Asian stocks fell for the first time in three days and Chinese shares entered a so-called correction, amid concern a rally in equities had outpaced earnings prospects.
China Mobile dropped 3.8 per cent in Hong Kong, as the Chinese commerce ministry said efforts to boost domestic demand can’t completely offset an export slump. Great Wall Motor Co, China’s largest maker of pick-up trucks, declined 10 per cent in Hong Kong and Zhuzhou Smelter Group Co sank 6 per cent in Shanghai after they reported lower profits. Ascendas Real Estate Investment Trust slumped 6.3 per cent in Singapore after selling shares at a discount.
The MSCI Asia Pacific Index dropped 1.3 per cent to 111.26 as of 5:13 p.m. in Tokyo, after a two-day, 1.8 per cent gain. The gauge has added 58 per cent from a five-year low on March 9 amid speculation of a global economic recovery. Stocks in the measure are valued at an average 24 times estimated profit, higher than the MSCI World Index’s 17 times.
“Given the recent rally, it’s no surprise investors are booking profits,” said Masaru Hamasaki, a senior strategist at Tokyo-based Toyota Asset Management Co., which oversees the equivalent of $13 billion.
