Asian stocks fell for a second week, as investors weighed the timing of a reduction in the US Federal Reserve’s unprecedented stimulus amid improving US data.
BHP Billiton Ltd, the world’s largest mining company, slumped 2.5 percent in Sydney. Nitto Denko Corp, a Japanese chemical products maker, plunged 18 percent after cutting its profit forecast.
Haier Electronics Group Co (海爾電器) soared 21 percent in Hong Kong after Alibaba Group Holding (阿里巴巴) agreed to invest HK$2.82 billion (US$364 million) in the home-appliance maker and its logistics business. Gree Inc surged 9.9 percent in Tokyo after Goldman Sachs Group raised its outlook on the operator of a mobile gaming social network.
“After a strong November, markets in Asia were overbought, which made them vulnerable to some falls,” said Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors. “The transition from a liquidity or monetary policy driven rally to a fundamentally driven rally will create nervousness and volatility, but I believe bulls will come out on top.”
The MSCI Asia Pacific Index dropped 1.1 percent to 137.94 this week after falling the past three days. The gauge has gained 6.6 percent this year, as the Bank of Japan deployed unprecedented stimulus and China’s economy showed signs of stabilization.
The index traded at 13.6 times estimated earnings as of Friday, compared with multiples of 16 for the Standard & Poor’s 500 Index and 14.6 for the STOXX Europe 600 Index, according to data compiled by Bloomberg.
Australia’s S&P/ASX 200 Index fell 1.7 percent, South Korea’s KOSPI lost 0.9 percent, Hong Kong’s Hang Seng Index declined 2.1 percent, China’s Shanghai Composite slid 1.8 percent and Singapore’s Straits Times Index slid 1.6 percent.
Taiwan’s TAIEX bucked the trend, edging up 0.1 percent to close the week at 8,376.94. Shares rebounded on Friday, but turnover remained thin, making it hard for the index to overcome technical resistance at 8,400 points, dealers said.
Many investors preferred to stay on the sidelines amid lingering concerns that the Fed may decide next week to wind down its massive monthly fund injections into the US economy, dealers said.
The electronics sub-index closed 0.15 percent lower on Friday, with chip designer MediaTek Inc (聯發科) falling 0.95 percent to NT$417.
MediaTek shares faced pressure as investors feared its shipments would be affected by a possible shutdown of part of chip packager Advanced Semiconductor Engineering Inc’s (ASE, 日月光半導體) plant due to pollution concerns. ASE shares, however, rose 0.18 percent to close at NT$27.65, snapping a three-session losing streak.
Greater Kaohsiung’s Environmental Protection Bureau found on Monday that one of ASE’s plants had been dumping wastewater containing heavy metals into Houjing Creek, a major irrigation source for farmlands. The plant could face a shutdown.
Fortunately, buying rotated to the financial sector on expectations that life insurance companies will see their property asset value rising due to a change in the accounting methods,” Asia Securities Investment Consultant (亞洲投顧) analyst Chang Chih-cheng (張智誠) said.
The Fed will probably start reducing its US$85 billion of monthly bond purchases at its meeting on Tuesday and Wednesday, according to 34 percent of economists surveyed on Dec. 6 by Bloomberg, up from 17 percent in a Nov. 8 poll.
In other markets on Friday:
Mumbai closed down 1 percent, or 210.03 points, from Thursday at 20,715.58.
Wellington added 0.19 percent, or 8.86 points, from Thursday to 4,717.06.
Manila was flat, edging up 4.6 points to 5,767.13.
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