Asian stocks fell, with the regional benchmark index paring last week’s gains, amid concern Greece might not meet bailout targets and after the IMF said China’s economy faced significant downside risks.
The MSCI Asia Pacific Index dropped 0.6 percent to 115.92 this week. The gauge has fallen more than 10 percent since this year’s high on Feb. 29 amid concern the global economic slowdown is deepening and after Greek leaders failed to agree on an 11.5 billion euro (US$14 billion) package of budget cuts pledged to get bailout funds, adding to signs Europe’s debt crisis is worsening. Greece’s politicians will meet again tomorrow.
“Signals coming out of Greece are not positive in terms of implementing agreements, and so Europe is going to remain a key negative for markets for quite some time to come,” said Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State Global Asset Management. “The outlook remains very difficult for major economies and therefore for equity markets.”
However, stocks advanced on Friday, after European Central Bank (ECB) President Mario Draghi said policymakers would do whatever was needed to preserve the euro and were prepared to intervene in bond markets as yields surged in Spain and Italy.
In Taipei, tech stocks led the TAIEX in staging a strong rebound on Friday, pushing the index past the 7,100 mark to close up 2.2 percent at 7,124.49. For the week, however, the TAIEX fell 0.05 percent.
“The local bourse had been consolidating for some time amid lingering concerns over the global economy,” Grand Cathay Securities (大華證券) analyst Mars Hsu (徐振家) said on Friday. “Investors simply seized the ECB’s comments to hunt bargains today.”
Hon Hai Precision Industry Co (鴻海精密), the assembler of Apple Inc’s iPhones and iPads, moved up 3.73 percent to NT$83.50 on Friday. However, it was down 6.8 percent for the week, as Apple suppliers fell across the region after the US firm’s profit and sales missed projections. Catcher Technology (可成科技), another Taiwanese manufacturer of casings for the iPhone, slid 5.8 percent to NT$162.50 this week.
Japan’s Nikkei 225 Stock Average declined 1.2 percent. Hong Kong’s Hang Seng Index retreated 1.9 percent. The Shanghai Composite Index decreased 1.8 percent. Australia’s S&P/ASX 200 Index and South Korea’s KOSPI both added 0.3 percent.
The losses in the MSCI Asia Pacific Index dragged the value of shares on the regional gauge to 11.8 times estimated earnings, compared with 13.5 times for the S&P 500 and 11.0 times for the STOXX Europe 600, according to data compiled by Bloomberg.
In other markets on Friday:
Manila rose 1.3 percent, or 66.99 points, from Thursday to 5,219.55.
Wellington rose 0.45 percent, or 15.55 points, to 3,501.29.
Mumbai was up 1.2 percent, or 199.37 points, to 16,839.19.