Tightening China
Source:
Businessweek
Asian stocks fell for a fifth day, dragging the MSCI Asia Pacific Index to its biggest weekly drop since June, amid concern China will take more steps to curb price increases in an economy that has led the global recovery. Jiangxi Copper Co. and Aluminum Corp. of China Ltd. slumped more than 1 percent in Hong Kong after they were downgraded by Goldman Sachs Group Inc., which cited increasing risks from inflation. BHP Billiton Ltd., the world’s largest mining company, sank 2.3 percent on speculation Australia will raise taxes on resource projects. Toyota Motor Corp., which gets 32 percent of revenue in North America, fell 3.2 percent after the yen rose to a one-month high versus the dollar.
The MSCI Asia Pacific Index fell 1.3 percent to 122.27 as of 5:04 p.m. in Tokyo. The gauge has slumped 3.5 percent in the past five days, the most since the week ended June 19. China said yesterday that fourth-quarter gross domestic product grew 10.7 percent from a year ago, while the World Bank said developing Asian economies face the risk of asset bubbles.
“There are some worries about the extent of tightening in China,” said Shane Oliver, head of investment strategy in Sydney at AMP Capital Investors, which oversees about $90 billion globally. “I don’t think they’re seeking to crunch their economy, but obviously the market worries that that will be the case.”
China’s Shanghai Composite Index dropped 1 percent and Hong Kong’s Hang Seng Index sank 0.7 percent. Japan’s Nikkei 225 Stock Average lost 2.6 percent, paring its advance this year to 0.4 percent. Aust
ralia’s S&P/ASX 200 Index fell 1.6 percent, the most in almost two months.
Stricter Regulations?
Futures on the Standard & Poor’s 500 Index rose 0.1 percent. The gauge slid 1.9 percent yesterday as the U.S. government proposed to reduce risk-taking at banks, raising concern stricter regulations will damage banks’ profitability.
Jiangxi Copper, China’s biggest producer of the metal, lost 1.4 percent to HK$16.98 after falling as much as 5.1 percent earlier. Aluminum Corp., also known as Chalco, sank 2.7 percent to HK$8.82. The two stocks were lowered to “sell” from “neutral” by Goldman Sachs.