Asian Stocks Swing Between Gains, Losses as Greece Debt Weighs on Outlook

By Sarah Jones - Feb 7, 2012 12:05 PM GMT+0700

Asian stocks swung between gains and losses, with the regional benchmark index trading near a five month high, as investors await the outcome of Greek bailout talks amid warnings Europe’s crisis threatens global demand.

Chinese stocks dropped the most in eight weeks as the Ministry of Industry and Information Technology said the world’s second-largest economy faces more uncertainty at home and abroad. National Australia Bank Ltd. fell after reporting earnings. Japan Tobacco Inc. paced advancing shares after the company raised its earnings forecast.

The MSCI Asia Pacific Index slid 0.1 percent to 124.76 at 2 p.m. in Tokyo after falling as much as 0.2 percent and rising as much as 0.3 percent earlier. Hong Kong’s Hang Seng Index lost 0.2 percent and Japan’s Nikkei 225 Stock Average fell 0.5 percent. The broader Topix Index was little changed.

“Things aren’t great but it’s getting better,” said Angus Gluskie, who oversees about $350 million as managing director at White Funds Management in Sydney. “Investors have been very pessimistic about Europe and we are starting to see some small incremental positives. Greece is reasonably critical for the market, at this stage we all think they will come up with some sort of agreement.”

In Australia, the S&P/ASX 200 Index fell 0.4 percent after the nation’s central bank unexpectedly kept its benchmark interest rate unchanged. South Korea’s Kospi Index climbed 0.1 percent today.

Greek Prime Minister Lucas Papademos began a second round of negotiations with international creditors in Athens to stave off default as political leaders waver on budget measures. The country still needs to detail 600 million euros ($787 million) of fiscal measures for 2012, a government official said in Athens yesterday.

China Growth Threat

In China, SAIC Motor Corp. fell 1.4 percent to 15.03 yuan after the nation’s largest carmaker said sales declined last month by 8.5 percent.

Shanghai’s Composite Index fell 1.9 percent, the most since Dec. 15, as Zhu Hongren, spokesman for the Ministry of Industry and Information Technology, told a press briefing in Beijing that China’s industrial output growth is likely to slow.

“The global economy is slowing down, Europe’s sovereign debt crisis is deepening and the downside risks to the world economy are rising with international demand still slack and global commodities and financial markets continuing to be volatile,” the ministry said in a statement issued before today’s briefing.

The comments come a day after the International Monetary Fund estimated China’s economic expansion could slow by 4 percentage points from the fund’s current projection of 8.2 percent this year should Europe’s crisis worsen.

Copper, Banks

Jiangxi Copper Co. declined 2.2 percent to HK$20.25, leading commodity producers lower as copper retreated on the London Metal Exchange.

Elsewhere, National Australia Bank Ltd. lost 3.7 percent to A$23.28 after Chief Executive Officer Cameron Clyne said earnings were hurt by lower lending margins and a jump in bad debts in the U.K. The bank today reported cash profit for the three months ended Dec. 31 of A$1.4 billion ($1.5 billion). That’s up 7.7 percent from a year earlier.

Japan Tobacco gained 5.2 percent to 405,500 yen in Tokyo after the company raised its annual profit forecast as sales recovered faster than expected after the March earthquake. Full- year revenue is expected to rise 4.4 percent.

Japanese shipping companies also advanced after the Baltic Dry Index, a gauge of cargo rates, climbed for the first time since Dec. 12. Kawasaki Kisen Kaisha Ltd. advanced 1.3 percent to 157 yen, Nippon Yusen K.K. increased 0.9 percent to 215 yen and Mitsui O.S.K. Lines Ltd. gained 2.2 percent to 329 yen.

Cochlear Ltd. jumped 7.5 percent to A$62.49 in Sydney after the maker of the world’s top-selling ear implant reported a first-half loss of A$20.4 million, smaller than analyst estimates.

To contact the reporter on this story: Sarah Jones in Sydney at sjones35@bloomberg.net

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