Asian stocks outside Japan fell for a fifth week, the longest streak of losses in two years, amid concern central banks are losing an appetite for more stimulus. Japanese stocks rebounded on the final day of the week as Nomura Holdings Inc and Fidelity Worldwide advised buying shares.
The MSCI Asia Pacific excluding Japan Index dropped 1.3 percent this week to 440.07, extending this year’s loss to 6.6 percent. A gauge that includes Japanese shares added 0.3 percent for the week. The Hang Seng China Enterprises Index fell for a record 12 straight days through Friday amid concern that growth is slowing in the world’s No. 2 economy.
“There’s lots of confusion around the world at present about what [US] central bank policy means for the outlook of the global economy, earnings and valuations,” Matthew Sherwood, the Sydney-based head of investment market research at Perpetual Ltd, said by e-mail.
More than US$1 trillion was wiped from the value of the Asia-Pacific benchmark equities gauge from May 20 through Thursday.
Investors have sold shares amid concern that global central banks will not inject more funds in the event that the US Federal Reserve decides to begin winding back its record stimulus program. Investors pulled US$8.5 billion from global equity funds in the week to June 12, according to Citigroup Inc.
The Bank of Japan kept its policy unchanged on Tuesday and refrained from allowing longer fixed-rate loans to banks to stem debt market volatility, even after spikes in Japanese government bond yields.
Japan’s TOPIX sank 0.1 percent this week, a fourth week of losses following on from its worst three-week decline since the global financial crisis in 2008. The Nikkei 225 Stock Average dropped 1.5 percent, falling into a bear market after retreating more than 20 percent from a May 22 high.
Even after a 17 percent fall from last month, the TOPIX has climbed 23 percent this year, making it the best-performing major equity gauge in the developed world.
With more than US$500 billion wiped from Japan’s equity markets from the May high through June 13, brokerages and investors are seeing buying opportunities.
“Assuming that Abenomics has not been defeated, we see no reason to become bearish on Japanese stocks, and recommend a bullish stance,” analysts led by Hiromichi Tamura at Nomura wrote in a report on Thursday
Shares in Taiwan closed slightly lower on Friday as investors pocketed gains posted earlier in the session on continued worries over the future of the US’ quantitative easing program, dealers said.
Most large-cap stocks failed to bounce back from steep declines on Thursday as the broader market faced stiff technical resistance ahead of 8,000 points, dealers added.
The TAIEX closed Friday down 13.92 points, or 0.17 percent, at 7,937.74.
The market opened up 0.34 percent and quickly rose to the day’s high on a technical rebound from a 2.02 decline a day earlier.
However, as the index moved closer 8,000 points, momentum weakened, pushing the broader market into the red by the end of the session, dealers said.
The weighted index fell 2 percent for the week.
Elsewhere, overseas investors unloaded a net US$2.7 billion from the Thai, Indonesian and Philippine stock markets so far this month, the biggest eight-day outflow since Bloomberg began compiling data in March 1999.
The three countries had led the four-year rally in global stocks through last month, and are now among the biggest losers.
Hong Kong’s Hang Seng Index fell 2.8 percent this week, a fifth week of declines, making it the worst performer among the world’s developed equity markets, according to data compiled by Bloomberg.
The Hang Seng China Enterprises gauge fell 5.1 percent, taking the decline to 21 percent, and pushing the so-called “H-shares” into a bear market.
China’s Shanghai Composite Index retreated 2.2 percent, dragging valuations for the benchmark index to a six-month low.
Australia’s S&P/ASX 200 Index added 1.1 percent, while New Zealand’s NZX 50 Index lost 0.4 percent. South Korea’s KOSPI slipped 3.9 percent and Singapore’s Straits Times Index lost 0.7 percent.
Shares of Industrial and Commercial Bank of China Ltd (ICBC, 中國工商銀行) dropped 3.2 percent to HK$5.07 as data pointed to slowing economic growth in China and the World Bank cut its outlook for global expansion. Aluminum Corp of China (Chinalco, 中國鋁業), the nation’s No. 1 producer of the light metal, tumbled 10 percent to HK$2.60.
In other markets on Friday:
Manila closed 2.10 percent, or 128.18 points, higher from Thursday at 6,242.26.
Wellington rose 0.43 percent, or 19.08 points, from Thursday to 4,420.98.
Mumbai rose 1.84 percent, or 345.50 points, from Thursday to 19,172.66 points.