Asian stocks reverse gain as utilities drop; HSBC shares climb

Investors look at stock prices at a securities exchange in Shanghai on June 13, 2013. — AFP picSINGAPORE, Nov 5 — Asian stocks reversed gains as utilities and consumer discretionary companies declined, offsetting a gain in profit at HSBC Holdings Plc and earnings that topped estimates at Kubota Corp.

Nissan Motor Co. slumped 9.8 per cent, the most in five years, after the Japanese carmaker cut its profit forecast. Kubota surged 6.6 per cent in Tokyo as the industrial-machinery maker reported profit that topped analyst estimates. Mitsubishi Electric Corp. gained 1.2 per cent as the Japanese manufacturer boosted its earnings forecast. HSBC advanced 1.5 per cent in Hong Kong after Europe’s largest bank said third-quarter pretax profit rose 30 per cent.

The MSCI Asia Pacific Index lost 0.1 per cent to 141.04 as of 10:52am in Tokyo. About four stocks fell for every three that rose. Futures on the Standard Poor’s 500 Index retreated 0.1 per cent. Malaysian and Indonesian markets are closed.

Australia’s SP/ASX 200 Index added 0.7 per cent as investors await the Reserve Bank of Australia’s decision on interest rates. All 31 economists surveyed by Bloomberg News say the central bank will hold its cash rate target unchanged, with 13 forecasting an increase by the fourth quarter of next year.

Japan’s Topix index slid 0.2 per cent as markets reopened after a holiday. More than 500 companies on the 1,746-member Topix report results this week, according to data compiled by Bloomberg.

China stocks

Of the companies on the MSCI Asia Pacific Index that have reported quarterly results this season and for which Bloomberg compiles estimates, half have exceeded analysts’ estimates on profit, while 53 per cent posted better-than-expected revenue.

Hong Kong’s Hang Seng Index lost 0.8 per cent and China’s Shanghai Composite retreated 1.1 per cent. Singapore’s Straits Times Index climbed 0.1 per cent and Taiwan’s Taiex Index declined 0.3 per cent. New Zealand’s NZX 50 Index advanced 0.4 per cent, heading for a record closing high. South Korea’s Kospi index slid 0.4 per cent.

The euro rebounded from a six-week low versus the dollar yesterday as expanding manufacturing in the euro region fueled speculation the European Central Bank won’t cut interest rates this week. A HSBC and Markit Economics China services index released today rose in October, after an official non-manufacturing gauge rose to the highest level this year. In the US, the Institute for Supply Management also issues its non- manufacturing index.

Beijing meeting

China’s top party officials will meet in Beijing November 9-12 to map out a blueprint for reform as the country heads for its slowest growth in more than two decades.

“All eyes are on the third party plenum this weekend,” Tim Moe, a Hong Kong-based strategist at Goldman Sachs Group Inc. told Bloomberg TV. “The market has priced in a fair amount of expectation about this and therefore from a tactical standpoint, the market is vulnerable to profit taking.”

The MSCI Asia Pacific Index climbed the past two months, pushing valuations on the measure to 13.6 times estimated earnings as of yesterday, up from a multiple of 12.7 at the end of August, according to data compiled by Bloomberg. That compares with a current multiple of 16 for the SP 500 and 14.9 on the Stoxx Europe 600 Index, the data show.

The SP 500 gained 0.4 per cent yesterday as Exxon Mobil Corp. and US Steel Corp. led a commodity rally while investors awaited data on employment and economic growth. The SP 500 has advanced 24 per cent in 2013, poised for its best yearly rally in a decade, and is up more than 161 per cent from the bear-market low reached in 2009. — Bloomberg

Asian stocks reverse gain as utilities drop; HSBC shares climb