Asian stocks fell, with the regional benchmark index dipping to a one-month low, as a drop in oil dragged down commodity shares and earnings from Inpex Corp to Mitsubishi Materials Corp disappointed investors.
The MSCI Asia Pacific Index slid 1.4 percent to 125.74 in Hong Kong, falling 1.1 percent from last week and posting its third week of losses.
Bullish momentum in equities from a February low faltered over the past month, as signs of weakness in the global economy and disappointing corporate earnings heightened concerns over whether central bank officials would be able to effectively boost growth.
“After the rally in March and April, things are still looking a little bit uncertain,” said Oliver Lee (李健生), investment director at Old Mutual Global Investors (Asia Pacific) Ltd. “There’s not much conviction in the market. The market is still being driven by central bank sentiment and currency movements. The earnings season in Japan hasn’t been great.”
Japan’s TOPIX sank 1.3 percent on Friday. Of the companies on the TOPIX that have reported earnings since the beginning of last month, about 62 percent missed analyst estimates for profit, according to data compiled by Bloomberg.
Energy explorer Inpex slumped 4.2 percent after forecasting operating profit that fell short of expectations. Yokohama Rubber Co tumbled 8.9 percent after reporting first-quarter net income plunged.
In Taipei, shares extended their losses into Friday, as market sentiment was hurt by global index provider MSCI Inc’s move to cut the country’s weighting in its indices, dealers said.
Investors were also cautious about ties with China ahead of the inauguration of a new government on Friday and continued to unload their holdings, in particular in large-cap stocks such as Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), they said.
The TAIEX slid 0.7 percent to 8,053.69 on Friday. It also dropped 1.1 percent from 8,146.43 on Friday last week.
The MSCI cut Taiwan’s weighting in the MSCI Emerging Markets Index to 11.63 percent from 11.88 percent. It also lowered Taiwan’s weighting in the MSCI All-Country Asia ex-Japan Index to 13.66 percent from 14.02 percent, dealers said.
It was the 11th consecutive quarter that the index provider lowered Taiwan’s weighting in the MSCI Emerging Markets Index, but MSCI left Taiwan’s weighting in the MSCI All-Country World Index unchanged at 1.21 percent.
“The cuts in the MSCI indices are expected to prompt foreign institutional investors to move funds out of Taiwan, the last thing investors here want to see,” Hua Nan Securities Co (華南永昌證券) analyst Henry Miao (苗台生) said.
Foreign institutional investors sold a net NT$14.09 billion (US$431.9 million) in shares on Friday, Taiwan Stock Exchange data showed.
After seeing its weighting in the MSCI index cut by 0.26 percentage points, the steepest reduction of any individual Taiwanese stock in the index, TSMC fell 1.37 percent to close at 144..
Hon Hai Precision Industry Co (鴻海精密), the world’s largest contract electronics maker, bucked the downturn, gaining 1.5 percent to end at NT$74.40 even though its weighting in the MSCI index was also cut by 0.26 percentage points.
“The buying in Hon Hai reflected the company’s generous proposal to dole out NT$5 in dividends per share for 2015, including a NT$4 per share cash dividend, and Hon Hai’s gains kept the weighted index from falling further,” Miao said.
Chinese stocks capped a fourth week of declines, the longest stretch in two years, as metal prices dropped and the yuan weakened amid concern the government would hold off from new stimulus even as growth falters.
The Shanghai Composite Index slipped 0.3 percent, bringing the weekly loss to 3 percent. The Hang Seng China Enterprises Index of mainland shares traded in Hong Kong fell 1.3 percent on Friday.
The Philippine Stock Exchange Index jumped 1.5 percent, taking its weekly advance to 6.4 percent, following Monday’s elections. Philippine presumptive president Rodrigo Duterte said he would continue the macroeconomic policies of the outgoing administration of President Benigno Aquino III.
In other markets, South Korea’s KOSPI slipped 0.5 percent. Australia’s S&P/ASX 200 Index dropped 0.6 percent. New Zealand’s S&P/NZX 50 Index lost 0.1 percent.
The FTSE Bursa Malaysia KLCI Index sank 1.5 percent amid speculation of foreign selling. Singapore’s Straits Times Index fell 0.8 percent.
Hong Kong’s Hang Seng Index slid 1 percent. India’s S&P BSE Sensex lost 1.3 percent.
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