Inside Financial Markets

Asian Stocks Fall From Six-Year High as Tech Firms Drop

asia 2Asian Stocks Fall From Six-Year High as Tech Firms Drop

Asian stocks fell, with the regional benchmark index declining from the highest level in six years as technology companies and shipbuilders retreated.

Aeon Co. sank 4.5 percent in Tokyo, one of the largest losses on the regional benchmark index, after profit in the first quarter plunged at the supermarket operator. Daewoo Shipbuilding & Marine Engineering Co. slid 4.6 percent in Seoul after a brokerage cut its estimate on the shares, citing slowing new orders. TPK Holding Co., the maker of computer screens, fell 4.7 percent in Taipei.

The MSCI Asia Pacific Index lost 0.2 percent to 147.29 as of 10:58 a.m. in Hong Kong, with all of its 10 industry groups falling. Futures on the Standard & Poor’s 500 Index slid 0.1 percent, with U.S. trading recommencing today after a holiday. International Monetary Fund Managing Director Christine Lagarde signaled a cut in the institution’s global growth forecasts, saying investment is still weak and that risks remain in the U.S. even as its rebound accelerates.

“Investors are in a wait-and-see mood,” after Lagarde’s comments, said Yutaka Miura, a senior technical analyst at Mizuho Securities Co. in Tokyo. “There’s a lack of catalysts to buy.”

Japan’s Topix index retreated 0.2 percent. Australia’s S&P/ASX 200 Index fell 0.2 percent, with trading volume about 35 percent lower than the average of the last month for the time of day. South Korea’s Kospi index declined 0.5 percent, while New Zealand’s NZX 50 Index dropped 0.2 percent.

Hong Kong

Hong Kong’s Hang Seng Index (HSI) slipped 0.2 percent with volume one third lower than average. The Shanghai Composite Index dropped 0.2 percent. Singapore’s Straits Times Index advanced less than 0.1 percent and Taiwan’s Taiex Index slid 0.4 percent.

Asian shares last week posted an eighth weekly gain, the longest winning streak since 2012. The S&P 500 closed at a record high and Japan’s Topix index climbed to its best close in five months. Hong Kong’s Hang Seng Index gained the most in a month last week amid signs that Chinese growth is stabilizing.

The MSCI Asia Pacific Index traded at 13.5 times estimated earnings at its last close compared with 16.2 for the MSCI World Index, according to data compiled by Bloomberg.

While Chinese manufacturing data this month showed growth is stabilizing in the world’s second-largest economy, the IMF says the global economy may grow at a slower pace than previously forecast.

Global Threats

“The global economy is gathering speed, though the pace may be a bit less than we previously predicted because the growth potential is lower and investment” spending remains lackluster, Lagarde told the Cercle des Economistes conference in Aix-en-Provence, France.

Her remarks underline the threats to global economic growth at a time when the U.S. Federal Reserve is trimming stimulus and the European Central Bank faces inflation that is less than half its targeted level. The IMF is preparing to update its economic forecasts this month after predicting April 8 that the global economy will expand 3.6 percent this year and 3.9 percent in 2015.

“I don’t see a global slowdown,” Mark Matthews, Singapore-based head of Asia research for Bank Julius Baer & Co., which oversees about $377 billion, said in a Bloomberg TV interview. “There are enough good stories here in Asia. Money should be looking to invest here.” Holdings Ltd surged 24 percent in Sydney after Expedia Inc., an online travel-booking service, agreed to buy the Australian travel agency for A$703 million ($658 million), seeking to expand its presence in the Asia-Pacific region.


Sanie Khan

Sanie Khan holds a deep knowledge of the financial markets in Pakistan. Based in Karachi, he has over 20 years of hands-on management experience in financial technologies and managing operations in the financial sector. He was the General Manager at the Pakistan Stock Exchange (PSX) for 17 years. He along-with senior members of Exchange

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Inside Financial Markets was a joint publication of Pakistan Stock Exchange (PSX)and Society of Technical Analysts Pakistan (STAP)