Tokyo: Asian stocks fell, snapping four weeks of gains for the MSCI Asia Pacific Index, after JPMorgan reported a loss in retail banking and US consumer confidence trailed forecasts.
Nissan, which gets about 35 per cent of its sales from North America, slumped 2.6 per cent. Lender HSBC, which generates a fifth of its revenue in North America, fell 1.6 per cent in Hong Kong. China Mobile declined 2.5 per cent in Hong Kong, leading declines by telecommunications stocks on concern recent gains had overvalued earnings prospects.
"There's a bit of nervousness around US reporting season at the moment," said Tim Schroeders, who helps manage $1.1 billion (Dh4.04 billion) at Pengana Capital in Melbourne. "The rapid appreciation of share prices over the past 12 months means investors are right to question the rate of growth and the rate of future growth."
The MSCI Asia Pacific Index dropped 0.5 per cent to 126.09 at 5.42pm in Tokyo. The gauge has climbed 48 per cent in the past year as central banks cut borrowing costs and governments boosted spending to drag their economies out of recession. Shares on the index are priced at an average 1.65 times book value, the highest level since September 2008.
Nikkei slump
The Nikkei 225 Stock Average slumped 1.2 per cent in Japan, where the central bank said it will persist with an easy monetary policy to sustain an economic recovery. Hong Kong's Hang Seng Index lost 0.9 per cent.
Australia's S&P/ASX 200 Index added 0.2 per cent, led by IOOF Holdings, which surged 7.1 per cent amid takeover speculation. Sims Metal Management, the world's biggest recycler of scrap metal, slumped 4.5 per cent in Sydney after it was downgraded by JPMorgan.Futures on the S&P 500 added 0.1 per cent. The gauge slid 1.1 per cent on Jan. 15 after JPMorgan reported its fourth-quarter results and as the Reuters/University of Michigan preliminary index of consumer sentiment for January missed the median economist estimate.
Nissan dropped 2.6 per cent to 780 yen, while Honda, Japan's second-largest automaker which receives 42 per cent of its sales from North America, fell 0.9 per cent to 3,370 yen.
"Wages and the job market have yet to recover," said Mitsushige Akino, who oversees about $450 million in assets in Tokyo at Ichiyoshi Investment Management Company. "With weak consumer spending, a full-scale recovery in the US economy won't happen soon. Instead, workers will face tougher situations as companies continue restructuring."
HSBC fell 1.6 per cent to HK$89.25. Mitsubishi UFJ Financial Group, Japan's biggest bank by market value, lost 1.6 per cent to 498 yen in Tokyo.
JPMorgan, the largest US bank by market value, reported fourth-quarter net income that beat analyst estimates, though said it was "cautious" about the outlook for consumer loan defaults. Its retail unit posted the first quarterly loss since the first three months of 2008.
JPMorgan is the first of the largest US banks to report its earnings.
