Asia Stocks Decline; Canon, Metals Shares Fall
Asian stocks fell Thursday in the wake of an overnight decline in stocks and commodities, with shares of Canon Inc. and Sands China Ltd. sliding after the companies reported earnings.
Japan’s Nikkei Stock Average dropped 1.1%, South Korea’s Kospi slipped 0.1% and Australia’s S&P/ASX 200 ended little changed.
China’s Shanghai Composite fell 0.6% and Hong Kong’s Hang Seng Index retreated 0.3%. Their drop came even as Beijing unveiled new stimulus measures late on Wednesday, including tax cuts for small businesses and increased investments in railways.
“The package is quite small in size and mainly aimed at underpinning the economy through supply-side measures. China isn’t aiming to boost growth, but simply to stabilize it in order to meet their 7.5% target for growth this year,” said Allan von Mehren, chief analyst at Danske Bank.
Bank of America Merrill Lynch’s China economist Ting Lu said the measures announced Wednesday would have “limited direct impact” on the economy in the near-term, but would help boost confidence by conveying to markets that the current leadership “is caring about growth by introducing sensible measures.”
Among the day’s notable stock decliners, Canon Inc. tumbled 5.4% after it cut its outlook for the full fiscal year, despite posting forecast-beating profit for the second quarter.
Shares of rival camera maker Nikon Corp. skidded 4.7%.
Weak earnings from U.S. construction-equipment maker Caterpillar Inc.
weighed on its Japanese peers. Komatsu Ltd. lost 2.4%, and Hitachi Construction Machinery Co. shed 2.3%.
Weakness in metal-and-mining stocks was a common theme in multiple regional markets, after Comex gold futures fell 1.1% overnight in the U.S. following sharp recent gains, while copper futures lost 0.6%.
Gold producer Zijin Mining Group Co. retreated 2.8% in Hong Kong and 1.2% in Shanghai, Korea Zinc Co. lost 0.9% in Seoul, and Sumitomo Metal Mining Co. shed 2.4% in Tokyo.
Shares of Newcrest Mining Ltd. slid 1.3% in Sydney after the company said its quarterly gold and copper output rose 25% and 20%, respectively, although it projected lower production in the current quarter.
Shares of companies connected to Chinese railways rallied to outperform the broader markets on the government’s plans to boost investment.
China Railway Construction Corp. climbed 2.5% and CSR Corp. added 2.4% in Hong Kong; in Shanghai, the stocks rose 2.9% and 3.1%, respectively.
Sands China Ltd. dropped 2% in Hong Kong despite reporting a 40% rise in second-quarter revenue and a more than tripling in profit, paring some of its weekly gains. At Thursday’s close, the stock is still up 3.8% this week.
Shares of the world’s No. 2 chip maker SK Hynix Inc. rose 0.2% in Seoul after its second-quarter operating profit hit a record high, beating forecasts.
STX Offshore & Shipbuilding Co. shot 15% higher after Reuters reported its creditors were nearing a decision inject additional capital.
Source : Marketwatch
