Asian stocks this well fell the most since November, as Apple Inc suppliers declined after the US tech giant reported its weakest sales since 2009 and some investors speculated shares may have risen too far, too fast.
Hon Hai Precision Industry (鴻海精密), which assembles iPads and iPhones for Apple, slid 2.3 percent to NT$83.40 in Taipei trading. Samsung Electronics Co fell to the lowest in almost two months in Seoul, as the world’s largest maker of mobile phones said the strengthening won may cut operating profit by at least 3 trillion won (US$2.8 billion) this year. Sony Corp soared in Tokyo trading as the TOPIX posted its longest streak of weekly gains since January 1973, boosted by the yen’s weakness against the US dollar.
The MSCI Asia Pacific Index fell 0.7 percent to 131.74. Gains in Japanese shares limited declines on the broader pan-Asian benchmark as speculation the new government would take steps to end deflation pushed the TOPIX higher for an 11th week. The MSCI Asia Pacific excluding Japan Index dropped 0.8 percent.
“Markets are at highs and some investors are becoming cautious after everyone turned bullish on stocks,” said Koji Toda, chief fund manager at Tokyo-based Resona Bank. “Most investors are still optimistic on the equity market. Just because markets are falling today doesn’t mean they will continue to drop.”
The MSCI Asia Pacific index, the benchmark regional equities gauge, surged to the highest level in 17 months on Tuesday. That left the measure trading at 14.3 times average estimated earnings compared with 13.6 for the Standard & Poor’s 500 Index and 12.3 times for the STOXX Europe 600 Index, according to data compiled by Bloomberg.
International investors are the most bullish on stocks in at least three-and-a-half years, with close to two-thirds planning to raise their holdings of equities during the next six months, according to a Bloomberg survey published on Tuesday. As the global financial and business elite gathered in Davos, Switzerland, for their annual forum, 53 percent of respondents to the Bloomberg Global Poll also said equities would offer the highest return in the next year.
Taiwan’s TAIEX slid 0.8 percent this week to close at 7,672.58. While the index extended its losses on Friday, it garnered technical support as it approached 7,600 points and investors, with plenty of liquidity on their hands, pursued bargains, dealers said.
Select Taiwanese suppliers to Apple, in particular Hon Hai, also showed their resilience on Friday by outperforming the broader market, an indication that Apple’s negative leads have largely been digested, they said.
“Look at Hon Hai. After a recent consolidation of the stock, investors were more willing to buy its shares to take advantage of the cheap valuation,” Concord Securities (康和證券) analyst Kerry Huang said.
Australia’s S&P/ASX 200 Index rose 1.3 percent this week, to the highest level since April 2011. The gauge advanced for the past eight days, its longest streak of advances in almost three years. Consumer prices last quarter rose at a slower-than-expected pact, a report showed on Wednesday, pushing down the Australian dollar and giving the central bank scope to reduce interest rates further.
Hong Kong’s Hang Seng Index fell 0.1 percent and China’s Shanghai Composite Index slid 1.1 percent. Singapore’s Straits Times Index gained 1.8 percent.
Japan’s TOPIX gained 0.6 percent, marking its longest weekly winning streak since 1973. The Bank of Japan this week said it would shift to US Federal Reserve-style open-ended asset purchases and the yen weakened as falling consumer prices added to the case for further easing.
In other markets on Friday:
Manila closed 0.82 percent higher, adding 50.37 points from Thursday to 6,167.64.
Mumbai rose 0.9 percent, or 179.75 points, to 20,103.53.
Wellington rose 0.24 percent, or 9.91 points, to 4,199.82.
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