Asian Stocks Fall After U.S. Payroll Growth Slows

By Adam Haigh 

Asian stocks fell for a second day after weaker growth in U.S. payrolls and manufacturing added to evidence of a slowdown in the world’s largest economy and as the yen rose, curbing the earnings outlook for Japanese exporters.

BHP Billiton Ltd. (BHP), the world’s largest mining company, lost 1 percent, leading raw-materials shares lower as metals prices declined. Toyota Motor Corp., the world’s biggest carmaker, slid 1.4 percent. Takeda Pharmaceutical Co. gained 2.3 percent in Tokyo after a judge threw out a $6.5 million damages verdict over its Actos diabetes drug. The MSCI Asia Pacific Index fell 0.3 percent to 140.94 as of 12:15 p.m. in Tokyo, with five stocks falling for every three that rose. Seven of the 10 industry groups on the gauge retreated. Markets in China reopened after a holiday.

“We all know that things are getting a little bit slower,” said Sydney-based Kumar Palghat, a money manager and founder of Kapstream Capital, which oversees at least $5.2 billion. “It’s way too early for the Fed to even contemplate removing stimulus.”

Japan’s Nikkei 225 Stock Average retreated 0.5 percent and the broader Topix Index lost 0.3 percent. Australia’s S&P/ASX 200 Index sank 0.7 percent, extending losses as a government report showed building permits unexpectedly dropped in March. New Zealand’s NSX 50 Index fell 0.7 percent. South Korea’s Kospi index slipped 0.3 percent and Taiwan’s Taiex Index rose 0.3 percent.

Chinese Manufacturing

Hong Kong’s Hang Seng retreated 0.3 percent and China’s Shanghai Composite lost 0.1 percent as a private gauge of Chinese manufacturing declined last month, adding to signs that growth in the world’s second-biggest economy will cool for a second straight quarter.

The regional MSCI Asia Pacific gauge climbed 9.3 percent this year through yesterday amid optimism Japan will deploy more measures to beat deflation and that policy makers in the U.S. and China remain on standby to buoy growth.

Futures on the Standard & Poor’s 500 Index rose 0.3 percent today, indicating U.S. markets will rebound from yesterday’s decline following slower growth in American payrolls. The S&P 500 yesterday dropped 0.9 percent, retreating from a record high.

The Fed will maintain its bond buying at $85 billion a month, the Federal Open Market Committee said at the conclusion of a two-day meeting in Washington yesterday. It left unchanged its statement that it plans to hold its target interest rate near zero as long as unemployment remains above 6.5 percent and the outlook for inflation doesn’t exceed 2.5 percent.

U.S. Jobs

Reports yesterday showed U.S. companies added fewer workers than forecast in April and the Institute for Supply Management’s factory index fell to 50.7 in April from 51.3 in March. The Labor Department publishes its jobs and unemployment report on May 3. It may show combined payrolls for companies and government agencies increased by 148,000 workers in April after rising 88,000 in March, according to a survey of economists by Bloomberg.

Raw-materials shares fell as the London Metals Exchange Index of six base metals lost 3.2 percent yesterday, the most in more than four months. The index entered a bear market on April 23, commonly defined as a retreat of more than 20 percent from its most recent peak. BHP Billiton dropped 1 percent to A$31.86 and Rio Tinto Group slid 1 percent to A$54.47.

Toyota Motor retreated 1.4 percent to 5,470 yen, paring this year’s 37 percent advance. Nissan Motor Co. (7201) declined 2.3 percent to 976 yen. The yen strengthened to 97.35 per dollar, a sixth day of gains.

Takeda Pharmaceutical advanced 2.3 percent to 5,340 yen in Tokyo. A Los Angeles state court judge ruled attorneys weren’t able to properly link a former telephone-company worker’s bladder cancer to his Actos use, a Takeda diabetes drug.

DBS Group Holdings Ltd. rose 3.6 percent to S$17.37 in Singapore after Southeast Asia’s largest bank posted an unexpected increase in profit as fees, commissions and trading income rose.

To contact the reporter on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net

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