Asian Mining, Bank Stocks Drop as Japan Equities Rally

By Adam Haigh

Asian raw-materials stocks and Australian banks declined, dragging the benchmark lower for a third day, offsetting a gain in Japanese shares as the nation’s central bank began a two-day policy meeting.

Commonwealth Bank of Australia fell 1 percent as a private report showed new home sales in the country retreated. BHP Billiton Ltd., the world’s biggest miner, lost 1.5 percent as metal prices fell. Honda Motor Co. (7267), a carmaker that gets 44 percent of its revenue in North America, gained 2.8 percent as rising demand for motor vehicles boosted U.S. factory orders. The MSCI Asia Pacific Index (MXAP) declined less than 0.1 percent to 133.75 as of 12:22 p.m in Tokyo, reversing an earlier advance of as much as 0.3 percent. The measure has climbed for the past five months as Japanese shares gained on speculation the nation will deploy more stimulus and amid signs the U.S. economy is recovering.

“You still have ongoing support from the Federal Reserve and the Bank of Japan (8301),” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has $126 billion under management. “It’s probably more of a buying opportunity for equities and I’d caution about getting too bearish.”

Japan’s Nikkei 225 Stock Average advanced 1.7 percent as the first policy meeting began under the leadership of Haruhiko Kuroda as governor. Kuroda, who said yesterday that bold action is necessary to meet expectations, has indicated that expanded purchases of government bonds will be the main tool for monetary easing.

Regional Gauges

Australia’s S&P/ASX 200 Index (AS51) slid 0.8 percent and South Korea’s Kospi Index dropped 0.6 percent. New Zealand’s NZX 50 Index was little changed and Singapore’s Straits Times Index added 0.1 percent. China’s Shanghai Composite rose 0.1 percent and Hong Kong’s Hang Seng Index was little changed.

Private home sales in Australia declined 5.3 percent from the previous month, Housing Industry Association data showed. Data last month showed mortgage demand is growing at close to the slowest pace since records began in 1977.Commonwealth Bank (CBA) slid 1.1 percent to A$68.20. Australia & New Zealand Banking Group lost 1.3 percent to A$28.44.

Japanese exporters rose as orders placed with U.S. factories rose the most in five months in February, boosted by a pickup in demand for motor vehicles and commercial aircraft, a Commerce Department report showed yesterday. Honda climbed 2.8 percent to 3,465 yen. Toyota Motor advanced 1.8 percent to 4,700.

The MSCI Asia Pacific Index, the benchmark regional equities gauge, yesterday traded at 13.3 times average estimated earnings compared with 14.2 for the Standard & Poor’s 500 Index and 12.7 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

U.S. Futures

Futures on the Standard & Poor’s 500 Index (SPX) were little changed. The measure climbed 0.5 percent yesterday after the Commerce Department report showed a 3 percent gain in factory orders and Italian and Spanish bond yields declined.

The London Metal Exchange Index of industrial metals retreated yesterday 1.3 percent, the most in two weeks. BHP Billiton retreated 1.5 percent to A$32.23 and Rio Tinto Group sank 2.3 percent to A$55.225.

Fast Retailing Co. surged 11 percent to 34,650 yen as sales at Uniqlo Japan outlets of Asia’s largest apparel retailer soared 23 percent.

To contact the reporter on this story: Adam Haigh in Sydney atahaigh1@bloomberg.net

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