Asian stocks fell for the first week in four as China boosted steps to cool property prices, Greek debt worries resurfaced and a US suit against Goldman Sachs Group Inc raised concern bank regulation will increase.
China Vanke Co (萬科), the nation’s biggest publicly traded developer, sank 12 percent in Shenzhen. HSBC Holdings PLC, Europe’s biggest bank, lost 4.1 percent in Hong Kong as British Prime Minister Gordon Brown called for an inquiry into Goldman Sachs. BHP Billiton Ltd, the world’s biggest mining company, declined 3.6 percent in Sydney as oil and metal prices slumped. CSL Ltd, the world’s No. 2 maker of blood-plasma products, plunged 8.4 percent after a rival cut its earnings forecast.
“The policy tightening in China will continue amid growing concerns about asset bubbles,” said Daphne Roth, Singapore-based head of Asian equity research at ABN Amro Private Banking. “While economic recovery is gaining momentum and earnings have been surprising on the upside, regulatory headwinds are increasing.”
The MSCI Asia Pacific Index fell 2.3 percent to 125.31 this week as the EU said Greece’s budget deficit last year was worse than forecast. The gauge climbed in each of the previous three weeks as better-than-estimated earnings and economic data fueled confidence in the global recovery.
Japan’s Nikkei 225 Stock Average lost 1.7 percent this week, while Australia’s S&P/ASX 200 Index slipped 2.1 percent. Hong Kong’s Hang Seng Index sank 2.8 percent and China’s Shanghai Composite Index retreated 5 percent.
HSBC, which made 20 percent of its revenue in North America last year, sank 4.1 percent to HK$81.10 in Hong Kong. In Sydney, Westpac Banking Corp, Australia’s second-biggest lender, lost 3.1 percent to A$27.30. Mitsubishi UFJ Financial Group Inc, Japan’s largest bank by market value, declined 2.5 percent to ¥501 in Tokyo.
Goldman Sachs, the most-profitable Wall Street firm in history, was facing a regulatory probe in Britain and scrutiny from the German government after the US Securities and Exchange Commission sued the company for alleged fraud tied to collateralized debt obligations.
“The Goldman inquiries have triggered a fresh wave of anxiety for investors,” said Nader Naeimi, a strategist at AMP Capital Investors Ltd who helps oversee US$90 billion for the Sydney-based mutual-funds manager. “Not only is the market worried who might be next, it’s anticipating tighter regulation of the banking sector.”
Asian stocks also fell this week as the euro area’s widening deficit raised concern the global economic recovery will falter. The EU said April 22 that Greece’s budget deficit last year was worse than previously forecast, and Moody’s Investors Service cut the country’s creditworthiness.
“Investors are jittery about huge budget shortfalls, which are deterring governments from offering further stimulus,” said Juichi Wako, a strategist at Tokyo-based Nomura Holdings Inc.
Healthcare-related companies and materials posted the biggest declines on the MSCI Asia Pacific Index this week.
BHP, Australia’s biggest oil company, declined 3.6 percent to A$41.97 in Sydney, while Cnooc Ltd (中國海洋石油), China’s largest offshore energy explorer, retreated 3 percent to HK$13.58 in Hong Kong.
In Sydney, CSL slumped 8.4 percent to A$33.94 after rival Baxter International Inc. lowered its earnings forecast for this year on costs from the US health-care overhaul.
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