Most Asian Stocks Drop on Valuation Concern; Samsung Advances
Most Asian stocks declined amid concerns a rally that took the MSCI Asia Pacific Index to a 10- week high yesterday had overvalued earnings prospects.
BHP Billiton Ltd. lost 0.8 percent, leading declines by material producers, the region’s best performing stocks in the past five days. Samsung Electronics Co. increased 2 percent in Seoul after the Korea Economic Daily reported the company’s semiconductor business may achieve its full-year profit target during the first half. Canon Inc., which gets about 28 percent of sales from the Americas, gained 0.9 percent in Tokyo as a weaker yen boosted the prospects for exporters’ earnings.
Seven stocks declined for every six that rose on the MSCI Asia Pacific Index, which lost 0.2 percent to 125.68 as of 11:29 a.m. in Tokyo. The gauge has climbed 10 percent from a more- than-two-month low on Feb. 8 as improving U.S. jobs data, a Federal Reserve pledge to keep borrowing costs low and a Japanese bank-lending program eased concern that budget deficits in Europe will derail the revival in the global economy.
“Investors may sell shares to lock in profits as stocks have traded at a relatively high level,” said Hiroichi Nishi, an equities manager at Nikko Cordial Securities Inc.
Japan’s Nikkei 225 Stock Average rose 0.3 percent, taking its climb this month to 9.9 percent. The average price of stocks in the gauge climbed yesterday to 39 times estimated profit, the highest level among key stock gauges in the world’s biggest markets, according to data compiled by Bloomberg.
China’s Shanghai Composite Index dropped 0.5 percent. Australia’s S&P/ASX 200 Index sank 0.2 percent in Sydney, where government data released today showed retail sales unexpected fell in February. New Zealand’s NZX 50 Index rose 0.2 percent.
Futures on the Standard & Poor’s 500 Index lost 0.1 percent. The gauge increased less than 0.1 percent yesterday as better- than-estimated data on consumer confidence and home prices offset concern government deficits will derail the economic recovery.
A gauge of raw-material producers on the MSCI Asia Pacific Index lost 0.6 percent, paring its five-day advance to 2.3 percent. That’s the most in that period of the MSCI Asia Pacific’s 10 industry groups.
In Sydney, BHP Billiton, the world’s biggest mining company, dropped 0.8 percent to A$44.05. Newcrest Mining Ltd., Australia’s largest gold producer, dropped 0.9 percent to A$32.93. Sumitomo Metal Mining Co. slipped 0.5 percent to 1,389 yen in Tokyo.
Samsung Electronics, which gets 22 percent of sales in the Americas, rose 2 percent to 830,000 won in Seoul after the Korea Economic Daily’s report, which cited a company official it didn’t name. James Chung, a spokesman for Samsung, declined to comment.
Canon, the world’s biggest camera maker, rose 0.9 percent to 4,365 yen. Mazda Motor Corp., which gets 30 percent of sales in North America, climbed 4 percent to 261 yen. Fanuc Ltd., a maker of industrial robots that more than 70 percent of its revenue outside Japan, gained 0.6 percent to 10,070 yen.
The yen depreciated to as low as 93.34 against the dollar today, compared with 92.41 at the close of stock trading in Tokyo yesterday. A weaker yen boosts the value of overseas income for Japanese companies when converted into their home currency.
The MSCI Asia Pacific Index has gained 4.3 percent this year, compared with increases of 5.2 percent for the S&P 500 and 3.9 percent for the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 19.1 times estimated earnings, compared with 15 times for the S&P 500 and 13.2 times for the Stoxx 600.
Australian Retail Sales
Yakult Honsha Co., a Japanese softdrink maker, dropped 3.6 percent to 2,523 yen, the biggest decline on MSCI’s Asian gauge. JPMorgan Chase & Co. downgraded the stock to “underweight” from “neutral.”
In Sydney, Harvey Norman Holdings Ltd., Australia’s biggest furniture and electronics retailer, slid 0.8 percent to A$3.63.
The nation’s retail sales dropped 1.4 percent from January, when they rose a revised 1.1 percent, the Bureau of Statistics said today. The median forecast of economists surveyed by Bloomberg News was for a 0.3 percent increase.