Asian stocks fell, with the regional benchmark index posting its biggest weekly loss this year, on concern slowdowns in China and Europe would weigh on the global economy, dampening demand for growth-sensitive equities.
The MSCI Asia Pacific Index fell 1.3 percent to 126.33, the biggest weekly loss since the period ended Dec. 16. The gauge has climbed 12.5 percent this year amid optimism a US economic recovery will brighten the earnings outlook for the region’s exporters.
The rally boosted the value of stocks on the measure to 14.9 estimated earnings on average as of Friday, compared with 13.4 times for the Standard & Poor’s 500 Index and 11.1 times for the STOXX Europe 600 Index.
“People are starting to realize that things are not as great as initially thought,” said Lee King Fuei, a Singapore-based fund manager at Schroders PLC. “There’s a risk of much slower growth in China should bad debts climb and banks raise capital or restrict lending.”
Taiwan’s benchmark TAIEX rose 0.2 percent to 8,076.61 on Friday, its third day of gains and highest close since March 15. The gauge climbed 0.3 percent this week.
Among stocks that gained on the week, Taiwan Semiconductor Manufacturing Co (台積電) rose 5.3 percent to NT$85.4 after saying it may invest more capital to meet growing demand for chips. Taiwan’s Ministry of Economic Affairs reported that export orders rebounded last month, led by demand for electronics.
However, most of the region’s major indices were down for the week. Japan’s Nikkei 225 Stock Average dropped 1.2 percent this week, snapping a six-week rally, after the nation posted an unexpected trade surplus, strengthening the yen. South Korea’s KOSPI lost 0.4 percent. Australia’s S&P/ASX 200 Index slid 0.1 percent.
Hong Kong’s Hang Seng Index slid 3 percent this week. The Shanghai Composite Index lost 2.3 percent even after the central bank cut reserve requirements to more branches of Agricultural Bank of China (中國農業銀行).
Asian stocks fell after a preliminary report on March 22 showed China’s manufacturing might contract for a fifth month this month. Shares also declined after a euro-area composite index dropped last month, showing an unexpected contraction in the manufacturing and services industries, London-based Markit Economics said.
Of the 591 companies in the MSCI Asia Pacific Index that have reported earnings since Jan. 9, 349 have missed analysts’ estimates, while 171 have beat estimates, according to data compiled by Bloomberg.
In other markets on Friday:
Manila was virtually unchanged, dipping 1.08 points to 5,042.44.
Wellington closed 0.73 percent, or 25.35 points, lower at 3,449.31.
Mumbai rose 0.96 percent to 7,361.74.
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