Asian stocks posted their biggest weekly drop in almost a month as commodity prices fell and disappointing earnings damped confidence the global economy would sustain a recovery.
Mitsui & Co, a Japanese trading company that counts commodities as its biggest source of profit, slumped 6.1 percent. PetroChina Co (中石油) lost 8.4 percent in Hong Kong after quarterly earnings dropped. National Australia Bank Ltd retreated 3.4 percent in Sydney as the lender swung to a loss.
The MSCI Asia-Pacific Index lost 2.6 percent to 116.46 in the past week, its steepest dive since the five days ended Oct. 2, and retreated 1.3 percent last month. The gauge had risen for seven straight months to September on speculation government spending and looser monetary policies would accelerate the global rebound.
“Investors are wise to take some of their money off the table,” said Jonathan Ravelas, a strategist at Manila-based Banco de Oro Unibank Inc, which has about US$8 billion of assets.
“There is a lingering doubt in the market if the corporate earnings we are seeing are being driven by actual demand or is it all because of government stimulus spending,” he said.
The Asian stock index rose 1.55 percent on Friday, breaking a three-day losing streak, after separate government reports showed Japan’s jobless rate unexpectedly dropped and the US economy grew faster than economists had estimated.
The Nikkei 225 Stock Average fell 2.4 percent in Tokyo, while Australia’s S&P/ASX 200 Index dropped 4.5 percent. Oil prices fell about 1 percent before Asian stock markets closed for the week, the first weekly drop this month.
The Hang Seng Index retreated 3.7 percent after the Hong Kong Monetary Authority raised deposit levels for luxury apartments last Friday.
Taiwanese share prices are expected to encounter further pressure next week with real estate firms in focus on worries that the central bank may reduce liquidity to prevent speculation, dealers said.
Hindered by high valuations, investors are likely to avoid large-cap electronic stocks amid fears that foreign institutional investors will cut their holdings, they said.
The market is expected to move down next week, testing the nearest support at around 7,250 points or even falling below the level, while any profit-taking may be capped at about 7,500, dealers said.
For the week to Friday, the weighted index fell 309.20 points, or 4.04 percent, to 7,340.08 after a 0.85 percent decline a week earlier.
Average daily turnover stood at NT$111.72 billion (US$3.44 billion), compared with NT$123.52 billion dollars a week ago.
“Investors, in particular foreign institutions, have embraced concerns that the market will suffer more corrections. Many are afraid that a dip below the key 7,000 point [level] is possible,” Taiwan International Securities (金鼎證券) analyst Arch Shih (施博元) said.
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