Asian Stocks Fall for Third Week on Europe Crisis, China Property Concerns

By Jonathan Burgos - Nov 19, 2011 4:17 AM GMT+0530

Tweet
inShare4
More
Print
Email

Pimco's Bhansali on European Debt Crisis

Play Video

Nov. 18 (Bloomberg) -- Vineer Bhansali, a portfolio manager at Pacific Investment Management Co., talks about the European sovereign debt crisis and investment strategy. He speaks with Tom Keene on Bloomberg Television's "Surveillance Midday." (Source: Bloomberg)

Asian stocks declined for a third- straight week, with the regional benchmark index within a percent of erasing October’s gains, amid concern about China’s property sector and evidence that Europe’s debt crisis is infecting major economies.

HSBC Holdings Plc (HSBA) and Commonwealth Bank of Australia led declines among lenders amid concern about contagion in Europe as Spain holds a general election this weekend. China Overseas Land & Investment Ltd. (688), the biggest mainland developer listed in Hong Kong, slid 6.9 percent after home prices in 33 Chinese cities dropped and the country’s banking regulator said loans to developers may sour. BHP Billiton Ltd. (BHP), the world’s biggest mining company, fell 4.4 percent as copper futures dropped for a third week.

“There will be pressure on European banks as the crisis drags on and that might have some global impact,” said Yoji Takeda, who manages about $1.1 billion at RBC Investment Management (Asia) Ltd. in Hong Kong. “China is trying to fine- tune its monetary policy to orchestrate a soft-landing, but at the same time they want to see lower property prices.”

The MSCI Asia Pacific Index dropped 2.7 percent to 114.20 this week, extending a three-week decline to 8.4 percent, as bond yields in Italy and Spain surged near the 7 percent threshold that led Greece, Ireland and Portugal to seek bailouts.

Hong Kong’s Hang Seng Index declined 3.4 percent this week, while China’s Shanghai Composite Index fell 2.6 percent. Japan’s Nikkei 225 (NKY) Stock Average fell 1.6 percent. Australia’s S&P/ASX 200 dropped 2.8 percent.

India’s Sensitive Index slumped 2.1 percent, the most among the Asia-Pacific indexes, as the rupee dropped against the dollar for a third week as Europe’s worsening debt crisis prompted investors to favor safer assets such as the dollar.

U.S. Debt

Stocks declined this week as Fitch Ratings said the creditworthiness of U.S. banks will deteriorate if Europe’s debt crisis spreads beyond the Europe’s five most-troubled nations. In the U.S., Republicans and Democrats on a congressional committee are struggling to find a compromise before a Nov. 23 deadline to produce a U.S. deficit-cutting plan.

HSBC, Europe’s largest bank, fell 4 percent to HK$59.25 in Hong Kong. Commonwealth Bank, Australia’s No. 1 lender, retreated 3.8 percent to A$47.73 in Sydney and was the biggest drag on a measure of financial companies in the Asia-Pacific index. Standard Chartered Plc (STAN), a London-based bank that makes most of its revenue in emerging markets, declined 7.5 percent to HK$159.40.
Political Turmoil

The sovereign-debt crisis has stirred political turmoil across Europe, with Italy and Greece replacing their leaders this month. Spain may speed up the timetable for forming a new government after the election on Nov. 20 so the first Cabinet meeting can be held on Dec. 23, ABC reported, citing officials in the People’s Party it didn’t name.

Exporters to Europe also dropped after the Bank of England said on Nov. 16 Britain’s economy faces a “markedly weaker” outlook and Spain cut its economic forecast.

Esprit Holdings Ltd., the clothier that counts Europe as its biggest market, tumbled 8.5 percent to HK$9.10 in Hong Kong. Canon Inc. (7751), the camera maker that gets about 32 percent of sales from Europe, dropped 2.5 percent to 3,350 yen in Tokyo. Mazda Motor Corp. (7261), the Japanese carmaker most dependent on Europe, declined 2.8 percent to 137 yen.
‘High Risk’

Chinese property developers and lenders fell as a government report showed home prices fell in 33 of 70 cities monitored by the government in October. The China Banking Regulatory Commission told lenders last week to step up debt restructuring for struggling local government financing vehicles and cut “high-risk” loans to developers, a person with knowledge of the matter said.

