Most Asian stocks fell as declines among exporters following an increase in US jobless claims overshadowed gains by real-estate companies.
Hyundai, which counts North America as its biggest overseas market, and Fanuc, the Japanese industrial robot maker that gets 18 per cent of its revenue from North America, declined at least 1.1 per cent. Cheung Kong (Holdings), Hong Kong's second-biggest developer by value, and its Hutchison Whampoa affiliate gained at least 2.1 per cent in Hong Kong on better-than-estimated profit.
About nine stocks declined for every seven that rose in the MSCI Asia Pacific Index, which was little changed at 121.50 in Tokyo. The measure has gained 2.1 per cent this week. The gauge has lost 5.9 per cent from its high this year on April 15 on concern Europe's debt crisis and China's steps to curb property prices will slow global economic growth.
“Earnings have been strong but there's a question of sustainability,” said Lee King Fuei, Singapore-based fund manager at Schroders. “Going forward, earnings growth is going to be much more difficult as the economic environment becomes sluggish.”
Japan's Nikkei 225 Stock Average sank 0.3 per cent amid concern the yen's appreciation to near an eight-month high against the dollar will hurt the value of the country's exports.
South Korea's Kospi Index declined 0.2 per cent, while Australia's S&P/ASX 200 Index lost 0.3 per cent. China's Shanghai Composite Index dropped 0.3 per cent and Hong Kong's Hang Seng Index sank 0.1 per cent.
'Anemic recovery'
Futures on the Standard & Poor's 500 Index were also little changed. The index fell 0.1 per cent yesterday after government data showed initial jobless claims rose by the most since April. The US economy faces an “anemic recovery” and the government will need to enact more stimulus measures, Nobel Prize-winning economist Joseph E. Stiglitz said in an interview yesterday.
Hyundai, South Korea's biggest automaker, dropped 3.4 per cent to 141,500 won. Taiwan Semiconductor Manufacturing, the world's largest maker of customised chips, lost 1.4 per cent to NT$61. Fanuc declined 1.1 per cent to 10,270 yen in Tokyo.
Japanese exporters also dropped after a stronger yen threatened to diminish the value of overseas sales when converted to the local currency. The yen strengthened to 85.74 per dollar 85.82 in New York yesterday. It climbed to 85.33 per dollar on August 4, the strongest since November 27.
Mitsumi Electric, which supplies parts to Nintendo, slumped 7 per cent to 1308 yen, the second-biggest decline on the MSCI Asia Pacific Index. The company cut its full-year profit forecast by 89 per cent, citing lower-than-expected demand for “amusement-related” products.
Li Ka-shing
Olympus slumped 2 per cent to 2284 yen after the optical-equipment maker reported first-quarter net income fell 17 per cent. Terumo, a Japanese maker of medical devices, decreased 3.6 per cent to 4570 yen after reporting a 19 per cent decline in first-quarter net income.
“The global economy remains vulnerable to a number of uncertainties and destabilising forces,” Hong Kong billionaire Li Ka-shing said yesterday. “Nevertheless, the overall outlook for the global economy is likely to remain generally stable.”
Li made the comments after Cheung Kong and Hutchison, his two biggest companies, reported better-than-estimated earnings.
Hutchison, which reported a 12 per cent increase in first-half net income, jumped 5.8 per cent to HK$56.10. Cheung Kong gained 2.1 per cent to HK$98.60. The company's first-half profit rose 4 per cent. Li said he's “very optimistic” about his companies' prospects and has been buying shares in them.
Beating estimates
Forty per cent of the MSCI Asia Pacific Index's companies that reported profit since July 12 have beaten analysts' estimates, while 25 per cent have missed. Stock gains have driven the average value of companies in the gauge to 14.3 times estimated earnings, near the highest level in about five weeks.
In Tokyo, real-estate companies advanced for a second day after a private report yesterday showed a decline in Tokyo's office vacancies. Mitsubishi Estate, Japan's biggest developer by market value, gained 3.4 per cent to 1320 yen. Mitsui Fudosan, the No. 2, rose 3.8 per cent to 1391 yen.
NTT DoCoMo, Japan's largest mobile-phone operator, advanced 1.8 per cent to 139,500 yen after the Nikkei newspaper said Japan Communications will soon start a service that allows Apple's iPhone 4 to be used on the DoCoMo network.