Asian Stocks Drop on Concern U.S. Economic Recovery is Waning

Asian stocks declined, dragging a regional benchmark index lower for a third day, as lower-than- forecast growth in U.S. service industries and jobs sparked concern the recovery in the world’s biggest economy is faltering.

James Hardie Industries SE (JHX), the largest seller of home siding in the U.S., dropped 1.9 percent. News Corp. (NWSA), the owner of Fox Broadcasting and the Twentieth Century Fox film studio, sank 3.4 percent after posting lower earnings. Hang Lung Properties Ltd. (101) led declines among Hong Kong developers as home sales in the city fell to the least in two years in April. San Miguel Corp. (SMC), the Philippines’ No. 1 food and beverage maker, plunged 31 percent after selling $1 billion of shares and bonds.

“The U.S. economic data looks to have lost significant momentum in the most recent month, and this is weighing on markets,” said Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State Global Asset Management, which oversees about $150 billion. “Lower commodity prices overnight could also weigh on some sectors.”

The MSCI Asia Pacific excluding Japan Index dropped 0.3 percent to 494.17 as of 11:42 a.m. in Hong Kong, with four stocks falling for every three that advanced. The measure lost 0.3 percent last week as companies from Acer Inc. to LG Electronics Inc. posted earnings that missed estimates, sparking concern global growth may not be sustained even as the U.S. Federal Reserve renewed its pledge to stimulate the world’s biggest economy by keeping interest rates low.

Hong Kong’s Hang Seng Index (HSI) fell 0.1 percent, set for its longest streak of losses since September 2008. China’s Shanghai Composite Index slipped 0.2 percent. Markets in Japan, South Korea and Thailand were closed for a public holiday.
Australia Retail Sales

Australia’s S&P/ASX 200 Index was little changed after the nation’s retail sales unexpectedly fell in March as consumers spent less at department stores and supermarkets. Singapore’s Straits Times Index gained 0.1 percent. Taiwan’s Taiex Index climbed 0.5 percent.

Futures on the Standard & Poor’s 500 Index rose 0.3 percent today. U.S. stocks dropped in New York yesterday for a third day as the nation’s services industries expanded in April at the slowest pace in eight months, missing economist estimates, and companies added fewer-than-forecast jobs. The S&P 500 and the Dow Jones Industrial Average both declined 0.7 percent.

The Institute for Supply Management’s index of non- manufacturing companies declined to 52.8 last month, lower than the median forecast of economists surveyed by Bloomberg News, from 57.3 in March, a report showed yesterday. Readings greater than 50 signal growth. Another report showed the pace of hiring cooled in April.

U.S. Jobs

Employment increased by 179,000 in April from a revised 207,000 the prior month, according to figures from ADP Employer Services. The median estimate in the Bloomberg News survey called for a 198,000 advance this month.

Foxconn International Holdings Ltd. (2038), the world’s No. 1 contract manufacturer of mobile phones, dipped 1.6 percent to HK$4.32 in Hong Kong. James Hardie, which gets about 72 percent of sales from the U.S., declined 1.9 percent to A$5.67. Billabong International Ltd. (BBG), the world’s largest surf-wear maker, fell 1.8 percent to A$6.60.

News Corp.’s Class B shares sank 3.4 percent to A$16.70 in Sydney after saying third-quarter net income declined 24 percent from a year ago to $639 million on falling movie revenue.

Property developers in Hong Kong retreated after a government report showed home sales in April declined 37.6 percent from a year earlier to 7,635. That’s the lowest since March 2009, according to data compiled by Bloomberg. The value of transactions slid 26.8 percent from a year earlier to HK$39 billion ($5 billion), the biggest yearly drop since June 2010, the report showed.
Hong Kong Developers

Hang Lung, Hong Kong’s third-biggest developer by market value, fell 2.6 percent to HK$33.15. Cheung Kong Holdings Ltd. (1), controlled by billionaire Li Ka-shing, dropped 0.8 percent to HK$118.70. Sun Hung Kai Properties Ltd. (16), the world’s largest developer by market value, lost 0.2 percent to HK$120.10.

San Miguel tumbled 31 percent to 106 pesos, the worst performance since 1990. The company said it and controlling shareholder Top Frontier Investment Holdings Inc. sold shares at a discounted price of 110 pesos each. The sale of shares and convertible bonds raised $1 billion, it said.

The MSCI Asia Pacific excluding Japan Index climbed 3.5 percent this year through yesterday, compared with gains of 7.1 percent by the S&P 500 and 1 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark index are valued at 12.9 times estimated earnings on average as of the last close, compared with 13.6 times for the S&P 500 and 11.3 times for the Stoxx 600.