Most Asian Stocks Fall, Euro Weakens

By Shiyin Chen - Jan 2, 2012 9:08 AM GMT+0700

Most Asian stocks (MXAPJ) declined on the first trading day of 2012, while the South Korean won and the euro weakened on concern the global economic recovery will be hampered as Europe’s debt crisis enters a new year.

More than two shares retreated (MXAP) for every one that rose on the MSCI Asia Pacific excluding Japan Index, which retreated 0.1 percent at 9:17 a.m. in Hong Kong. Financial markets from Japan to Hong Kong and the U.S. are closed for a holiday. The won fell 0.2 percent to 1,154.75 per dollar and the euro retreated 0.1 percent to $1.2943. Silver advanced as much as 0.2 percent to $27.8875 per ounce, set for a third day of gains.

Indexes of stocks and commodities had the worst yearly returns since the financial crisis in 2008. South Korea said yesterday export growth will slow this year and Singapore’s government said its economy grew less than previously forecast in 2011. Data today may confirm European manufacturing shrank for a fifth straight month, as regional leaders return to work from the Christmas holidays seeking to buy time to rescue the single currency from fragmentation.

Taiwan’s Taiex Index (TWSE) slipped 0.4 percent, while South Korea’s Kospi Index gained 0.5 percent. India’s SGX S&P CNX Nifty Index futures climbed 0.3 percent after the government said yesterday it will allow overseas individual investors to directly buy local equities.

South Korea’s export growth will probably slow to 6.7 percent this year from 19.6 percent in 2011, the Ministry of Knowledge Economy said yesterday. Separately, Singapore’s Prime Minister Lee Hsien Loong said the island’s gross domestic product rose 4.8 percent in 2011, compared with the government’s earlier forecast of a 5 percent increase, and said the economy will expand 1 percent to 3 percent in 2012.

Data yesterday showed China’s purchasing managers’ index climbed to 50.3 in December from 49 in November, beating all forecasts in a Bloomberg News survey of 15 economists. A gauge of euro-region manufacturing was 46.9 in December from 46.4 the previous month, according to economists surveyed (PMITMEZ) by Bloomberg News before Markit Economics releases the data today. A reading below 50 indicates contraction.

To contact the reporter on this story: Shiyin Chen in Singapore at schen37@bloomberg.net

To contact the editor responsible for this story: Richard Dobson at rdobson4@bloomberg.net