Most Asian Stocks Decline as European Deficit Concerns Increase

VNStockNews.com - Most Asian stocks fell, led by banks and material companies, amid mounting concern budget deficits in Europe will derail the global economic recovery.

Macquarie Group Ltd., Australia’s largest investment bank, slumped 6.2 percent after its second-half profit forecast disappointed some investors. Westpac Banking Corp. dropped 2.5 percent as the cost of protecting Australian government bonds from default jumped. Mitsubishi Materials Corp., Japan’s No. 3 copper producer, sank 2.6 percent as it swung to a nine-month net loss. Toshiba Corp. fell 2.6 percent after Nikkei English News reported the company and its partners lost a bid in Vietnam.

About five stocks declined for every three that rose on the MSCI Asia Pacific Index, which fell 0.2 percent to 113.94 as of 11:16 a.m. in Tokyo. The gauge has fallen 10 percent from a 17- month high on Jan. 15 on speculation central banks will tighten monetary policy, and that Greece, Spain and Portugal will struggle curbing deficits.

“Investors remain cautious as the correction continues,” said Tim Schroeders, who helps manage $1.1 billion at Pengana Capital Ltd. in Melbourne. “Markets are climbing the wall of worry and are yet to be fully convinced that a workable solution is in the offing regarding highly-indebted European countries such as Greece and Spain.”

Japan’s Nikkei 225 Stock Average lost 0.4 percent, while South Korea’s Kospi index added 0.6 percent. Australia’s S&P/ASX 200 Index declined 0.8 percent. Hong Kong’s Hang Seng Index gained 0.4 percent.

Government Bonds

Futures on the U.S. Standard & Poor’s 500 Index added 0.1 percent. Europe concerns dragged the gauge down by 0.9 percent yesterday. Credit-default swaps, or the cost of insuring against losses on sovereign debt, on Spain and Portugal jumped to a record, according to CMA DataVision. Those for Greece also hovered near an all-time high.

Macquarie slipped 6.2 percent to A$47.21. The company said net income in the six months to March 31 may climb 10 percent from the first half. That indicates second-half profit of A$526.9 million ($457 million), below the A$586 million average estimate of three analysts surveyed by Bloomberg.

Today’s forecast is “slightly below the more bullish analysts,” said Angus Gluskie, who oversees $300 million at White Funds Management Pty in Sydney. “Some investors were looking for a greater upgrade, so on a short-term basis are happy to close out positions given the softness in the market.”

Sales Slump

Westpac Banking, Australia’s second-largest lender by market value, sank 2.5 percent to A$22.68. Commonwealth Bank of Australia, the largest, lost 1.7 percent to A$51.85. The cost of protecting Australian government bonds from default jumped to almost a nine-month high today, according to Deutsche Bank AG.

Mitsubishi Materials slumped 2.6 percent to 223 yen. The company said it swung to a nine-month net loss of 31.7 billion yen from net income of 19.6 billion yen a year earlier, as sales dropped by a third.

Toshiba fell 2.6 percent to 412 yen. Toshiba, Mitsubishi Heavy Industries Ltd., and Hitachi Ltd., which together bid for a nuclear plant project in Vietnam, lost the order to Russia’s state-run Rosatom, Nikkei English News reported, citing sources it didn’t identify. Hitachi and Mitsubishi Heavy Industries both dropped at least 1 percent.

Koito Industries Ltd., which makes seats for trains and airplanes, plunged 34 percent to 159 yen. The company will fix about 150,000 passenger seats in some 1,000 commercial airliners after saying that it falsified test results and made unauthorized design changes.

Among stocks that rose today, Sumitomo Mitsui Financial Group Inc., Japan’s No. 2 bank by value, increased 1.8 percent to 2,825 yen after profit beat analyst estimates. NCSoft Corp., an on-line games developer, advanced 2.1 percent to 123,000 won in Seoul as it reported increased quarterly profit.

In Sydney, David Jones Ltd., Australia’s second-biggest department store chain, advanced 1.3 percent to A$4.67. David Jones raised its earnings forecast after posting 2.4 percent sales growth for the second-quarter.

Cochlear Ltd., maker of the world’s best-selling hearing implant, climbed 4.4 percent to A$64.08 after first-half profit rose 8 percent on new product sales. (Bloomberg)