Asian stocks declined, with the benchmark index capping the first weekly drop in seven weeks, as the yen’s gain weighed on Japanese shares and earnings from HSBC Holdings PLC to Nikon Corp disappointed investors.
Mazda Motor Corp., a Japanese carmaker that derives 30 percent of its revenue from North America, slumped 6.6 percent. HSBC, Europe’s biggest bank, had its biggest one-week loss in more than a year after net income missed estimates. Nikon plunged to the lowest since January last year, after the Japanese camera maker cut its full-year net income target. Fonterra Shareholders Fund, a unit trust of Fonterra Cooperative Group, recouped losses in Wellington after the world’s biggest dairy exporter said its board would conduct a formal review into a contamination scare.
The MSCI Asia Pacific Index dropped 1.25 percent to 133.89, snapping six weeks of gains through Aug. 2, its longest winning streak since January. Shares fell even as data showed China’s trade beat estimates and inflation stayed subdued.
“This week, we’ve had some strength in the yen, which has been one of the key drivers,” said Garry Evans, head of global equity strategy at HSBC in Hong Kong.
On Japanese earnings, “people have overestimated the impact of a weak yen. In the rest of Asia, it’s a bit too early to tell,” he said.
The MSCI Asia gauge has dropped 7.3 percent from a five- year high reached in May, as investors weigh when the US Federal Reserve may start reducing its record stimulus.
Asia’s benchmark share index traded at 13 times average estimated earnings on Friday, compared with multiples of 15.34 for the Standard & Poor’s 500 Index and 13.95 for the Europe STOXX 600 Index, according to data compiled by Bloomberg.
Japan’s TOPIX dropped 4.6 percent after the yen rose to a seven-week high against the US dollar. A stronger yen cuts the value of overseas earnings at Japanese companies. Mazda slumped 6.6 percent to ￥412. Toyota Motor Corp, Asia’s biggest carmaker, slid 4 percent to ￥6,170. Canon Inc, the world’s biggest carmaker, lost 2.9 percent to ￥3,065.
In Taiwan, the TAIEX fell for four straight consecutive trading days, ending the week down 3 percent at 7,856.14.
Stocks ended lower on Friday on futures-led selling, as foreign institutional investors dragged down share prices in the spot market to profit on futures, dealers said.
“Foreign institutional investors built up a large number of short-position contracts in the futures market — about 15,000 contracts as of yesterday [Thursday] — paving the way for them to sell in the spot market today [Friday],” Concord Securities (康和證券) analyst Kerry Huang said.
“Foreign investors remained wary of a possible early exit by the US Fed from its monthly US$85 billion stimulus measures. With the Fed concerns in place, they are likely to continue to sell stocks,” Huang said.
Bucking the downtrend of the broader market, smartphone vendor HTC Corp (宏達電) rose 6 percent to close at NT$159 on Friday, after the company said it had launched the HTC Desire 500 model in Europe in a bid to grasp a higher share of the mid-range smartphone market.
“HTC’s gains were simply technical in nature after its recent heavy losses. Earnings uncertainty still haunts the stock amid fierce competition,” Huang said.
Meanwhile, South Korea’s KOSPI lost 2.2 percent. Australia’s S&P/ASX 200 Index retreated 1.2 percent after the Reserve Bank of Australia cut the overnight cash-rate target to a record-low 2.5 percent and lowered its growth outlook. New Zealand’s NZX 50 Index dropped 1.1 percent in Wellington.
Singapore’s Straits Times Index slipped 0.7 percent in the first three days of the week before markets shut for public holidays. Hong Kong’s Hang Seng Index declined 1.7 percent. China’s Shanghai Composite Index added 1.1 percent.
China’s exports rose 5.1 percent from a year earlier last month, and imports gained 10.9 percent, the government reported on Thursday. The consumer price index increased 2.7 percent from a year earlier last month, separate data showed yesterday.
“We’ve had a little better data recently, which suggest growth in China is stabilizing, but the bottom line is China’s growth is going to disappoint many investors in the next year or two,” Evans said.
Of the 548 companies on the MSCI Asia Pacific Index that have posted results since July 1 and for which estimates are available, 50.2 percent exceeded estimates, according to data compiled by Bloomberg.
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