China Overseas Land sank 6.9 percent to HK$12.38. China Resources Land Ltd. (1109), a state-owned developer, slumped 5.3 percent to HK$10.70. Industrial & Commercial Bank of China (1398) Ltd., the nation’s biggest lender, dropped 8.3 percent to HK$4.44.

Gauges of raw material and energy producers led declines among the 10 industry groups in the MSCI Asia Pacific as copper futures decreased for a second week and a six-week rally in crude oil fizzled out.

BHP Billiton fell 4.4 percent to A$36.13 in Sydney. Rio Tinto Group, the world’s second-biggest mining company by sales, slid 3.4 percent to A$67.05. Cnooc Ltd. (883), China’s largest offshore oil producer, dropped 3.8 percent to HK$14.82 in Hong Kong.
Olympus Rebounds

Among stocks that advanced, Olympus Corp. (7733) jumped 36 percent to 625 yen in Tokyo on speculation the optical-equipment maker that admitted to hiding losses tied to acquisitions for decades may avoid delisting. The gain pared to 75 percent its decline in the five weeks after its ousted President Michael C. Woodford called for an investigation into the company’s past acquisitions.

“Not many people will dare to buy the shares with the risk of delisting, but some investors in short positions were buying back the shares,” said Kiyoshi Ishigane, a senior strategist in Tokyo at Mitsubishi UFJ Asset Management Co., which oversees the equivalent of $84 billion. “Some people who believe the company won’t be delisted are buying the shares.”

To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.
Want to save this for later? Add it to your Queue!

Tweet
inShare4
More
Print
Email

Sponsored links
Videos You May Like
Asian Stocks, H.K. Economy, Europe Debt Crisis
China's Economy, Europe Sovereign Debt Crisis
Europe Debt Crisis, Stocks, Investment Strategy
by Taboola
Related News

Asia ·
Australia & New Zealand ·
China ·
India & Pakistan ·
Stocks

Sponsored Links
Subscribe Now & Get Your Free Issue of Bloomberg Markets Magazine
More Stories

Manchester City Hand Newcastle First Premier League Loss 3-1; Arsenal Win
Winters Leads Harvard to 45-7 Win Over Rival Yale in Ivy League
German Bundesliga Game Postponed After Referee Doesn’t Show Up
Arnault, Colony Said to Be Considering Replacing Carrefour Chief Olofsson

[Rate These Stories] Rate These StoriesMore News »
Advertisement
Most Popular Stories

Iran’s Nuclear Drive May End Arming Terrorists, Barak Says
Q

Obama Puts U.S. Approach to China on New Path
Q

Democrats Disagree With Republicans on Taxes to Cut Deficit
Q

‘Doubtful’ Supercommittee Will Agree, Kyl Says
Q


More Most Popular Stories »
Sponsored Links
Advertisement
Job Search
Post a Job »

Sales Executive jobs
Software Engineer jobs
Project Manager jobs
Portfolio Manager jobs
Financial Advisor jobs
Accountant jobs
Director of Communications jobs
Attorney jobs
Business Development Manager jobs
Account Manager jobs
Controller jobs

Search All Jobs jobs by Indeed job search
Advertisements
Click here to find out more!
Bloomberg

Bloomberg on
Facebook
Follow Bloomberg
on Twitter
Follow Bloomberg
on LinkedIn

More from Bloomberg

Bloomberg Businessweek
Business Exchange
Bloomberg Briefs
Bloomberg Government
Bloomberg HT
Bloomberg Institute
ブルームバーグ(日本語)
Bloomberg Law

Bloomberg Link
Bloomberg Markets Magazine
Bloomberg Mart
Bloomberg New Energy Finance
Bloomberg Open Symbology
Bloomberg Press
Bloomberg Sports
Jobs by Indeed

Company

About Bloomberg
Careers
Press Room
Advertising
Contact Us
关于彭博中国
会社概要(日本語)

Help
Sitemap
Trademarks
Feedback
Terms of Service
Privacy Policy

[Rate this Page] Rate this Page
©2011 BLOOMBERG L.P. ALL RIGHTS RESERVED. Made in NYC