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.
PLA MANEUVERS: Although Beijing has yet to formally announce military drills, its coast guard vessels have been spotted near and around Taiwan since Friday The Taiwanese military is on high alert and is closely monitoring the Chinese People’s Liberation Army’s (PLA) air and naval deployments after Beijing yesterday reserved seven airspace areas east of its Zhejiang and Fujian provinces through Wednesday. Beijing’s action was perceived as a precursor to a potential third “Joint Sword” military exercise, which national security experts said the PLA could launch following President William Lai’s (賴清德) state visits to the nation’s three Pacific allies and stopovers in Hawaii and Guam last week. Unlike the Joint Sword military exercises in May and October, when Beijing provided detailed information about the affected areas, it
CHINA: The activities come amid speculation that Beijing might launch military exercises in response to Lai’s recent visit to Pacific allies The Ministry of National Defense (MND) yesterday said China had nearly doubled the number of its warships operating around the nation in the previous 24 hours, ahead of what security sources expect would be a new round of war games. China’s military activities come amid speculation Beijing might organize military drills around the nation in response to President William Lai’s (賴清德) recent visit to Pacific allies, including stops in Hawaii and Guam, a US territory. Lai returned from the week-long trip on Friday night. Beijing has held two rounds of war games around Taiwan this year, and sends ships and military planes
Five flights have been arranged to help nearly 2,000 Taiwanese tourists return home from Okinawa after being stranded due to cruise ship maintenance issues, the Ministry of Transportation and Communications announced yesterday. China Airlines Ltd (中華航空), and EVA Airways Corp (長榮航空) have arranged five flights with a total of 748 additional seats to transport 1,857 passengers from the MSC Bellissima back to Taiwan, the ministry said. The flights have been scheduled for yesterday and today by the Civil Aviation Administration, with the cruise operator covering all associated costs. The MSC Bellissima, carrying 4,341 passengers, departed from Keelung on Wednesday last week for Okinawa,
US president-elect Donald Trump said he would “never say” if Washington is committed to defending Taiwan from China, but “I would prefer that they do not do it [ an attack],” adding that he has a “good relationship” with Chinese President Xi Jinping (習近平). “I never say because I have to negotiate things, right?” Trump said in an interview with NBC’s Meet the Press host Kristen Welker after saying he would not reveal his incoming administration’s stance on Taiwan’s defense in the event of an attack. Asked the question again, Trump, in a reference to China, said: “I would prefer that they
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