Asia Stocks Swing After U.S. Manufacturing Index Falls

The MSCI Asia Pacific Index fell

after the biggest rally in a month yesterday as data showed

slowing U.S. factory activity and investors weighed prospects of

recession in Russia.

The MSCI Asia Pacific Index fell less than 0.1 percent to

134.30 as of 7:32 p.m. in Tokyo after rising as much as 0.2

percent. The gauge rose 1.2 percent yesterday, the steepest

advance since Feb. 21. Banks warned Russia’s economy is at risk

as the world’s leading industrial powers threaten further

sanctions to deter it from invading other parts of Ukraine after

the annexation of Crimea.

The U.S. factory data “is a little bit weaker, but nothing

changed much,” said Donald Williams, Sydney-based chief

investment officer who helps manage about $1.6 billion at

Platypus Asset Management Ltd. in Sydney. “It’s a grinding

recovery and some of the data are better than expected and some

are worse.”

Cosco Pacific Ltd. and Yashili International Holdings Ltd.

slid after their earnings missed estimates. Sekisui House Ltd.

dropped 1 percent after saying it found defects in a Tokyo

residential complex being built by Taisei Corp. Tingyi (Cayman

Islands) Holding Corp. rose 2.2 percent in Hong Kong after UBS

AG upgraded the noodle maker.

Japan’s Topix index rose 0.1 percent, and South Korea’s

Kospi index slipped 0.2 percent. Australia’s SP/ASX 200 Index

fell 0.2 percent, while New Zealand’s NZX 50 Index gained 0.2

percent.

Regional Gauges

Hong Kong’s Hang Seng Index slid 0.5 percent, while the

Hang Seng China Enterprises Index of mainland shares traded in

the city was little changed after rising as much as 0.9 percent.

The Shanghai Composite Index gained less than 0.1 percent.

Taiwan’s Taiex index rose 1 percent, while Singapore’s Straits

Times Index fell 0.3 percent.

Futures on the Standard Poor’s 500 Index rose 0.2 percent

today after the equity gauge declined 0.5 percent yesterday. A

Markit Economics Ltd. preliminary index of U.S. manufacturing

fell to 55.5 in March from 57.1 a month earlier, the London-based group said yesterday. Analysts had expected a reading of

56.5. A level above 50 indicates expansion and this month’s

reading was the second-highest since January 2013.

China’s factory activity weakened a fifth straight month, a

preliminary Purchasing Managers’ Index from HSBC Holdings Plc

and Markit showed yesterday. Signs of faltering manufacturing in

the world’s two biggest economies come as U.S. policy makers

rein in stimulus and as Chinese lawmakers pledge to maintain

growth while curbing shadow banking and credit expansion.

Economic Sanctions

Sanctions imposed by the U.S. and the European Union are

pushing Russia toward a recession as the intensity of their

economic penalties increases after the annexation of Crimea

earlier this month.

Banks including state-run VTB Capital say the world’s

ninth-biggest economy will shrink for at least two quarters as

penalties for annexing Crimea rattle markets, curb investment

and raise borrowing costs. Sanctions that have so far focused on

individuals with visa bans and asset freezes may be expanded to

target specific areas of the economy.

The Group of Seven major powers decided to hold a summit in

Brussels in June instead of a planned G-8 meeting in Sochi in

the latest sanction against Russia. U.S. President Barack Obama

and his fellow G-7 leaders met in The Hague to agree on the next

steps in the crisis, amid growing concern that Russia is

building up its forces on the border with Ukraine.

Buying Opportunity

“Military skirmishes, even though major powers are

involved in this particular case, they tend to be relatively

short-lived events,” said Williams at Platypus Asset

Management. “Even if it escalates and markets correct more

significantly, that will just be a buying opportunity.”

Cosco Pacific lost 2.4 percent to HK$9.96 after reporting

full-year net income of $702.7 million, below analysts’ estimate

of $710.7 million.

Yashili plunged 10 percent to HK$3.66 after reporting full-year profit of 437.6 million yuan ($71 million), compared with

analyst projections for 520 million yuan.

Tingyi rose 2.2 percent to HK$20.80 after UBS recommended

the stock. The company’s high-end steamed noodles with improved

ingredients will be a major breakthrough for the industry and

the company, analyst Christine Peng wrote in a note.

Sekisui House fell 1 percent to 1,197 yen. The home builder

last month found about 20 out of 34 posts were missing some

reinforcing metals in the building, which will be 30 stories,

Keiji Kobayashi, a Tokyo-based spokesman at Sekisui, said in a

phone interview yesterday. Taisei is fixing the defects at the

project sold by Sekisui, he said. Taisei slid 2.9 percent to 441

yen.

Tongda Group Holdings Ltd., a maker of casings for notebook

computers, slumped 9.5 percent to HK$1.15 in Hong Kong after

selling 600 million new shares.

The Asia-Pacific gauge traded at 12.6 times estimated

earnings, compared with 15.8 for the SP 500 and 14.3 for the

Stoxx Europe 600 Index, according to data compiled by Bloomberg.

To contact the reporter on this story:

Yoshiaki Nohara in Tokyo at

ynohara1@bloomberg.net

To contact the editors responsible for this story:

Sarah McDonald at

smcdonald23@bloomberg.net

Tom Redmond, Jim Powell

Asia Stocks Swing After U.S. Manufacturing Index Falls