Most Asia Stocks Outside Japan Fall; Apple Suppliers Drop – Bloomberg

Most Asian stocks outside Japan fell
as Apple Inc. (AAPL) suppliers fell after the iPhone maker reported its
weakest sales since 2009 and as North Korea threatened a nuclear
test. Japanese shares rallied on a weaker yen after China’s
manufacturing beat estimates.

AAC Technologies Holdings Inc. (2018), which makes speakers for
Apple, dropped 6 percent in Hong Kong. Tata Motors Ltd.
retreated 6.6 percent in Mumbai after the Indian automaker’s
Jaguar Land Rover Plc unit said profit growth probably stalled
in the fiscal third quarter. Toyota Motor Corp. (7203), a Japanese
automaker that gets more than a quarter of its revenue from
North America, rose 2.2 percent in Tokyo.

The MSCI Asia Pacific excluding Japan Index dropped 0.4
percent to 477.69 as of 5:12 p.m. in Tokyo after rising as much
as 0.1 percent. About three stocks declined for every two that
gained. The MSCI Asia Pacific Index, which includes Japan, slid
0.1 percent. The gauge jumped 10 percent through yesterday from
Nov. 14, when elections were announced in Japan, spurring a
rally in the country’s shares amid speculation the new
government would take necessary steps to end deflation.

“There’s more caution in Asia, and optimism and risk-on
mood is not spreading as much,” said Ayako Sera, a market
strategist at Sumitomo Mitsui Trust Bank Ltd., which has 33
trillion yen ($369 billion) in assets. “The long-term trend of
emerging countries growing faster than developed countries still
remains.”

Shares in Asia reversed or pared gains after the official
Korean Central News Agency said North Korea will conduct a
nuclear test “targeted” at the U.S. after the Obama
administration pushed through additional sanctions at the United
Nations.

Relative Value

The MSCI Asia Pacific Index, the benchmark regional
equities gauge, traded at 14.2 times average estimated earnings
compared with 13.5 for the Standard & Poor’s 500 Index and 12.2
times for the Stoxx Europe 600 Index, according to data compiled
by Bloomberg.

Hong Kong’s Hang Seng Index fell 0.2 percent. China’s
Shanghai Composite Index (SHCOMP) retreated 0.8 percent after the gauge
jumped as much as 1.8 percent earlier as a private survey of
companies showed China’s manufacturing is expanding at the
fastest rate in two years.

The preliminary reading of a Purchasing Managers’ Index was
51.9 in January, according to a statement from HSBC Holdings Plc
and Markit Economics today. That compares with the 51.5 final
reading for December and the 51.7 median estimate of 17 analysts
surveyed by Bloomberg News. A reading above 50 indicates
expansion.

‘Recovery on Track’

“The China manufacturing data was fantastic and more
confirmation that the Chinese economic recovery is on track,”
said Shane Oliver, Sydney-based head of strategy at AMP Capital
Investors Ltd., which has about $126 billion under management.
“It’s good for Chinese growth, Asian regional growth and the
global economy given the contribution China makes to global
growth. But the question is whether that’s fully priced into
stocks.”

Japan’s Nikkei 225 Stock Average climbed 1.3 percent,
rising the first time in four days, even after the nation’s
December exports fell more than expected, dropping 5.8 percent
from a year earlier. The yen weakened, snapping a three-day
advance against the dollar that saw the equity benchmark
yesterday cap its longest losing streak in two months.

The yen extended losses after Japan’s Deputy Economy
Minister Yasutoshi Nishimura said its correction from high
levels “isn’t over yet.” A weaker yen boosts overseas income
at Japanese companies when repatriated.

Exporters Advance

Toyota rose 2.2 percent to 4,245 yen, while Sony Corp., an
exporter of consumer electronics, advanced 1.9 percent to 1,189
yen.

Dainippon Sumitomo Pharma Co. (4506) surged 16 percent to 1,270
yen in Tokyo after public broadcaster said the drugmaker will
soon apply for clinical trials in Japan on world’s first
medicine to target cancer stem cells.

Lenovo Group Ltd. (992), a Chinese personal-computer maker, rose
6.6 percent to HK$8.43 in Hong Kong on a report the company’s
smartphone business in China turned profitable.

Australia’s S&P/ASX 200 Index (AS51) advanced 0.5 percent. South
Korea’s Kospi Index lost 0.8 percent after a report showed the
economy expanded less than estimated in the fourth quarter.
Taiwan’s Taiex Index dropped 0.6 percent.

Futures on the Standard & Poor’s 500 Index fell 0.4 percent
today. The S&P 500 Index (SPX) yesterday closed at the highest level
in five years as lawmakers voted to temporarily suspend the
federal debt limit, and Google Inc. and International Business
Machines Corp. shares rallied amid better-than-forecast
earnings.

Apple Concern

Nasdaq 100 Index futures fell 1.3 percent after Apple
reported its slowest profit expansion since 2003 and weakest
sales increase in 14 quarters amid rising costs and accelerating
competition with Samsung Electronics Co. The results reinforce
investor concerns about Apple’s growth after the stock fell 27
percent since September.

AAC Technologies slumped 6 percent to HK$28.20 in Hong
Kong. Ibiden Co. (4062), an electronics substrate maker that supplies
Apple, slid 4.7 percent to 1,248 yen in Tokyo. Hon Hai Precision
Industry Co., which assembles Apple products, dropped 2.9
percent to NT$82.50 in Taipei.

Among other stocks that fell, Tata Motors, which derived
three quarters of its operating income from Jaguar Land Rover in
the last financial year, declined 6.5 percent to 292.75 rupees
in Mumbai. The stock was the biggest drag on the benchmark BSE
India Sensitive Index.

Huabao International Holdings Ltd., a provider of tobacco
flavors, tumbled 11 percent to HK$4.31 in Hong Kong after going
ex-dividend today. It was the biggest decline on the MSCI Asia
Pacific Index.

Yaskawa Electric Corp (6506) slumped 4.1 percent to 793 yen in
Tokyo after the robotics maker’s third-quarter operating profit
missed analyst estimates.

To contact the reporter on this story:
Kana Nishizawa in Hong Kong at
knishizawa5@bloomberg.net.

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