March 5 (Bloomberg) --
"Asian stocks fell the most in two weeks after China announced its lowest economic growth target since 2004 and the nation’s service industries shrank. The yen rose against its major peers, while oil climbed.
The MSCI Asia Pacific Index dropped 0.9 percent as of 1:46 p.m. in Tokyo. The Hang Seng China Enterprises Index slid 1.9 percent, led by insurers after American International Group Inc. said it’s selling AIA Group Ltd. shares. Standard & Poor’s 500 Index futures slipped 0.2 percent. The yen added 0.2 percent versus the dollar, while China’s yuan touched a four-week low. Oil advanced 0.2 percent after a U.S. pipeline was shut.
China’s government will aim for economic growth of 7.5 percent this year, the lowest goal since 2004, according to a transcript of Premier Wen Jiabao’s address to the National People’s Congress. Data today may show European retail sales declined for a third month, while U.S. services industries expanded, based on economist estimates compiled by Bloomberg.
“Asia is all about moderation now,” said Andrew Pease, the Sydney-based chief investment strategist for the Asia- Pacific region at Russell Investment Group, which manages about $150 billion. “It’s a much more challenging market to be bullish in. While the risk of financial armageddon in Europe is gone, Europe is still going to have a large recession.”
Asian Stocks
Almost three stocks fell for each that rose in the MSCI Asia Pacific Index, which rallied in each of the last 11 weeks. South Korea’s Kospi Index sank 1 percent, Australia’s S&P/ASX 200 Index retreated 0.4 percent and Japan’s Nikkei 225 Stock Average slipped 0.6 percent.
Hong Kong’s Hang Seng Index fell 1.1 percent. China’s non- manufacturing purchasing managers’ index fell to 48.4 from 52.9 in January, official data showed March 3. A reading above 50 indicates expansion. The Shanghai Composite Index was little changed as speculation policy makers will introduce measures to bolster Asia’s biggest economy eased concern about the outlook for economic growth.
AIA shares were suspended in Hong Kong. AIG said it’s selling as much as $6 billion of stock in the company to help repay a U.S. government rescue. The stake is being offered at a discount of as much as 7 percent to the March 2 closing price, based on a sales document obtained by Bloomberg. China Life Insurance Co., the nation’s biggest insurer, declined 3.3 percent. Ping An Insurance Group Co. lost 1.9 percent.
Sun Art Retail Group Ltd., China’s largest hypermarket operator, tumbled 6 percent after reporting slower same-store sales growth.
Yuan Weakens
The yuan declined 0.1 percent to 6.3043 per dollar and earlier touched 6.3075, the weakest level since Feb. 7, according to the China Foreign Exchange Trade System. South Korea’s won weakened 0.2 percent to 1,118.05 per dollar and Malaysia’s ringgit declined 0.4 percent to 3.0156.
Japan’s yen earlier fell to 81.87 per dollar, matching the weakest level in nine months. Futures traders are betting for the first time since May that the yen will fall against the dollar, figures from the Washington-based Commodity Futures Trading Commission show. The difference in the number of wagers by hedge funds and other large speculators on a decline in the yen compared with those on a gain -- so-called net shorts -- was 1,203 on Feb. 28, compared with net longs of 17,257 a week earlier.
Pipeline Shut
Oil climbed after falling 2.8 percent last week. Enbridge Inc. closed a pipeline in Illinois following a vehicle collision and fire at a pumping station. Gains were also spurred by concern of escalating tensions over Iran after President Barack Obama said the U.S. may use military force to stop the country from developing a nuclear weapon.
Rubber declined for the first time in four days as analysts estimate China’s automobile sales are having their worst start in seven years amid record gasoline prices. Deliveries of passenger autos in the first two months of 2012 fell 3 percent from a year earlier, based on the median estimate of five analysts surveyed by Bloomberg.
August-delivery rubber declined as much as 1.1 percent to 338 yen a kilogram ($4,137 a metric ton) on the Tokyo Commodity Exchange, the biggest drop since Feb. 28.
The cost of insuring Asia-Pacific bonds from default rose, according to traders of credit-default swaps. The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan advanced 3.5 basis points to 160.5 basis points, Credit Agricole SA prices show. The index is headed for its largest daily climb since Feb. 10, according to data provider CMA.
Ten-year Treasuries fell, pushing their yield two basis points higher to 1.99 percent. The Institute for Supply Management’s U.S. non-manufacturing index was probably 56.2 in February, versus 56.8 the month before, according to a Bloomberg News survey of analysts before the report today. The January figure was the highest since February 2011. "
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Steven Morris CA (SA)
Mobie : 083 943 1858
Fax: 086 671 2498
E-Mail: steven@global.co.za
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