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Most Asia Stocks Drop as Nikkei 225 Little Changed on Yen

Published: January 17, 2013 | 7:16 am
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Most Asian shares declined, with the regional benchmark index paring a second day drop, after touching a 17-month high this week. Japan’s Nikkei 225 Stock Average (NKY) closed little changed after at one point being headed for its biggest two-day retreat since September 2011 as the yen fluctuated.

GS Yuasa Corp. (6674), a supplier of batteries to Boeing Co. 787 aircraft, slumped 5 percent in Tokyo after the Federal Aviation Administration ordered airlines to prove the batteries are safe. Evergrande Real Estate Group Ltd., China’s biggest developer by sales volume, sank 6.5 percent in Hong Kong after announcing a share sale. Fortescue Metals Group Ltd., Australia’s third- largest producer of iron ore, slid 4.2 percent in Sydney after the metal’s price fell.

The MSCI Asia Pacific Index (MXAP) was little changed at 131.5 as of 3:15 p.m. Tokyo time after rising 0.6 percent and falling 0.6 percent. The gauge rallied 9.8 percent from Nov. 14 through yesterday as Japanese shares surged on speculation Prime Minister Shinzo Abe will pursue more aggressive stimulus policies and reports showed recovery in the U.S. and China.

“We’re seeing some profit-taking following recent gains,” said Yoji Takeda, who oversees about $1.2 billion as Hong Kong- based head of Asian equities at RBC Investment Management (Asia) Ltd. “This profit-taking is temporary. Valuations have gotten a little bit higher but not yet expensive. The macroeconomic backdraft is still supportive of equities.”

The Nikkei 225 rose 0.1 percent, erasing a decline of as much as 1.6 percent in the final minute of trading in Tokyo. The gauge had been heading for a two-day retreat of as much as 4.1 percent, the most since September 2011.

The yen fell 0.3 percent to 88.6 per dollar as of 3:20 p.m. in Tokyo, after reversing earlier gains of as much as 0.3 percent. A stronger yen reduces the overseas earnings by Japanese exporters when repatriated.

BOJ Meeting
The Nikkei 225 advanced 22 percent through yesterday from Nov. 14, when the announcement of elections fanned speculation a new government would pressure the Bank of Japan for more stimulus.

China’s Shanghai Composite Index (SHCOMP) declined 0.9 percent, while Hong Kong’s Hang Seng Index lost 0.2 percent. South Korea’s Kospi Index slid 0.2 percent and Australia’s S&P/ASX 200 Index added 0.4 percent.

Shares on the MSCI Asia Pacific Index traded at 14.1 times estimated earnings, compared with 13.3 for the Standard & Poor’s 500 Index and 12 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg News.

Futures on the S&P 500 added 0.1 percent today. Most U.S. stocks fell yesterday as a cut in the World Bank’s growth growth forecast offset a rally in Apple Inc. shares.

businessweek

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