Asian stocks fell for the first week in four as China’s inflation rose faster than estimated and the IMF cut growth forecasts for the US and Japan.
The MSCI Asia Pacific Index dropped 0.5 percent to 135.82 in the week. The gauge rose for three straight weeks previously after the US unemployment rate dropped to a two-year low and companies from Hitachi Ltd to Toyota said factories in Japan shut after the nation’s strongest earthquake and ensuing tsunami on record would reopen this month.
“Investor sentiment is deteriorating because it seems uncertainty is going to remain for a long period of time,” Ikuo Mitsui of Vivace Capital Management Co said. “There’s concern about how disruptions to Japan’s supply chain will affect the global economy.”
Taiwan’s benchmark TAIEX dropped 1.98 percent from the previous week to close at 8,718.12. Hong Kong’s Hang Seng Index dropped 1.6 percent, while China’s Shanghai Stock Exchange Composite Index added 0.7 percent. Australia’s S&P/ASX 200 shed 1.8 percent.
Japan’s Nikkei 225 Stock Average fell 1.8 percent as the government raised the severity rating of its post-earthquake nuclear crisis to the highest level, matching the rating of the 1986 Chernobyl disaster.
Japanese Minister of State for Economic and Fiscal Policy Kaoru Yosano said that the country’s March 11 earthquake may result in a larger hit to the economy than previously estimated.
China said its economy grew a more-than-estimated 9.7 percent in the first quarter from a year before and the rate of inflation accelerated to 5.4 percent last month from a year earlier, the fastest pace since 2008. That exceeded the estimate of a 9.4 percent increase in GDP and price increases at a rate of 5.2 percent, according to the median estimates of economists surveyed by Bloomberg.
The central bank has raised the reserve-requirement ratio for banks nine times since the start of last year and borrowing costs four times.
“China’s economic growth remains robust,” said Benjamin Tam, a portfolio manager at IG Investment Ltd. “The government may continue to step up tightening measures in the second quarter. The overall market will remain optimistic because of the stronger growth, but there could be some concerns on the rate hike.”
The US economy will expand 2.8 percent this year, slowing from 2.9 percent last year and less than the 3 percent growth for this year’s forecast in January, the IMF said. The Washington-based fund also cut its estimate of Japan’s growth to 1.4 percent from 1.6 percent in the previous forecast after the March 11 earthquake and tsunami.
In other markets on Friday:
Manila gained 0.39 percent, or 16.68 points, from Thursday to 4,251.64.
Wellington ended flat, edging down 1.79 points from Thursday to 3,452.69.
Mumbai closed down 1.57 percent, or 310.04 points, from Thursday at 19,386.82.
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