Most Asia Stocks Fall as Valuations Approach 6-Month High

 Most Asian stocks declined, dragging the regional benchmark index lower for the first time in three days, after valuations climbed to near the highest level in six months.

Honda Motor Co. (7267) slid 1.2 percent as the yen strengthened against the dollar, weakening the earnings prospects for Japanese carmakers. Doosan Engineering & Construction Co. (011160) slumped 15 percent after the Korea Economic Daily said the Seoul-based provider of civil engineering and architectural services will sell redeemable convertible preferred shares. Perseus Mining Ltd. rose 5.5 percent in Sydney, leading a rebound in gold producers after the precious metal climbed.

The MSCI Asia Pacific Index slid less than 0.1 percent to 141.74 as of 9:46 a.m. in Hong Kong, with four shares falling for every three that advanced. The measure rose 9.6 percent this year through yesterday as investors bet the Federal Reserve will maintain its bond buying into 2014.

Valuations on the MSCI Asia Pacific Index yesterday climbed to 13.9 times estimated earnings, close to the multiple of 14 reached on Nov. 18, the highest level since May, according to data compiled by Bloomberg. That compares with 16.3 yesterday on the S&P 500 and 15.2 for the Stoxx Europe 600 Index.

(Source: Bloomberg)

Asian Stocks Trade at Two-Week High After China Reforms

Asian stocks held at a two-week high after China vowed to carry out the broadest expansion of economic freedoms since at least the 1990s.

Samsung Electronics Co. , the South Korean consumer electronics maker that gets 20 percent of its revenue in China, rose 0.5 percent in Seoul. Dwango Co. soared 17 percent in Tokyo, extending a 21 percent gain on Nov. 15 after saying Nintendo Co. bought a stake in the company that provides content through mobile phones. Chorus Ltd. dropped 3.7 percent after the operator of New Zealand’s telephone network withdrew its dividend guidance.

The MSCI Asia Pacific Index added 0.1 percent to 141.75 as of 9:41 a.m. in Tokyo after closing at the highest level since Oct. 31 last week. Japan’s Topix (TPX) index gained 0.2 percent as the yen maintained its slide past 100 per dollar. China pledged to allow more private investment in state-controlled industries, loosen its one-child policy and expand farmers’ land rights, according to a Communist Party policy decision published by Xinhua News Agency on Nov. 15.

Futures on Hong Kong’s Hang Seng Index gained 1.2 percent in their most recent trading session, while contracts on the Hang Seng China Enterprises Index jumped 2.2 percent. The Bloomberg China-US Index of the most traded Chinese stocks in the U.S. surged 3.4 percent on Nov. 15, the biggest daily advance since July.

(Source: Bloomberg)

Asian Stocks Pare Monthly Gain as Fed Fuels Tapering Bets

Asian stocks fell, trimming the best two-month rally for the regional benchmark gauge since the start of 2012, after the Federal Reserve fueled bets it may start paring stimulus sooner than previously forecast.

Alacer Gold Corp. sank 3.5 percent in Sydney as the price of the precious metal declined. Honda Motor Co. (7267) lost 1.8 percent after Japan’s third-largest carmaker reported second-quarter profit that missed analysts’ estimates amid slowing motorcycle sales in Southeast Asia. National Australia Bank Ltd. (NAB) retreated 2.3 percent as expenses climbed at the country’s largest lender by assets.

The MSCI Asia Pacific Index dropped 0.4 percent to 142.70 as of 9:37 a.m. in Hong Kong, with eight of the 10 industry groups on the measure retreating. While the Fed said fiscal policy is “restraining economic growth,” policy makers see signs of “underlying strength.”

“Tapering is inevitable, and that’s what you read from last night’s statement,” said Donald Williams, Sydney-based chief investment officer at Platypus Asset Management Ltd., which oversees about A$1.6 billion ($1.5 billion). “The timing is still unsure, but the market is going to price in the likelihood of tapering in the next six months at the latest.”

The odds of the Fed starting to taper its stimulus in January rose to 45 percent from 25 percent before yesterday’s statement, Citigroup Inc. said. Economists surveyed by Bloomberg Oct. 17-18 predicted the Fed would begin paring stimulus in March.

(Source: Bloomberg)