Asian Stocks Drop After Two-Day Gain; Nikkei 225 Rises

By Jonathan Burgos & Anna Kitanaka 

Asian stocks dropped, with the regional benchmark index snapping two days of gains, led by Samsung Electronics Co. and Australian banks. The Nikkei 225 Stock Average rose for a sixth day, with exporters gaining as the yen traded near a three-week low.

Samsung, which yesterday announced it will invest 10.4 billion yen ($111 million) in troubled Japanese electronics maker Sharp Corp., fell 2.2 percent in Seoul. Sharp tumbled 7.3 percent.Australia & New Zealand Banking Group Ltd., Australia’s No. 3 lender by market value, slid 1.7 percent after announcing plans to cut jobs and as the nation reported a bigger-than- expected trade deficit. Honda Motor Co. (7267), which gets 44 percent of sales from North America, gained 1.1 percent in Tokyo. The MSCI Asia Pacific Index slipped 0.3 percent to 135.46 as of 12:37 a.m. in Tokyo, erasing a gain of less than 0.1 percent. The regional gauge is denominated in U.S. dollars so declines today by the yen reduced the value of companies in the measure. About the same number of shares rose and and fell on the index. The benchmark last week capped a four-month advance, the longest such winning streak since September 2009, as central banks around the world maintained loose monetary policies to support economic growth.

“The market is certainly not as cheap, but we don’t think it’s overpriced,” said Angus Gluskie, managing director at Sydney-based White Funds Management, which oversees more than $350 million. “Most investors believe the growth upside outweighs the risks.”

Shares on the MSCI Asia-Pacific Index traded at 14.9 times estimated earnings compared with 13.9 for the Standard & Poor’s 500 Index and 12.6 for the Stoxx Europe 600, according to data compiled by Bloomberg.

Australian Trade

Australia’s S&P/ASX 200 Index slipped 0.4 percent. The nation’s trade deficit was twice as wide as economists forecast in January as floods in the northeastern state of Queensland disrupted coal exports and telecommunications equipment imports surged.

South Korea’s Kospi Index declined 1 percent. Hong Kong’s Hang Seng Index climbed less than 0.1 percent after falling as much as 0.5 percent and China’s Shanghai Composite Index was little changed. Taiwan’s Taiex Index added 0.1 percent.

Japan’s Nikkei 225 Stock Average (NKY) rose 0.4 percent, poised to close at the highest level since September 25 2008. The yen traded near a three-week low. A weaker yen boosts the value of overseas earnings at Japanese exporters when repatriated.

U.S. Jobs

Futures on the Standard & Poor’s 500 Index was little changed today. The S&P 500 gained 0.1 percent yesterday and the Dow Jones Industrial Average extended its record high after a report by the ADP Research Institute showed companies added more workers than projected in February.

A Labor Department report due tomorrow may show private payrolls rose by 170,000 last month, according to the median estimate in a Bloomberg survey of economists. Orders to U.S. factories fell in January, weighed down by a slump in demand for military hardware and commercial aircraft, the Commerce Department reported yesterday.

Samsung slid 2.2 percent to 1,526,000 won, posting the biggest drag on the MSCI Asia Pacific Index. (MXAP) The South Korean company will acquire 3 percent of unprofitable Sharp for 10.4 billion yen to secure liquid-crystal displays for smartphones and televisions.

Sharp Drops

Sharp also fell, losing 7.3 percent to 316 yen, its biggest decline since Dec. 25 and paring yesterday’s 14 percent jump. Sharp may suffer from the deal as Samsung may demand priority supply with preferential prices, according to a report by analyst Yasuo Nakane at Deutsche Bank AG.

Australia & New Zealand Banking Group declined 1.7 percent to A$28.73. Australia’s third-largest bank by market value fell after the Bureau of Statistics said the country’s trade deficit was twice as wide as economists forecast in January.

The lender also announced plans to cut about 50 jobs in institutional and international banking as lenders trim costs amid weak credit demand. The stock was the third-biggest drag on the MSCI Asia Pacific Index.

Japanese shares rose, with carmakers exerting the biggest boost to the nation’s Topix Index, as the yen fell to 94.12 per dollar today, boosting the outlook for exporters. The Bank of Japanconcluded a two-day policy meeting today, keeping the asset-purchase fund unchanged at 76 trillion yen.

To contact the reporters on this story: Jonathan Burgos in Singapore atjburgos4@bloomberg.net; Anna Kitanaka in Tokyo at akitanaka@bloomberg.net

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