Asian shares hit hard by Fed comment on slowing growth

Tokyo: Most Asian stocks fell as US Federal Reserve comments that growth slowed in some areas of the economy overshadowed signs of increased corporate earnings.

Samsung Electronics Co., which gets a fifth of its revenue in America, sank 1.2 per cent in Seoul.

Panasonic Corp. slumped 7.7 per cent in Tokyo on speculation the company will sell stock to buy out two units.

Taiwanese handset maker HTC Corp. climbed 6.9 per cent after Citigroup Inc. raised its share-price estimate.

Nippon Yusen K.K., Japan's largest shipping line by sales, jumped 5 per cent after almost doubling its forecast for profit.

About five stocks fell for every four that rose on the MSCI Asia Pacific Index, which gained 0.2 per cent to 119.65 as of 5:48pm in Tokyo.

The gauge has slumped 7.4 per cent from its high this year on April 15 on concern Europe's debt crisis and Chinese steps to curb property prices will slow global growth.

"The economic outlook is unclear and we don't know how long this will continue," said Kiyoshi Ishigane, a strategist in Tokyo at Mitsubishi UFJ Asset Management Co., which oversees about $65 billion (Dh238.7 billion).

Nikkei

Japan's Nikkei 225 Stock Average fell 0.6 per cent and Hong Kong's Hang Seng Index was little changed. Australia's S&P/ASX 200 Index slipped 0.1 per cent, while South Korea's Kospi Index slid 0.2 per cent. China's Shanghai Composite Index gained 0.6 per cent after the central bank said it will maintain a "moderately loose" monetary policy.

Futures on the US Standard & Poor's 500 gained 0.6 per cent. The gauge slipped 0.7 per cent Wednesday in New York after the Fed said US economic growth slowed in some areas in the past two months, dragged down by commercial real estate and the expiration of a tax credit for homebuyers.

Samsung Electronics fell 1.2 per cent to 827,000 won in Seoul. James Hardie Industries SE, the biggest seller of home siding in the US, lost 1.5 per cent to A$6.56 in Sydney. Nintendo Co., the world's biggest maker of portable video-game players, lost 1.5 per cent to 24,620 yen in Osaka, Japan. "Economic activity has continued to increase, on balance, since the previous survey," the Fed said in its Beige Book business survey, while noting that two of the Fed's 12 districts reported the economy "held steady" and two said the expansion slowed.

Panasonic, Japan's largest home-appliance maker, plunged 7.7 per cent to 1,077 yen in Tokyo, the second-biggest drop in the MSCI Asia Pacific Index yesterday.

Economic data from the US this month have fuelled concerns the world's biggest economy is stalling. Sales at US retailers declined in June for a second month, the Commerce Department reported on July 14.

India leads the way

Asian currencies strengthened, led by India's rupee and the Philippine peso, on speculation inflows will climb as regional economies lead a global recovery.

The Bloomberg-JPMorgan Asia Dollar Index rose to a five- week high and the MSCI Asia Pacific Index of shares was headed for its best close in more than two months, after earlier losses. Singapore's gross domestic product increased a record 18 per cent in the first half of 2010 and the city-state's central bank today forecast "high levels" of economic activity for the rest of the year. Global funds have pumped about $7 billion (Dh25.7 billion) into stock markets in India, South Korea and Taiwan this month alone.

"The recovery in stock markets makes people less risk averse, making it easier to buy emerging-market currencies," said Dariusz Kowalczyk, a Hong Kong-based senior economist and strategist at Credit Agricole CIB. "The solid growth in the region supports Asian currencies."

The rupee appreciated 0.3 per cent to 46.623 per dollar as of 2:31pm. in Mumbai, according to data compiled by Bloomberg. The peso gained 0.3 per cent to 45.713 and the Singapore dollar strengthened 0.2 per cent to S$1.3633. Indonesia's rupiah advanced 0.3 per cent to a three-year high of 8,980.