Asian stocks dropped, snapping three weeks of gains, on concern China will curb lending to avert a bubble in equities and after Nikon Corp and DBS Group Holdings Ltd reported declining earnings.
China’s Shanghai Composite Index fell the most since February. Nikon, Japan’s biggest maker of steppers used in microchip production, slumped 12 percent after forecasting a record loss. DBS, Southeast Asia’s biggest bank, sank 7.5 percent in Singapore as provisions for bad loans surged.
HSBC Holdings PLC, Europe’s biggest bank, climbed 8.7 percent in Hong Kong on better-than-estimated profit.
The MSCI Asia-Pacific Index declined 1 percent to 110.74 this week, with about twice as many stocks retreating as gaining. The gauge has climbed 57 percent from its March 9 five-year low on speculation a recovering global economy will boost earnings. Japan’s Nikkei 225 Stock Average added 0.5 percent to a 10-month high, and most Asian benchmark indexes advanced.
“I’m a bit more cautious, as valuations have run ahead of fundamentals following the recent rally,” said Ivan Tham, Singapore-based head of fund management at state-backed Kuwait Finance House, which has about US$24 billion in assets. “There are early indications that the economy is bottoming out.”
Better-than-estimated earnings and economic reports worldwide have driven stocks higher since March, lifting the average valuation of companies on the MSCI Asia-Pacific Index to 24 times estimated profit as of yesterday, near this year’s high of 26 reached in March.
Data this week showed Australian employers unexpectedly added jobs and pointed to improving manufacturing industries in China, Europe and the US.
The Shanghai Composite sank 4.4 percent as the People’s Bank of China said in a quarterly report released on Thursday that it would fine-tune monetary policy, sparking concern the central bank will rein in lending to avert bubbles in equities and property.
Taiwanese share prices are seen consolidating in the week ahead as investors remain cautious over negative economic data, analysts said..
For the week to Thursday, the weighted index fell 209.06 points, or 2.95 percent, to 6,868.65 after a 1.50 percent increase a week earlier. Average daily turnover stood at NT$138.87 billion (US$4.23 billion), compared with NT$146.38 billion a week ago.
Taiwan’s financial markets were closed on Friday as Typhoon Marakot hit. Trading will resume tomorrow.
“The sentiment is cautious as July consumer prices fell steepest in nearly 39 years ... which showed a lackluster consumption willingness,” said the Chinese-language Liberty Times (the Taipei Times’ sister newspaper).
The Taipei bourse is expected to consolidate in the near term although companies with a positive earning outlook are likely to stage a rebound, the paper said.
Taiwan’s consumer price last month fell for the sixth consecutive month by 2.33 percent year-on-year, while June unemployment hit a record high of 5.94 percent, the government said.
Super Typhoon Kong-rey is the largest cyclone to impact Taiwan in 27 years, the Central Weather Administration (CWA) said today. Kong-rey’s radius of maximum wind (RMW) — the distance between the center of a cyclone and its band of strongest winds — has expanded to 320km, CWA forecaster Chang Chun-yao (張竣堯) said. The last time a typhoon of comparable strength with an RMW larger than 300km made landfall in Taiwan was Typhoon Herb in 1996, he said. Herb made landfall between Keelung and Suao (蘇澳) in Yilan County with an RMW of 350km, Chang said. The weather station in Alishan (阿里山) recorded 1.09m of
NO WORK, CLASS: President William Lai urged people in the eastern, southern and northern parts of the country to be on alert, with Typhoon Kong-rey approaching Typhoon Kong-rey is expected to make landfall on Taiwan’s east coast today, with work and classes canceled nationwide. Packing gusts of nearly 300kph, the storm yesterday intensified into a typhoon and was expected to gain even more strength before hitting Taitung County, the US Navy’s Joint Typhoon Warning Center said. The storm is forecast to cross Taiwan’s south, enter the Taiwan Strait and head toward China, the Central Weather Administration (CWA) said. The CWA labeled the storm a “strong typhoon,” the most powerful on its scale. Up to 1.2m of rainfall was expected in mountainous areas of eastern Taiwan and destructive winds are likely
The Central Weather Administration (CWA) yesterday at 5:30pm issued a sea warning for Typhoon Kong-rey as the storm drew closer to the east coast. As of 8pm yesterday, the storm was 670km southeast of Oluanpi (鵝鑾鼻) and traveling northwest at 12kph to 16kph. It was packing maximum sustained winds of 162kph and gusts of up to 198kph, the CWA said. A land warning might be issued this morning for the storm, which is expected to have the strongest impact on Taiwan from tonight to early Friday morning, the agency said. Orchid Island (Lanyu, 蘭嶼) and Green Island (綠島) canceled classes and work
KONG-REY: A woman was killed in a vehicle hit by a tree, while 205 people were injured as the storm moved across the nation and entered the Taiwan Strait Typhoon Kong-rey slammed into Taiwan yesterday as one of the biggest storms to hit the nation in decades, whipping up 10m waves, triggering floods and claiming at least one life. Kong-rey made landfall in Taitung County’s Chenggong Township (成功) at 1:40pm, the Central Weather Administration (CWA) said. The typhoon — the first in Taiwan’s history to make landfall after mid-October — was moving north-northwest at 21kph when it hit land, CWA data showed. The fast-moving storm was packing maximum sustained winds of 184kph, with gusts of up to 227kph, CWA data showed. It was the same strength as Typhoon Gaemi, which was the most
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