Asian stocks fell, with the regional benchmark index heading for its first monthly decline since May, as investors await a speech by US Federal Reserve Chairman Ben Bernanke and as reports showed lower industrial output in South Korea and Japan amid slowing economic growth.
The MSCI Asia Pacific Index slipped 0.6 percent to 117.63 as of 7:57pm on Friday in Tokyo, heading for its lowest close since Aug. 3. The gauge is poised for a 2.2 percent decline this week, the most since the period ended on July 13, extending this month’s losses to 1 percent.
“There’s been doubts about the US recovery momentum and heightened uncertainties in Europe and Asia,” said Ng Soo Nam, Singapore-based chief investment officer at Nikko Asset Management, which oversees about US$165 billion. “If the bad numbers persist, we should see some policy support from governments.”
The MSCI Asia Pacific Index fell 8.3 percent from this year’s high on Feb. 29 through Thursday. Stocks on Asia’s benchmark index were valued at 12.4 times estimated earnings on average, compared with 13.6 for the S&P 500 and 11.5 for the STOXX Europe 600 Index, according to data compiled by Bloomberg.
The TAIEX closed in positive territory on Friday on the back of rotational buying, as the construction sector was in focus after several property developers reported impressive earnings for the first half of this year, dealers said.
On Friday, the TAIEX closed up 25.62 points, or 0.34 percent, at 7,397.06, after moving between 7,363.25 and 7,406.52 on turnover of NT$60.98 billion (US$2.04 billion), down 1.1 percent from a weekly close of 7,477.53 on Aug. 24.
The market opened down 0.11 percent at the day’s low after overnight weakness on Wall Street, and bargain hunters turned active to pick up market laggards such as property developers, which helped the index reverse its early losses by the end of the session, the dealers said.
“Buying rotated quickly among sectors in recent sessions. As a result, the market failed to make a breakthrough from the current doldrums due to the lack of a mainstream sector to maintain momentum,” Concord Securities (康和證券) analyst Kerry Huang said.
The construction sector scored the highest gains among the eight major stock categories, finishing up 1.7 percent. Among the winning property developers, Farglory Land Development (遠雄建設) gained 4.87 percent to close at NT$53.90 and Prince Housing & Development Corp (太子建設) rose 4.38 percent to end at NT$21.45 after they reported NT$3.33 and NT$1.09 in earnings per share, respectively, for the first half of this year.
“Market sentiment toward the global economy remained cautious, driving many investors to the sidelines throughout the session,” Huang said. “As turnover remained thin, it was unlikely that the market would have been able to jump the stiff technical hurdles ahead of 7,400 points.”
Japan’s Nikkei 225 Stock Average sank 2.5 percent this week, after the government downgraded its assessment of the economy on Tuesday. The government lowered its economic evaluation of the US, Europe, China, the rest of Asia except India, and said Japan’s overseas shipments are “growing weaker.”
Retail sales in the nation fell more than estimated in July, while industrial production unexpectedly dropped. Consumer prices fell 0.3 percent from a year earlier last month, pointing to little progress in the fight against deflation.
China’s Shanghai Composite Index fell 2.1 percent, while Hong Kong’s Hang Seng Index slid 2 percent after a government report showed on Monday profit at Chinese industrial companies dropped in July by the most this year.
South Korea’s KOSPI declined 0.8 percent after industrial production fell for a second month in July, and after a report showed on Thursday confidence among the country’s manufacturers stood near the lowest level since the global financial crisis.
Australia’s S&P/ASX 200 Index and Singapore’s Straits Times Index both fell 0.8 percent.
There was fresh evidence that global headwinds were dragging on the Japanese recovery, with data showing factory output unexpectedly fell 1.2 percent in July, while the strong yen also hurt exporters.
“It was originally assumed that the weakness in April-May would be temporary and followed by a rebound in summer, but such a scenario clearly fell through,” said Tatsushi Shikano, senior economist at Mitsubishi UFJ Morgan Stanley Securities.
In other markets on Friday:
Manila gained 0.91 percent, or 46.88 points, from Thursday to close at 5,196.19.
Wellington gained 1.02 percent, or 37.12 points, from Thursday to close at 3,666.68.
Mumbai lost 0.92 percent, or 160.89 points, from Thursday to close at 17,380.75.