mitsui & Co., which gets half of its sales from energy and metals, declined 3.3 percent to 1,234 yen.

New Zealand Oil & Gas Ltd., the country’s biggest publicly traded explorer, lost 1.1 percent to NZ$1.77. New Zealand could do better than expected in the May budget, Finance Minister Bill English told parliament’s finance & expenditure select committee in Wellington today.

To contact the reporters on this story: Shani Raja in Sydney at sraja4@bloomberg.net; Jonathan Burgos in Singapore at jburgos4@bloomberg.net.