Asian stocks fell the most in a month, led by banks and consumer electronics makers, after G7 finance ministers said global economic prospects had weakened and financial market losses would continue.
Commonwealth Bank of Australia and HSBC Holdings Plc dropped after the G7 released a statement saying the world’s economy faces “downside” risks, according to an statement on Friday.
Chinese stocks fell the most in 11 weeks, led by China Vanke Co (萬科), after the central bank said there was room to raise borrowing costs. KDDI Corp, Japan’s second-biggest mobile-phone operator, slumped after reporting full-year profit that missed its target.
“We are in a period of volatility,” said Pankaj Kumar, who manages about US$460 million as chief investment officer at Kurnia Insurans Bhd in Petaling Jaya, outside Kuala Lumpur. “They’re confirming what’s been expected, the US is perhaps in a recession, Europe is taking a bit of a hit, so is Japan.”
The MSCI Asia Pacific Index lost 2.3 percent to 142.30 as of 5:33pm in Tokyo, its biggest decline since March 17 and ending a two-day, 1.9 percent rally.
All 10 of the benchmark’s industry groups dropped.
Japan’s Nikkei 225 Stock Average fell 3.1 percent to 12,917.51, its largest loss in a month. Benchmarks retreated in other Asian markets open for trading, with China’s CSI 300 Index plunging 6.5 percent to a 10-month low.
US stocks fell the most in three weeks on Friday, led by General Electric Co, after the world’s biggest maker of power- plant turbines, jet engines and locomotives said first-quarter earnings plunged 12 percent because of failed asset sales and losses at its finance businesses.
Commonwealth Bank, Australia’s biggest mortgage provider, retreated 2.3 percent to A$40.49. HSBC, Europe’s largest bank by market value, lost 1.6 percent to HK$130.70 in Hong Kong. Sumitomo Mitsui Financial Group Inc, Japan’s No. 2 publicly traded bank by market value, dropped 4.2 percent to ¥701,000.
China Vanke, the nation’s biggest listed property developer, slumped by the 10 percent daily limit to 22.92 yuan after central bank Governor Zhou Xiaochuan (周小川) said there’s still room for lending and deposit rates to rise.
The People’s Bank of China, aiming to counter the fastest inflation in a decade, raised interest rates six times last year and increased the proportion of deposits that banks must set aside as reserves to a record 15.5 percent.
“Inflation remains the biggest concern for policymakers in China,” said Lim Kok Boon, Singapore-based chief investment officer at Fortis Private Banking, which oversees US$9 billion in assets. “The stock market’s not going to like further tightening.”
KDDI, Japan’s second-biggest mobile-phone operator, fell 7.8 percent to ¥641,000, the largest loss since Feb. 22, after it reported full-year profit that missed its target by 1.8 percent because of costs to add customers.
Canon, the world’s biggest maker of digital cameras, lost 5 percent to ¥4,610, the most since March 1.
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