By Jonathan Burgos
Jan. 11 (Bloomberg) -- Asian stocks fell, sending the MSCI Asia Pacific Index to an almost two-week intraday low, on concern Europe?s sovereign debt crisis will worsen and central banks from China to India will raise interest rates to curb inflation.
Alumina Ltd. declined 4.3 percent in Sydney after its partner Alcoa Inc. reported sales that missed estimates. Canon Inc., the world?s largest camera maker, declined 1.3 percent in Tokyo as the yen rose against the dollar, reducing the outlook for export earnings. Samsung Electronics Co., which gets about 22 percent of sales from Europe, lost 0.6 percent in Seoul as the cost to insure the debt of Portugal and Ireland against default increased to a record.
?Though the debt problems in Europe are pretty well flagged, it will remain a concern until governments take decisive action,? said Lee King Fuei, a Singapore-based fund manager at Schroders Plc, which held $234 billion as of September. ?Inflation is something that?s really worrying investors as this would mean central banks will have to raise rates.?
The MSCI Asia Pacific Index lost 0.1 percent to 137.14 as of 11:54 a.m. in Tokyo, heading for its lowest close since Dec. 30. About the same number of stocks rose and fell. The gauge climbed to a two-and-a-half year high on Jan. 4 as data on U.S. manufacturing and services industries boosted optimism that a recovery in the world?s largest economy is strengthening.
Japan?s Nikkei 255 Stock Average dropped 0.2 percent and South Korea?s Kospi Index retreated 0.2 percent. Australia?s S&P/ASX 200 Index lost 0.1 percent. Hong Kong?s Hang Seng Index gained 0.1 percent, while Taiwan?s Taiex Index climbed 1.1 percent.
Property Tax
China?s Shanghai Composite Index slipped 0.7 percent. The central government approved Shanghai?s introduction of a property tax which is likely to begin in the first quarter of this year, the China Daily reported, citing unidentified people close to the decision-makers. Details still need to be worked out, the report said.
Futures on the Standard & Poor?s 500 Index rose 0.1 percent today. The index dropped 0.1 percent in New York yesterday.
Alumina declined 4.3 percent to A$2.45. Its partner Alcoa, the largest U.S. aluminum producer, slumped 1.6 percent in extended trading after reporting sales that missed analysts? estimates even as it posted its highest profit in nine quarters.
Shares of Japanese exporters declined after the yen appreciated to as high as 82.67 against the dollar yesterday in New York, the most since Jan. 5. Against the euro, Japan?s currency rose to as much as 106.83, the highest level since September. A stronger yen reduces the value of overseas income at Japanese companies when repatriated.
Exporters Slide
Canon dropped 1.3 percent to 4,160 yen in Tokyo. Sony Corp., the maker of Bravia televisions and PlayStation gaming consoles, lost 0.3 percent. Nissan Motor Co., Japan?s second-biggest automaker by sales, declined 1.1 percent to 852 yen.
Samsung Electronics lost 0.6 percent to 912,000 won in Seoul. Hyundai Motor Co., South Korea?s biggest car maker, decreased 1.8 percent to 194,500 won. Kia Motors Corp. fell 1.8 percent to 58,600 won. South Korean automobile makers increased exports to Europe by 35 percent in the 11 months to November, data released by the Korea Automobile Manufacturers Association last week showed.
The cost to insure the debt of Portugal and Ireland against default with credit-default swaps rose to a record yesterday amid concern that funding challenges may force more euro-region countries to seek bailouts. Portugal, Spain and Italy are scheduled to sell debt this week.
Australian insurers declined on speculation claims will increase as worsening floods in Queensland killed at least eight people overnight and threatened to hit the state?s capital, Brisbane.
Rising Insurance Claims
Suncorp Group Ltd., which gets 26 percent of its premiums from Queensland, declined 2.5 percent to A$8.29 in Sydney. QBE Insurance Group Ltd., the nation?s largest insurer by market value, lost 0.2 percent to A$17.96.
Suncorp has received about 2,500 claims for flood damage in the state, said Jamin Smith, a spokesman for the Brisbane-based company said in a phone interview today. That number will rise as the weather situation develops, Smith said. Suncorp announced 1,450 claims from the floods on Dec. 31.
The floods, the state?s worst in 50 years, have affected about a million square kilometers, an area the size of France and Germany. Repairing the damage may cost more than A$5 billion ($4.94 billion), Queensland Premier Anna Bligh has said.
The MSCI Asia Pacific Index rose 14.3 percent last year, compared with gains of 12.8 percent by the S&P 500 and 8.6 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark were valued at 14.2 times estimated earnings on average at the last close, compared with 13.4 times for the S&P 500 and 10.9 times for the Stoxx 600.
--Editors: Nick Gentle, John McCluskey.
To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net.
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net
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