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Asian Stocks Decline Third Day as Economies Slow, Europe Concern Flares

15 Dec 2011

Asian stocks fell for a third day amid signs of slowing economic growth in China and Japan, and as rising financing costs stoked concern Europe is losing its fight to contain the debt crisis.

HSBC Holdings Plc (5), Europe’s biggest lender, fell 1.4 percent in Hong Kong. Industrial & Commercial Bank of China Ltd., the nation’s No. 1 lender, slid 1.7 percent on a report mainland manufacturing may contract for a second month. Toshiba Corp., a maker of home appliances and power plants, sank 3.8 percent after sentiment among Japanese manufacturers worsened.Olympus Corp. (7733) plunged after restated earnings showed the camera-maker inflated assets by $1.3 billion.

“Europe’s situation doesn’t seem to be moving in a positive direction,” said Naoteru Teraoka, general manager at Tokyo-based Chuo Mitsui Asset Management Co., which oversees about $29 billion. “Japan is highly vulnerable to overseas factors. The euro has fallen a lot against the yen, which is another headache for exporters.”

The MSCI Asia Pacific Index fell 1.6 percent to 111.49 as of 5:48 p.m. in Tokyo, with almost five shares falling for each that rose. The gauge, which tumbled 16 percent from June 30 through yesterday, extended losses this week after Moody’s Investors Service and Fitch Ratings warned that Europe faces lower credit ratings as it struggles to contain its debt crisis.

Japan’s Nikkei 225 Stock Average (NKY) decreased 1.7 percent. South Korea’s Kospi Index dropped 2.1 percent. Australia’s S&P/ASX 200 slid 1.2 percent. Hong Kong’s Hang Seng Index sank 1.8 percent.

China Manufacturing

The Shanghai Composite Index (SHCOMP) fell 2.1 percent, extending losses for a sixth day. Chinese manufacturing may contract for a second month, according to a survey by HSBC and Markit Economics.

ICBC dropped 1.7 percent to HK$4.57 in Hong Kong. Hang Lung Properties Ltd., a Hong Kong-based developer that makes about half of sales in China, declined 2.9 percent to HK$21.95.

Chow Tai Fook Jewellery Co. and New China Life Insurance Co. slumped on their first day of trading in Hong Kong. Chow Tai Fook, the world’s largest-listed jewelry chain, decreased 8 percent to HK$13.80. New China Life, the country’s third-biggest life insurer, sank 9.8 percent to HK$25.70.

Futures on the Standard & Poor’s 500 Index (SPXL1) gained 0.5 percent today, reversing losses of as much as 0.7 percent. The index dropped 1.1 percent in New York yesterday after Italy sold 3 billion euros of five-year notes to yield 6.47 percent, the most since May 1997. German Chancellor Angela Merkel said yesterday there’s no quick fix to the debt crisis.

Financial stocks dropped on concern Europe’s worsening debt crisis will hurt earnings. HSBC fell 1.4 percent to HK$57.90.Westpac Banking Corp. (WBC), Australia’s second-largest lender by market value, dropped 1.6 percent to A$20.46.

‘No Visible Progress’

“There’s no visible progress on Europe’s debt crisis,”said Mitsushige Akino, who oversees about $600 million in Tokyo at Ichiyoshi Investment Management Co. “There are no events that may buoy the mood, and there’s no guarantee that the euro will stop weakening. The euro may drop below 100 yen, compounding the situation for export-related stocks. (MXAP)

A gauge of machinery makers on the Topix Index sank 2.7 percent after the Bank of Japan’s Tankan survey showed sentiment among the nation’s largest manufacturers deteriorated more than economists expected.

Toshiba sank 3.8 percent to 328 yen. Komatsu Ltd. (6301), Japan’s biggest maker of construction equipment, slipped 4.2 percent 1,855 yen.

Japanese exporters and shipping companies also declined as the euro traded near a 10-week low, dimming the earnings outlook for companies that do business in Europe. The Topix’s Maritime Transport Index fell 5 percent, the biggest drop among the gauge’s 33 industry groups.

Nissan Motor Co., Japan’s third-biggest carmaker, declined 2.8 percent to 670 yen. Nintendo Co., the maker of Wii game consoles, lost 2 percent to 10,900 yen. Mitsui O.S.K. Lines Ltd., the nation’s second-largest shipping line by sales, dropped 5.5 percent to 273 yen.