Asian Stocks Fall as Valuations Climb; Commonwealth Declines

March 20 (Bloomberg) -- Asian stocks fell after the benchmark index’s biggest weekly rally since August 2007 drove valuations to the highest in more than a year.

Commonwealth Bank of Australia fell 3.4 percent, leading the first decline among financial companies in six days, amid skepticism U.S. and Japanese plans to purchase bonds will ease the financial crisis. China Mobile Ltd. dropped 3.9 percent in Hong Kong on speculation an investor was seeking to sell shares in the company. Alibaba.com Ltd., operator of China’s biggest trading Web site, lost 8.5 percent after profit missed analyst estimates. Japan’s stock market is closed for a holiday.

“We are not outright bullish on equities,” said Diane Lin, a Sydney-based fund manager at Pengana Capital, which oversees about $1.9 billion. “We’re seeing profit-taking on financial stocks. We need to see the credit market functioning normally before any rally can be sustained.”

The MSCI Asia Pacific excluding Japan Index dropped 0.5 percent to 234.90 as of 11:24 a.m. in Hong Kong, cutting its advance this week to 5.7 percent. The gauge that includes Japan has climbed 7.7 percent in the past five days, the most since August 2007, as banks including Barclays Plc and Standard Chartered Plc reported “strong” starts to the year.

Hong Kong’s Hang Seng Index fell 1.1 percent to 12,988.30, while Taiwan’s Taiex Index lost 1 percent. Most markets declined except South Korea, Indonesia, Thailand and the Philippines.

Nuplex Industries Ltd., which makes resins for paints and building products, plunged 53 percent in Wellington on a rights offer to bolster its balance sheet. BHP Billiton Ltd., the world’s largest mining company, rose 4.3 percent in Sydney, as commodity prices rallied.

Finance Stocks

Futures on the Standard & Poor’s 500 Index fell 0.7 percent. The gauge dropped 1.3 percent yesterday, led by financial shares, halting the S&P 500’s rebound from a 12-year low reached on March 9. The measure gained 16 percent in that time.

Commonwealth Bank of Australia fell 3.4 percent to A$32.86 in Sydney. Macquarie Group Ltd., Australia’s largest investment bank, dropped 3.8 percent to A$23.67. Hang Seng Bank Ltd., controlled by London-based HSBC Holdings Plc, slumped 2.6 percent to HK$76.50 in Hong Kong.

A gauge of finance stocks on the MSCI Asia Pacific excluding Japan Index fell 2.2 percent, snapping a five-day, 15 percent rally. The comments this week from Barclays and Standard Chartered added to similar statements from Citigroup Inc. and Bank of America Corp., which fueled speculation the worst of the financial crisis is over.

‘False Dawn’

Gains in the week have driven the average valuation of companies on the MSCI Asia Pacific Index to 15 times reported profit, the highest since January 2008, data compiled by Bloomberg show.

The rally is a “false dawn,” said Martin Marnick, head of trading at Helmsman Global Trading Ltd. in Hong Kong. He predicts stocks will fall in coming days.

China Mobile, the world’s largest cell-phone operator by users, slumped 3.9 percent to HK$64.10. An investor failed to sell about HK$4 billion ($516 million) of the company’s shares yesterday, Ming Pao Daily News reported, citing brokers it didn’t identify.

Alibaba fell 7.3 percent to HK$7.60 in Hong Kong. The company reported full-year net income of 1.2 billion yuan ($175.8 million), compared with the 1.26 billion yuan median in a Bloomberg survey of nine analysts.

In Wellington, Nuplex plummeted 50 percent to 53 New Zealand cents. The company plans to raise NZ$132.8 million ($74 million) through a seven-for-one rights offer at 23 cents each.

Commodity Prices

BHP gained 4.3 percent to A$32.60 as a measure of six metals in London jumped 5.6 percent yesterday, while gold futures in New York climbed the most since September.

Rio Tinto Group, the world’s third-largest mining company, added 3.4 percent to A$47.04. Posco, Asia’s third-largest steelmaker, gained 2.6 percent to 356,500 won. Newcrest Mining Ltd., Australia’s biggest gold producer, climbed 3.1 percent to A$34.11.

Santos Ltd., the nation’s third-largest oil and gas producer, jumped 3.3 percent to A$15.85 as crude oil futures surged 7.2 percent yesterday to $51.61 a barrel, the highest settlement since Nov. 28. Cnooc Ltd., China’s largest offshore oil producer, added 1.9 percent to HK$7.58.

“Investors are switching out from banks and into the resources stocks because they’re waiting for signs of improvement in the credit markets,” said Rob Patterson, who manages about $2 billion at Argo Investments Ltd. in Adelaide, Australia.