Asian stocks fell, sending the MSCI Asia Pacific Index to an eight-week low, on speculation a US economic recovery will be delayed and as Japan’s Prime Minister called national elections.
Samsung Electronics Co, Asia’s biggest maker of computer- memory chips and flat screens, lost 3.9 per cent in Seoul as a US consumer sentiment index fell more than economists estimated. Cathay Financial Holding Co sank 6.7 per cent in Taipei on concern a trade agreement with China will take longer than expected to negotiate. Japan’s Nikkei 225 Stock Average sank 2.6 per cent as Prime Minister Taro Aso, whose party is trailing in polls, called an election for August 30.
The MSCI Asia Pacific Index slumped 2.4 per cent to 98.20 as of 7:37 p.m. in Tokyo, the lowest level since May 18. The gauge has lost 6.7 per cent from an eight-month high on June 12 as optimism for a global economic recovery waned. The index had risen as much as 49 per cent from a five-year low on March 9.
“The market did run ahead of itself,” said Diane Lin, a Sydney-based fund manager at Pengana Capital, which oversees about $1.9 billion. “The data we’ve been seeing in the US have not been as strong as the market had been hoping for. We’re still very cautious.”
Taiwan’s Taiex Index tumbled 3.5 per cent, the most since April 17. South Korea’s Kospi Index sank 3.5 per cent. Hong Kong’s Hang Seng Index lost 2.6 per cent. Australia’s S&P/ASX 200 Index declined 1.5 per cent, led by Rio Tinto Group, the world’s third-largest mining company, which fell 3.6 per cent as commodity prices dropped.
Among stocks that advanced today, Daiichi Sankyo Co rose 2.4 per cent after its anti-clotting drug was approved for sale in the US Kirin Holdings Co, Japan’s biggest beverage maker, surged 7.8 per cent after the Nikkei newspaper said the company may merge with Suntory Holdings Ltd. Futures on the US Standard & Poor’s 500 Index fell 0.4 per cent, while Treasuries rose as demand for the relative safety of government debt increased. The S&P 500 dropped 0.4 per cent on July 10 after the Reuters/University of Michigan preliminary index of consumer sentiment slid to 64.6 in July from the prior month.
