Sagging bank stocks pull down Asia

Asian shares fell on Thursday for the first time in five sessions as pessimism about the US economy grew after an unexpected fall in orders for US durable goods and the lowest sales of new homes in 13 years, though Hong Kong bucked the trend as property shares gained.

Banks in the region suffered after a prominent US analyst quadrupled her forecast for losses at Citigroup, raising fears of knock-on effects.

The MSCI Asia-Pacific index had fallen 1.2 per cent to 140.14 by late afternoon in Tokyo.

Precious metals rallied as the dollar sagged, with gold gaining 0.2 per cent to $950.80 a troy ounce. The yen was trading around Y99.19 per dollar after rising as far as Y98.57 earlier in the session and compared with Y99.50 territory overnight.

The stronger yen hurt Japanese exporters, which were also hit by the 1.7 per cent drop in orders for US durable goods in February. The Nikkei 225 pared losses to close 0.8 per cent lower at 12,605 while the broader Topix dropped 0.9 per cent to 1226.44.

Banks and carmakers were hit the hardest. Toyota Motor, which makes about one-third of its sales in North America, lost 2.9 per cent to Y5,110 and its affiliate, the vehicle parts maker Denso, slumped 4.1 per cent to Y 3,280. Nissan dropped 3.6 per cent to Y850.

Other companies with big US sales also suffered. TDK slumped 7.5 per cent to Y5,910 and Sony fell 3.8 per cent to Y4,070.

In the financial sector, Mitsubishi UFJ lost 2.1 per cent to Y877 and Mizuho Financial fell 3.8 per cent to Y380,000.

In Hong Kong, the Hang Seng ended 0.2 per cent higher at 22,664.22. Property shares buoyed the market, with Cheung Kong, the territory’s biggest developer, rising as much as 3 per cent ahead of announcing a 53 per cent rise in profits. The stock closed 1.6 per cent higher at HK$110.10.

The sector was also helped by a report in the Economic Times that a leading real estate agent predicts a 25 per cent rise in rents in Hong Kong this year. SHK Properties gained 2.6 per cent to HK$ 118.90.

HSBC, which makes around one-third of its profits from North American customers, reversed an earlier 0.5 per cent drop to finish 0.1 per cent higher at HK$127.40. Li & Fung, a big supplier to Wal-Mart Stores, shrugged off the pessimism about the US consumer to rise 4.4 per cent to HK$ 31.85 as investors anticipated a rise in annual profits.

The Hang Seng index of mainland China companies listed in Hong Kong lost 0.3 per cent to 11,828.84.

In Shanghai, the composite index lost 5.4 per cent to close at 3,411. Baoshan Iron & Steel slumped 9 per cent to Rmb13.06 after reporting a fall in profits for the first time since 2001 due to higher raw material costs. China Minsheng Banking fell 6 per cent to Rmb10.41 on news it was liquidating an overseas equity fund after the fund’s value fell more than 50%.

In Australia, the S&P/ASX 200 slipped 0.2 per cent to close at 5,371.6. Commonwealth Bank of Australia fell 1.9 per cent to A$ 42.31. But gains in resources stocks provided an offset. BHP Billiton, the world’s biggest miner, rose 1.3 per cent to A$ 35.76 while Rio Tinto gained 2.2 per cent to A$120.90.