By Jonathan Burgos and Anna Kitanaka
Dec. 8 (Bloomberg) -- Most Asian stocks declined, led by finance and energy companies, after Federal Reserve Chairman Ben S. Bernanke said the U.S. economy faces “formidable headwinds.”
Canon Inc., which gets 28 percent of its revenue from the Americas, declined 1.1 percent in Tokyo. PetroChina Co. lost 1.4 percent in Hong Kong after oil prices fell. Tokyo Tatemono Co. tumbled 7 percent after shareholders cut their stakes in the developer. Nintendo Co., which makes the Wii game console, gained 1.4 percent after a market researcher said the company’s new Super Mario Bros. title broke a sales record.
The MSCI Asia Pacific Index was little changed at 120.61 as of 5:03 p.m. in Tokyo, with five stocks declining for every four that rose. The gauge has rallied 71 percent from a five-year low on March 9 on signs stimulus measures were reviving global growth.
“The market is looking for guidance for stronger profit growth,” said Shane Oliver, head of investment strategy at Sydney-based AMP Capital Investors, which oversees about $89 billion globally. “Whenever anyone makes a negative comment or cautious comment like Bernanke did, it obviously upsets the market a little bit.”
The Nikkei 225 Stock Average slipped 0.3 percent in Japan, where the government unveiled a 7.2 trillion yen ($81 billion) economic spending package. South Korea’s Kospi Index sank 0.3 percent in Seoul.
China’s Shanghai Composite Index fell 1.1 percent, while Hong Kong’s Hang Seng Index dropped 1.2 percent. Pacific Basin Shipping Ltd., Hong Kong’s largest operator of dry-bulk vessels, fell 1.6 percent after freight rates fell.
Financial Shares
Australia’s S&P/ASX 200 Index lost 0.1 percent even as business confidence rose in November to its highest level in more than seven years. Commonwealth Bank of Australia dropped 1.3 percent as Nomura Holdings Inc. said plans by regulators to improve banks’ capital strength will erode profits.
Futures on the Standard & Poor’s 500 Index were little changed. The gauge lost 0.3 percent yesterday, with financial shares leading the drop. The Fed’s Bernanke said the U.S. economy “confronts some formidable headwinds that seem likely to keep the pace of expansion moderate.”
Stocks have rallied in the past nine months on signs lower interest rates and more than $2 trillion of government spending were lifting economies around the world out of recession. Australian business confidence climbed last month to its highest level since May 2002, while Thailand’s consumer confidence rebounded, according to reports released today.
Government Support
Japanese corporate bankruptcies fell for a fourth month in November to their lowest level in almost two years, a sign that government measures to support smaller firms are working. Including the package announced today, the Japanese government has earmarked more than 29 trillion yen to boost the economy since September 2008.
Canon, the world’s largest camera maker, declined 1.1 percent to 3,710 yen. Foxconn International Holdings Ltd., the world’s biggest contract maker of mobile-phones, slumped 2.8 percent to HK$8.07.
Nintendo climbed 1.4 percent to 21,880 yen. The company’s “New Super Mario Bros. Wii” sold 937,000 copies in Japan in its first four days, the best domestic debut for a Wii console game, according to market researched Enterbrain Inc.
“The consensus view is that we’ll have more moderate growth than we did coming out of previous downturns,” said Matt Riordan, who helps manage about $5.1 billion at Paradice Investment Management in Sydney. “The companies we’re talking to are seeing signs of things improving. The big question from where we sit now is the speed by which it happens.”
Rally Since March
The MSCI Asia Pacific Index’s rally from its March low has outpaced gains of 63 percent by the S&P 500 and 57 percent for Europe’s Dow Jones Stoxx 600 Index. Stocks in MSCI’s Asian index are valued at 22 times estimated earnings, compared with 18 times for the S&P 500 and 16 times for the Stoxx 600.
Mitsui & Co., which gets half of its sales from commodities, dropped 1.6 percent to 1,276 yen. Jiangxi Copper Co., China’s biggest producer of the metal, slipped 1.1 percent to 42.62 yuan in Shanghai.
The London Metals Index, a gauge of six metals including aluminum and copper, fell 0.8 percent yesterday, taking a three- day decline to 2.1 percent.
PetroChina, the nation’s biggest oil producer, fell 1.4 percent to HK$9.69. Inpex Corp., Japan’s largest oil explorer, lost 0.6 percent to 679,000 yen. Crude oil for January delivery dropped 2 percent to $73.93 a barrel yesterday in New York, extending losses for a fourth day.
Australian Banks
Tokyo Tatemono slumped 7 percent to 304 yen. Mizuho Corporate Bank slashed its stake in the developer to 10.08 percent from 5.51 percent while Morgan Stanley Japan Securities Co. cut its shares to 5.35 percent from 6.08 percent, according to filings to Japan’s Ministry of Finance.
Commonwealth Bank of Australia, the nation’s largest mortgage lender, dropped 1.3 percent to A$53.09. National Australia Bank Ltd., the country’s third-biggest lender, dipped 0.4 percent to A$27.89.
Nomura said liquidity rules proposed by the Australian Prudential Regulation Authority would force the country’s four- biggest banks to sell more bonds overseas, increasing funding charges and eroding as much as A$440 million annually from each bank’s profit.
Shipping stocks declined after the Baltic Dry Index, which measures the cost of shipping commodities, dropped 1.7 percent yesterday in London, snapping three days of gains.
Pacific Basin fell 1.6 percent to HK$6.04. China Cosco Holdings Co., the world’s largest operator of dry-bulk vessels, dipped 3.1 percent to 15.01 yuan in Shanghai. Mitsui O.S.K. Lines Ltd., the world’s largest operator of iron-ore vessels, dropped 3.3 percent to 498 yen.
Paperlinx Ltd., an Australian supplier of office paper, magazines and packaging materials, advanced 8.8 percent to 55.5 Australian cents after Merrill Lynch & Co. upgraded the stock to “buy” and Credit Suisse Group AG raised it to “neutral.” Both banks previously rated the stock “underperform.”
To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Anna Kitanaka in Tokyo at akitanaka@bloomberg.net.
Last Updated: December 8, 2009 04:05 EST
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