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Stocks: Monday’s review
Asian stocks declined, with the MSCI Asia Pacific Index posting its biggest drop in almost a month, as companies from Acer Inc. to Tohoku Electric Power Co. reported losses and China vowed to maintain property lending curbs.
Japan’s Nikkei 225 Stock Average fell 0.7 percent. The gauge earlier advanced as much as 1.1 percent after the Japanese government sold the yen to weaken the currency, which had gained to a post-World War II high against the dollar. A stronger yen cuts the value of overseas earnings for Japan’s exporters.Australia’s S&P/ASX 200 dropped 1.3 percent. South Korea’s Kospi Index fell 1.1 percent. Hong Kong’s Hang Seng Index declined 0.8 percent, while China’s Shanghai Composite slid 0.2 percent.
Acer, the world’s fourth-largest computer maker, fell 2 percent in Taipei. The company last week reported a third-quarter net loss of NT$1.1 billion ($37 million), its second straight loss, and said global shipments this quarter will fall as much as 10 percent amid a slowing computer market and a shortage of disk drives.
Tohoku Electric slumped 6.4 percent to 869 yen in Tokyo after reporting a wider-than-expected first-half net loss of 108.3 billion yen ($1.4 billion).
Japan’s biggest shipping lines declined after predicting losses amid falling cargo rates. Mitsui O.S.K. Lines Ltd., Japan’s second-biggest shipping company, declined 4.1 percent to 308 yen. Nippon Yusen K.K., the nation’s No. 1 shipping line, fell 2.4 percent to 201 yen.
China Railway Group Ltd., the country’s biggest builder of train lines, tumbled 14.1 percent to HK$2.63, the most in the MSCI Asia Pacific Index. The company said third-quarter profit dropped 49 percent from a year earlier to 1.14 billion yuan ($179 million) after a 15-fold jump in borrowing costs and a decline in new orders as the government halted new projects following rail accidents.
Chinese lenders and property developers retreated after Premier Wen Jiabao said China will “firmly” maintain its property curbs. Local authorities should continue to strictly implement the central government’s real estate policies in the coming months to let citizens see the results of the curbs, Wen said, according to a statement on Oct. 29 following a State Council meeting chaired by the premier.
ICBC, the world’s biggest lender by market value, dropped 1.6 percent to HK$4.94. Agricultural Bank of China Ltd., the nation’s largest lender by number of branches, sank 1.4 percent to HK$3.55 in Hong Kong. China Overseas Land & Investment, the No. 1 mainland developer listed in Hong Kong, slumped 5.7 percent to HK$14.66. China Resources Land Ltd., a state-owned developer, declined 5.4 percent to HK$11.54.
Among stocks that advanced, Qantas Airways Ltd. jumped 4.4 percent to A$1.6125 in Sydney. Flights resumed today after the government intervened in a union dispute that grounded the airline’s fleet two days ago, stranding 80,000 passengers and costing the company more than $100 million.
European stocks dropped, paring their biggest monthly gain since July 2009, as some investors remain reluctant to buy equities before the euro area’s leaders explain how they will fund their expanded bailout facility. The G-20 leaders convene on Nov. 3-4 in Cannes, France, a week after the euro area’s authorities pledged to magnify the capacity of their rescue fund to 1 trillion euros ($1.4 trillion). The euro area has already sought financial help from China and cooperation from the International Monetary Fund.
National benchmark indexes declined in all 18 western- European markets. The U.K.’s FTSE 100 Index slid 2.8 percent, while France’s CAC 40 Index and Germany’s DAX Index both retreated 3.2 percent.
Vestas slumped 24 percent to 84.35 kroner for its biggest slide since 2002. The wind-turbine maker predicted revenue of 6.4 billion euros in 2011, down from the 7 billion euros it had forecast in August. Vestas said its 2011 Ebit margin will decline to 4 percent. The company projected a margin of 7 percent in August. Vestas said further delays at the facility remain possible. Gamesa Corp. Tecnologica SA, the Spanish wind-turbine maker, plunged 9.6 percent to 3.52 euros.
Banks were among the worst performers of the 19 industry groups on the Stoxx 600. HSBC lost 3.6 percent to 544.9 pence. BNP Paribas SA sank 9.6 percent to 32.85 euros. UniCredit SpA slipped 5.7 percent to 84.8 euro cents as La Stampa reported that Italy’s largest bank plans to raise 6 billion euros to 8 billion euros. The newspaper didn’t say where it got the information.
Rio Tinto, the world’s second-biggest mining company, lost 6.5 percent to 3,385 pence. BHP Billiton Ltd., the world’s largest, declined 6.4 percent to 1,967.5 pence. Copper, nickel and tin prices slumped on the London Metals Exchange.
Homeserve Plc tumbled 28 percent to 350 pence for the biggest slump on the Stoxx 600 after the U.K.-based emergency- repair service provider suspended all telephone sales and marketing because a review showed sales processes didn’t meet standards.
TNT Express NV rallied 5 percent to 6.17 euros as Europe’s second-largest express-delivery service posted an unexpected third-quarter profit after increasing prices in Europe and Asia.
U.S. stocks slumped amid concern European leaders will struggle to raise funds to contain the region’s sovereign debt crisis. China can’t play the role of “savior,” the official Xinhua news agency said yesterday, as investors awaited the country’s response to Europe’s request for money to boost its bailout fund. Japanese Finance Minister Jun Azumi said today the government took unilateral steps to weaken the yen. Group of 20 leaders will gather Nov. 3-4 in Cannes, France, while central bankers from Australia, the U.S. and Europe will hold interest- rate policy meetings this week.
Stocks extended losses in the final hour of trading after Greek Prime Minister George Papandreou said he will put the European Union’s new agreement on financing for Greece to a referendum.
European stocks slumped, paced by losses in banks, as Italian and Spanish bonds declined. Morgan Stanley fell 8.7 percent to $17.64. Citigroup dropped 7.5 percent to $31.59.
MF Global Holdings Ltd., the holding company for the broker-dealer run by former New Jersey governor and Goldman Sachs Group Inc. co-chairman Jon Corzine, filed for bankruptcy after making bets on European sovereign debt.
Gauges of energy and raw material producers in the S&P 500 slumped at least 4.1 percent on concern about slower demand and as the dollar rallied, reducing the appeal of commodities as an alternative investment. Alcoa dropped 7 percent to $10.76. Chevron erased 4.2 percent to $105.05.
Yahoo! Inc. slumped 5.6 percent to $15.64 as it is said to be leaning toward selling Asian assets and redistributing proceeds to shareholders. The Asian asset sale is emerging as the most likely option for Yahoo and would let the company eventually pay a special dividend or buy back shares, according to five people familiar with the situation.
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