Asian stocks fell, with the benchmark regional index headed for its biggest decline in two weeks, as mining companies and exporters dropped after the U.S. jobs market stalled in August, fueling concern the world’s largest economy may be headed for a recession.
Samsung Electronics Co., a South Korean exporter of consumer electronics that gets 22 percent of its revenue from America, sank 4.9 percent in Seoul. Toyota Motor Corp. (7203), the world’s biggest carmaker by market value, declined 2.6 percent in Tokyo. Clothier Fast Retailing Co. sank 1.7 percent after reporting sales fell at its Uniqlo stores. BHP Billiton Ltd. (BHP), the world’s largest mining company and Australia’s No. 1 oil producer, retreated 2.1 percent after crude and metal prices slipped.
The MSCI Asia Pacific Index dropped 2.6 percent to 120.88 as of 7:38 p.m. in Tokyo, headed for its biggest drop since Aug. 19. Almost six stocks fell for each that rose on the gauge. The measure slumped 8.6 percent last month, the most since May 2010, amid concern global economic growth is slowing as Europe’s sovereign debt crisis spreads and after Standard & Poor’s cut the U.S. credit rating.
“It was a scary report,” Dan North, chief U.S. economist at Euler Hermes ACI in Owings Mills, Maryland, said of the U.S. jobs data in an interview from Singapore with Susan Li on Bloomberg Television. “When you get to negative job growth, which we’re very close to now, it means you’re already in a recession.”
Nikkei, Kospi
Japan’s Nikkei 225 Stock Average decreased 1.9 percent. Australia’s S&P/ASX 200 Index fell 2.4 percent. South Korea’s Kospi Index lost 4.4 percent, the biggest drop among regional benchmark indexes. Hong Kong’s Hang Seng Index slumped 3 percent, while the Shanghai Composite Index slipped 2 percent.
Futures on the Standard & Poor’s 500 Index declined 1.2 percent today. In New York, the index fell 2.5 percent to 1,173.97 on Sept. 2 after a report showed U.S. payrolls were unchanged in August, the weakest reading since September 2010. The median forecast in a Bloomberg News survey called for an increase of 68,000. U.S. markets will be closed today for a public holiday.
“Softer U.S. growth translates into weaker demand for Asian exports, where there is already evidence of a downturn,” said Angus Gluskie, who manages more than $300 million at White Funds Management in Sydney. “More importantly, if the U.S. economy stagnates, we’ll see a resurgence of concerns over sovereign solvency, which could be destabilizing for credit markets worldwide.”
Exporters Fall
Toyota, which receives 24 percent of its revenue from the U.S. and Canada, slipped 2.6 percent to 2,640 yen in Tokyo. Honda Motor Co., the automaker that counts North America as its biggest market for sales, slumped 4.7 percent to 2,389 yen.
Samsung Electronics fell 4.9 percent to 731,000 won in Seoul. Samsung also fell after the company lost a chance to showcase its latest tablet computer at one of the world’s largest electronics shows after Apple Inc. won a second injunction blocking Galaxy Tab sales in Germany.
Japanese exporters also dropped as the euro fell against the yen after an election loss for German Chancellor Angela Merkel’s party in her home state added to concern opposition is growing to bailouts for debt-saddled European nations.
The yen touched 108.66 per euro today, the strongest level since Jan. 11, before trading at 108.74. A stronger yen hurts Japanese exporters because it reduces the value of overseas income when repatriated.
‘Negative Surprise’
“People didn’t expect an increase in U.S. jobs would come to a halt, which was a negative surprise,” said Toshiyuki Kanayama, a market analyst at Tokyo-based Monex Inc. “Export- related stocks are likely to be sold as the yen rises against the euro.”
Canon Inc., the world’s biggest camera maker which counts Europe as its biggest market for sales, slid 2.5 percent to 3,505 yen. Nintendo Co., a games maker that also counts Europe as its largest market, lost 1.5 percent to 12,970 yen.
Also in Tokyo, Fast Retailing declined 1.7 percent to 13,900 yen, the third-biggest drag on Japan’s Nikkei 225. (NKY) The store operator said same-store sales at its Uniqlo clothing chain declined 9.4 percent in August.
The MSCI Asia Pacific Index declined 9.8 percent this year through Sept. 2, compared with a 6.7 percent drop by the S&P 500 and a 15.5 percent loss by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 12.2 times estimated earnings on average, compared with 11.7 times for the S&P 500 and 9.7 times for the Stoxx 600.
Mining Stocks Drop
Asian raw material and energy producers posted the biggest drop among the 10 industry groups on the MSCI Asia Pacific Index today, declining at least 4 percent.
BHP slumped 2.1 percent to A$37.70, the biggest drag on the MSCI Asia Pacific Index. Rio Tinto Group, the world’s second- largest mining company by sales, declined 3.1 percent to A$69.79. Woodside Petroleum Ltd., Australia’s No. 2 oil and gas producer, declined 3.1 percent to A$33.85. Inpex Corp., Japan’s No. 1 energy explorer, lost 5.6 percent to 480,500 yen.
Cnooc Ltd. (883) tumbled 9 percent to HK$13.84 in Hong Kong, after saying a production halt at Penglai 19-3 oilfield in China will further reduce its net output.
Metal Prices
Commodity shares declined after the London Metal Exchange Index of prices for six industrial metals including copper and aluminum fell 1 percent on Sept. 2. Oil for October delivery slipped as much as 0.6 percent on the New York Mercantile Exchange. The contract dropped 2.8 percent to $86.45 on Sept. 2 after the U.S. jobs report. There will be no Nymex floor trading today because of the Labor Day holiday.
“The U.S. jobs data was weak across the board and shows that companies have little confidence to hire,” said Belinda Allen, senior analyst of investment markets research at Colonial First State Global Asset Management in Sydney, which oversees about $150 billion. “What this does, however, is bring the Federal Reserve closer to taking action. If that happens, it could help equities in Asia and asset prices generally.”
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