WELLINGTON/HONG KONG — Asian stocks fell with US share-index futures, extending the biggest quarterly drop in global equities for more than two years, while the dollar climbed to a six-year high versus the yen.
Crude oil rebounded following its steepest one-day loss in 22 months as platinum slid.
The MSCI Asia Pacific Index lost 0.3% by 11.24am in Tokyo, following the steepest quarterly retreat in the gauge since 2012. Standard & Poor’s 500 Index futures declined 0.2%. The Bloomberg Dollar Spot Index rose a ninth day, building on its best quarter in six years, as the greenback bought more than 110 yen for the first time since August 2008. Australia’s dollar slumped after weaker-than-estimated retail-sales data. Oil in New York added 0.3%, while platinum sank 1.2% to a five-year low.
Speculation that US interest rates may rise sooner than anticipated, along with slowing growth in China and rising geopolitical tensions, saw investors abandoning stocks for the relative safety of sovereign bonds and the dollar. Thousands of pro-democracy demonstrators blocked roads in Hong Kong at the start of a national holidays. An official gauge of Chinese manufacturing was unchanged in September from August.
“The macro background is that we have pretty full valuations, so the market is incredibly susceptible to risk and there is less upside potential,” Ric Spooner, chief market analyst at CMC Markets in Sydney, said by phone today.
“Concerns about China are a significant factor. Downward momentum in some sectors of the Chinese economy now seems pretty plain to see,” he said before the index’s release.
Manufacturing PMIs
More than $1 trillion was erased from the value of global equities in the three months through Sept 30. The MSCI All Country World Index retreated 2.8% in the period, the most since the quarter ended June 30, 2012.
South Korea’s Kospi index dropped 0.6% today, while the Topix index in Tokyo was little changed after sliding as much as 0.5%. The MSCI Asia Pacific Index is down 1.1% for the year, with its value being further undermined as currencies across the region slide versus the dollar.
The yen fell to 110.09 per dollar, the weakest since Aug. 25, 2008. South Korea’s won slumped 0.8% to 1,063.65, heading for a six-month low. The yield on the 2.75% notes due June 2017 declined six basis points, or 0.06 percentage points, to a record low 2.25% amid speculation the central bank will cut rates to boost growth.
Australia’s dollar weakened 0.8% to 86.77 US cents. Retail sales expanded 0.1% in August from a month before, below the 0.4% median forecast of economists surveyed by Bloomberg.
China PMI
The China manufacturing purchasing managers’ index was projected to come in at 51, according to a Bloomberg survey of economists. A HSBC Holdings Plc/ Markit Economics factory gauge out yesterday dropped to 50.2, from an initial reading of 50.5 released last week. The figure was unchanged from August with levels above 50 signalling expansion.
Property restrictions in China were eased for the first time since the global financial crisis yesterday. People applying for a loan to buy a second home allowed lower down payments and mortgage rates that were previously only available to first-time home buyers as long as they’ve paid off their initial mortgage, the People’s Bank of China said on its website. The moves come amid concern China’s economy won’t meet the government’s 2014 growth target of about 7.5%.