Asian Stocks Drop on China PMI, Concern Fed May Taper Stimulus – Businessweek

Asian stocks declined, with the
regional benchmark index heading for its biggest drop in five
weeks, after China’s manufacturing output unexpectedly
contracted and amid speculation the Federal Reserve may soon
wind back stimulus.

Jiangxi Copper Co. (358), China’s biggest producer of the metal,
dropped 2.5 percent in Hong Kong. Westpac Banking Corp. slipped
4.2 percent, leading Australian lenders lower. Fast Retailing
Co., a clothier that has nearly 11 percent weighting on the
Nikkei 225, gained 3.9 percent on speculation sales at Japanese
retailers will increase after a report showed foreign visitors
last month climbed almost a fifth.

The MSCI Asia Pacific Index declined 1.1 percent to 141.87
as of 11:56 a.m. in Tokyo, heading for its biggest drop since
April 18. Almost four shares fell for each that rose on the
gauge. The measure surged 11 percent this year through yesterday
as Japanese shares rallied and the U.S. economy improved. Fed
Chairman Ben S. Bernanke said yesterday that prematurely
withdrawing quantitative easing would put the U.S. economic
recovery at risk.

“The market is negatively reacting to Bernanke’s comments
and disappointing manufacturing data from China,” said Daphne Roth, Singapore-based head of Asia equity research at ABN Amro
Private Bank, which oversees about $207 billion. “Investors
should use this as an opportunity to accumulate stocks. China’s
economy will probably grow a bit faster in the second half as
the economies of the U.S. and Japan improve.”

Regional Gauges

Hong Kong’s Hang Seng Index dropped 1.6 percent, with all
but two stocks on the measure declining, while China’s Shanghai
Composite Index decreased 0.4 percent, with a gauge of property
developers the only industry group to advance. South Korea’s
Kospi Index (KOSPI) slid 0.6 percent. Australia’s S&P/ASX 200 Index
declined 1.8 percent, while New Zealand’s NZX 50 Index fell 0.4
percent.

China’s manufacturing is contracting for the first time in
seven months, adding to signs that economic growth is losing
steam for a second quarter. The preliminary reading of 49.6 for
a Purchasing Managers’ Index released by HSBC Holdings Plc and
Markit Economics compares with a final 50.4 for April. The
number also was below the 50.4 median estimate in a Bloomberg
News survey of 13 analysts. A reading below 50 indicates
contraction.

Japan’s Topix Index dropped 1.1 percent, erasing gains of
as much as 1.1 percent. The benchmark Nikkei 225 Stock Average (NKY)
added 0.2 percent, paring gains of as much as 2 percent.
Japanese shares rose earlier after the yen fell for a third day
and traded near the weakest level against the dollar since
October 2008. A weaker yen boosts the value of overseas income
at Japanese exporters when repatriated.

To contact the reporters on this story:
Jonathan Burgos in Singapore at
jburgos4@bloomberg.net;
Adam Haigh in Sydney at
ahaigh1@bloomberg.net

To contact the editor responsible for this story:
Nick Gentle at
ngentle2@bloomberg.net

May 23 (Bloomberg) — Kirk Hartman, Los Angeles-based chief investment officer at Wells Capital Management, talks about U.S., Japan and emerging-market stocks.
Hartman also discusses the outlook for the U.S. economy and Federal Reserve monetary policy. He speaks with Susan Li on Bloomberg Television’s “First Up.”(Source: Bloomberg)