Asian stocks fell for a second week as concern about Europe’s debt crisis and the Bank of Japan’s (BOJ) policy announcement disappointed investors. Losses were limited after US Federal Reserve Chairman Ben Bernanke said he was ready to do more to support growth if needed.
The MSCI Asia Pacific Index slid 0.1 percent to 124.30, after dropping 0.7 percent the previous week. The gauge has dropped more than 2 percent this month amid concern Europe’s debt crisis and a slowdown in the Chinese economy will overshadow a US economic recovery.
“It’s a time of a greatly unsettled atmosphere in Europe,” Quintin Price, the global investment chief for fundamental equities at BlackRock Inc, said in a Bloomberg Television interview from Hong Kong. “You see this resistance to austerity. Europe continues to be central.”
Taiwan’s TAIEX fell to 7,480.50 on Friday, down 0.4 percent from the previous week.
Japan’s Nikkei 225 Stock Average fell 0.4 percent this week, dropping for a fourth week. Japanese shares on Friday reversed an earlier surge that came after the BOJ added stimulus, as investors interpreted a statement on price gains as a sign an end to deflation may damp prospects for further easing.
“Investors are worried the BOJ may tighten its monetary policy, not ease it,” said Koichi Kurose, chief economist at Resona Bank Ltd in Tokyo.
South Korea’s KOSPI added less than 0.1 percent. Australia’s S&P/ASX 200 Index lost 0.1 percent. Hong Kong’s Hang Seng Index declined 1.3 percent this week. The Shanghai Composite Index, which tracks the larger of China’s stock exchanges, lost 0.4 percent after a survey on Monday showed the nation’s manufacturing may contract for a sixth month this month.
All eyes were fixed on HSBC’s China purchasing managers’ index that showed factory output rose to 49.1 this month from 48.3 last month.
However, the reading remained below the key boom-or-bust 50-point level, indicating an improvement, but no return to expansion just yet.
Stocks also fell after Spain’s sovereign credit rating was cut on Thursday for the second time this year by Standard & Poor’s on concern the country will have to provide further fiscal support to banks as the economy contracts.
A revolt against spending cuts in the Netherlands prompted Dutch Prime Minister Mark Rutte to submit his Cabinet’s resignation on Monday. The backlash against austerity measures in Europe has expanded in recent weeks after Spain struggled to meet EU-imposed deficit targets and election campaigns in Greece faced anti-austerity rumblings.
Losses in stocks were limited after Bernanke on Wednesday said the Fed stands ready to add to its stimulus if necessary even after leaving its policy unchanged and upgrading its view of the US economy for this year. US new and pending home sales advanced last month, data showed this week.
In other markets on Friday:
Manila fell 0.96 percent, or 49.92 points, from Thursday to 5,169.05.
Wellington climbed 0.31 percent, or 10.84 points, from Thursday to 3,531.66.
Mumbai ended flat, creeping up 3.58 points, or 0.02 percent, from Thursday to 17,134.25.