Asian stocks fall for third day on Fed taper concerns, China PMI

The MSCI Asia Pacific Excluding Japan Index declined 1.3%, with Japan's Topix index gaining one per cent

Asian stocks outside Japan fell for a third day after minutes from the US Federal Reserve's last meeting signaled bond purchases may be reduced in the coming months and a gauge of China's manufacturing fell more than expected.

Perseus Mining led gold producers lower, slumping 10 per cent in Sydney after prices for the metal fell amid concern tapering stimulus will erode demand for haven assets. Prince Frog International Holdings (1259), a maker of baby-care products, suspended after its accounting came under scrutiny by a short seller and lost 22 per cent in Hong Kong as it resumed trading. Honda Motor Co, a Japanese carmaker that gets more than 80 per cent of revenue abroad, rose 3.4 per cent as the yen fell.

The MSCI Asia Pacific Index dropped 0.7 per cent to 141.17 at 7:38 p.m. in Hong Kong, with nine of the gauge's 10 industry groups falling. The MSCI Asia Pacific Excluding Japan Index declined 1.3 per cent, with Japan's Topix index gaining one per cent.

"There's a feeling around that the Fed is starting to see the cost of ongoing quantitative easing mounting," said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which oversees $135 billion. "The market is still feeling very twitchy about it."

Hong Kong's Hang Seng Index lost 0.5 per cent, while the Hang Seng China Enterprises Index of mainland companies listed in Hong Kong slid 0.9 per cent. China's Shanghai Composite Index was little changed. A preliminary gauge of China's factory activity in November from HSBC Holdings Plc and Markit Economics fell to 50.4 in November from 50.9 in October. Analysts surveyed by Bloomberg had expected a reading of 50.8, with 50 the dividing line between growth and contraction.

Inflation goal
Japan's Nikkei 225 Stock Average rose 1.9 per cent as the central bank kept monetary policy unchanged today. The Bank of Japan will at some stage alter its target of two per cent inflation in two years as unprecedented bond-buying proves insufficient to achieve the goal, economists forecast in a Bloomberg News survey.

Japan's 121 trillion yen ($1.2 trillion) pension fund needs more independence from bureaucrats and should put some of the world's biggest retirement-savings pool into private equity and commodities, an expert panel said. The Government Pension Investment Fund should review domestic bond holdings and consider investing more overseas, according to a report released by the advisory group yesterday.

South Korea's Kospi index lost 1.2 per cent. Australia's S&P/ASX 200 Index fell 0.4 per cent, while New Zealand's NZX 50 Index declined 0.5 per cent.

Singapore's Straits Times Index fell 0.4 per cent even after the government raised its growth forecast for 2013 after the economy unexpectedly expanded last quarter. Taiwan's Taiex index retreated 1.3 per cent.

US futures
Futures on the Standard & Poor's 500 Index climbed 0.2 per cent today after the stocks gauge dropped 0.4 per cent yesterday. Central bank policy makers "generally expected that the data would prove consistent with the committee's outlook for ongoing improvement in labor-market conditions and would thus warrant trimming the pace of purchases in coming months," according to minutes of the Federal Open Market Committee's October 29-30 gathering released yesterday.

Perseus plunged 10 per cent to 30 Australian cents as gold traded near the lowest level in more than four months. Newcrest Mining, Australia's biggest gold producer, declined four per cent to A$8.70. Zijin Mining Group Co., China's largest producer of the precious metal, dropped 2.2 per cent to HK$1.80.

Yen slides
Japanese exporters rallied as the yen dropped against all of its 16 major counterparts. Honda added 3.4 per cent to 4,240 yen. Fanuc Corp, a maker of factory robotics that gets 78 per cent of its sales abroad, rose 1.8 per cent to 16,980 yen.

Prince Frog International slumped 22 per cent to HK$3.63 as it resumed trading after allegations from Glaucus Research Group dropped the stock by a record last month. The short-seller on October 16 initiated coverage of Prince Frog at a strong sell, saying tax records indicate the company's net income was less than reported. Prince Frog said the report was without merit and said it will consider buying back shares.

Australand Property Group fell four per cent to A$3.60 in Sydney, extending yesterday's loss, after CapitaLand Ltd. said it was selling part of its 59 per cent stake in the developer to raise as much as A$433.7 million ($403 million).

The Asia-Pacific gauge traded at 13.9 times estimated earnings as of yesterday, compared with 16.1 for the S&P 500 and 15.1 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.