Asian stocks fell, dragging the MSCI Asia Pacific Index to its second straight weekly decline, as Sharp cut its profit forecast and Samsung said memory-chip and display-panel prices will drop.
Sharp, Japan's largest maker of liquid-crystal displays, tumbled 5.6 per cent in Tokyo as a stronger yen hurt the outlook for export earnings. Advantest, the world's No. 1 maker of memory-chip testers, slumped 7.3 per cent as Nomura Holdings cut its rating. Samsung, which reported record third-quarter profit today, dropped 1.6 per cent in Seoul as it said it anticipates "severe" competition.
The MSCI Asia Pacific Index fell 0.7 per cent to 128.64 in Tokyo, extending this week's decline to 1 per cent.
The gauge has climbed 1.8 per cent in October, set for its second month of gains since Federal Reserve Chairman Ben Bernanke said on Aug. 27 more securities purchases may be warranted if growth slows. Fed policy makers meet on Nov. 2-3.
“Much of the positive news from potential further quantitative easing in the US has been priced in,” said Pauline Dan, Hong Kong-based chief investment officer at Samsung Invest Trust, which oversees about $US72.1 billion in assets. “Earnings momentum for electronics companies will no doubt be slower. It's logical for people to expect slower growth into 2011.”
Japan's Nikkei 225 Stock Average decreased 1.7 per cent as government reports showed the country's industrial production fell for a fourth month in September, adding to concern an export-led recovery is losing momentum.
Hong Kong's Hang Seng Index sank 1.3 per cent, while China's Shanghai Composite Index declined 1 per cent. South Korea's Kospi Index dropped 1.4 per cent. Australia's S&P/ASX 200 Index fell 0.5 per cent.
Tech slump
Futures on the Standard & Poor's 500 Index slipped 0.5 per cent. While the index rose 0.1 per cent yesterday in New York, most stocks fell as 3M Co. drove industrial shares lower after cutting its profit forecast.
Technology companies accounted for 16 per cent of the MSCI Asia Pacific Index's decline. Japanese exporters fell as the yen rose as high as 80.87 against the dollar, compared with 81.63 at the close of stock trading in Tokyo yesterday. A stronger yen reduces overseas income when repatriated.
Sharp slumped 5.6 per cent to 797 yen. The company cut its profit forecast for the year ending March 2011 by 40 per cent to 30 billion yen ($US367 million), citing the stronger yen and falling prices of panels.
Nintendo profit
Advantest tumbled 7.3 per cent to 1561 yen after reporting first-half profit that missed its own estimate. Nomura lowered its rating to “reduce” from “neutral.”
Nintendo, the world's largest maker of video-game players, fell 2.8 per cent to 20,700 yen after the company posted a 15 per cent drop in second-quarter earnings and forecast its smallest profit in six years.
“There are uncertainties about the outlook for earnings in the second half,” said Juichi Wako, a senior strategist at Tokyo-based Nomura.
Today is the peak day for earnings reports in Japan, with about 270 of the 1664 companies in the Topix scheduled to report results, according to data compiled by Bloomberg. About three companies have exceeded profit estimates for every two that fell short, based on data compiled by Bloomberg from the 322 companies in the Topix that have reported quarterly results since Oct. 7 through yesterday.
Japanese stocks fell as the Trade Ministry reported factory output decreased 1.9 per cent in September from the previous month, when it dropped 0.5 per cent. The median estimate of 27 economists surveyed by Bloomberg News was for a 0.6 per cent decline.
In Seoul, Samsung slipped 1.8 per cent to 750,000 won even as the company reported third-quarter profit increased 17 per cent to a record 4.46 trillion won ($US4 billion).
"The chip unit has been driving earnings in the third quarter, but it won't likely support profit as much in the fourth quarter, as the drop in chip prices is accelerating," said Seo Won Seok, an analyst at NH Investment & Securities. "For TV sets, marketing costs are the most important factor in the fourth quarter, and they've been always high then."