Asian Stocks Decline on U.S. Economy

By Jonathan Burgos - Nov 23, 2011 8:46 AM GMT+0700

Asian stocks fell, with a regional gauge heading for its lowest close in a month, after a mining tax was approved in Australia’s lower house of parliament and a report showed slower-than-expected economic growth in the U.S.

Samsung Electronics Co. (005930), South Korea’s biggest exporter of consumer electronics, slid 2.4 percent in Seoul on speculation exports will drop as growth in the world’s biggest economy slows. BHP Billiton Ltd. (BHP), the world’s biggest mining company, declined 1.9 percent in Sydney after Australia’s House of Representatives passed a law taxing mining profits. AirAsia Bhd. (AIRA) slipped 4.9 percent in Kuala Lumpur after the budget carrier reported a 53 percent decline in profit.

“Europe is probably already in recession and that’s going to hurt demand for U.S. exports and put downward pressure on U.S. growth,” Alan Gayle, a senior strategist at RidgeWorth Capital Management in Richmond, Virginia, which oversees about $44 billion, said in a Bloomberg Television interview. “The Federal Reserve is going to continue to do all that it can to support the economy. The more important question to the market is how effective would they be.”

The MSCI Asia Pacific excluding Japan Index fell 1.2 percent to 383.98 as of 9:41 a.m. in Hong Kong, poised for its lowest close since Oct. 7. Stocks retreated this month as surging bond yields in Italy and Spain added to evidence Europe’s sovereign debt crisis is spreading to major economies.

Australia’s S&P/ASX 200 slid 1.1 percent, while South Korea’s Kospi Index declined 1.6 percent. Hong Kong’s Hang Seng Index dropped 1.7 percent and China’s Shanghai Composite Index added 0.2 percent. Japanese markets are closed today for a holiday.

U.S. Futures

Futures on the Standard & Poor’s 500 Index (SPX) fell 0.9 percent today. The measure dropped 0.4 percent in New York yesterday, extending its longest slump in almost four months, as slower- than-estimated economic growth overshadowed signs the Federal Reserve may provide more stimulus.

Exporters fell after a revised Commerce Department report showed that U.S. gross domestic product climbed at a 2 percent annual rate from July through September, less than projected and down from a 2.5 percent prior estimate. Fed officials said the central bank should consider easing policy further, according to minutes of their Nov. 1-2 meeting.

Raw material producers dropped as BHP Billiton, Rio Tinto Group and other iron-ore and coal suppliers and producers face paying about A$11 billion ($10.8 billion) in extra charges in the first three years of the mining tax passed by the lower house of Australia’s parliament yesterday.

The MSCI Asia Pacific excluding Japan Index declined 18 percent this year through yesterday, compared with a 5.5 percent loss by the S&P 500 and a 19 percent drop by the Stoxx Europe 600 Index. Stocks (MXAPJ) in the Asian benchmark are valued at 11.2 times estimated earnings on average, compared with 12 times for the S&P 500 and 9.8 times for the Stoxx 600.

To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net.

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net