Asia Stocks: Japanese Banks Decline on Tankan; Indonesia Gains
Oct. 3 (Bloomberg) -- Japanese stocks fell after the Bank of Japan's Tankan survey showed weaker-than-expected confidence among the nation's largest manufacturers. Lenders including Mitsubishi UFJ Financial Group Inc. led the decline.
The Nikkei 225 Stock Average and Topix index retreated after completing their best quarters in a decade.
``Investors got a little ahead of themselves with the Tankan,'' said Masayuki Kubota, who helps look after the equivalent of $8.5 billion at Daiwa Investments Ltd. in Tokyo. ``From here on, you can't avoid a short-term correction.''
The Nikkei 225 Stock Average lost 0.4 percent to 13,525.28 at the 3 p.m. close in Tokyo, or the first back-to-back drop since Aug. 5. The Topix dropped 0.1 percent, with lenders accounting for more than half the decline.
Key indexes fell in Hong Kong, Malaysia and Thailand and gained elsewhere. Indonesia's Jakarta Composite Index rebounded from an earlier decline as investors shrugged off concern over a bomb attack on Bali and bet the government's move to cut fuel subsidies will improve the nation's finances.
The Morgan Stanley Capital International Asia-Pacific Index, tracking more than 1,000 companies, slipped 0.5 percent to 112.62. Oil producers such as PetroChina Co. and Woodside Petroleum Ltd. fell after oil prices dropped.
Thailand's SET Index slid 0.9 percent, the region's biggest decline, on concern the government may say inflation in September climbed to a seven-year high. Markets in China and South Korea were closed.
Mitsubishi UFJ, which has 10 percent more assets than Citigroup Inc., dropped 4.7 percent to 1.42 million yen. Mitsui Trust Holdings Inc., Japan's seventh-biggest bank, lost 1.5 percent to 1,549 yen.
Tankan survey
The quarterly index of business confidence rose to 19 points in September from 18 points in June, the Tankan survey showed in Tokyo today. The median forecast of 36 economists was for a reading of 21. A positive number means optimists outnumber pessimists.
For the quarter, both the Nikkei and the Topix had their best three-month performance since the period ended September 1995. The Nikkei advanced 17 percent and the Topix index surged 20 percent.
The Topix measure tracking bank stocks, which jumped 37 percent in the past quarter, was the worst performer among the 33 industry groups that make up the index today. The industry group lost 0.8 percent.
Indonesia
Indonesia's stock index added 0.8 percent, extending a two- day, 5 percent jump. To cut the cost of fuel subsidies, President Susilo Bambang Yudhoyono almost tripled kerosene prices and doubled diesel tariffs from Oct. 1. Gas prices were increased by 88 percent.
The nation, the only member of the Organization of Petroluem Exporting Countries that imports more oil than it exports, had been struggling to maintain subsidies that keep fuel costs below market prices after oil futures jumped 53 percent this year.
The Jakarta Composite Index tumbled as much as 2.2 percent in earlier trading on concern bombs that killed more than 20 people on Bali will slow growth and investment. At least three bombs exploded on Oct. 1 in the worst attack on Indonesia since 202 people died in the Bali bombings of Oct. 12, 2002.
Mobius
``People are getting inured to the whole terrorism thing,'' said Mark Mobius, who oversees $17 billion in emerging-market assets at Templeton Asset Management Ltd. ``We think that the long-term policies they are following are the right ones.''
Any decline in prices would present a buying opportunity, he said.
PT Perusahaan Gas Negara, the nation's biggest gas distributor, jumped 14 percent to 4,775 rupiah. W.M.P. Simandjuntak, president of the company, said it was considering lifting gas prices following any increase in fuel prices. Unilever, the country's biggest maker of food and soap, climbed 4.9 percent to 4,275 rupiah.
Energy shares slid after New York oil futures fell 0.8 percent to $66.24 a barrel on Sept. 30. Oil prices, recently at $66.26, dropped 3.9 percent last month, the first decline since April.
PetroChina, China's biggest oil company, lost 0.8 percent to HK$6.45 in Hong Kong. Cnooc Ltd., China's largest offshore oil producer, fell 1.8 percent to HK$5.55. Woodside Petroleum, Australia's second-biggest oil producer, slid 1.3 percent to A$35.55, halting a 10-day, 11 percent advance.
Thailand
Bangkok Bank Pcl, Thailand's biggest lender, fell 1 percent to 104 baht. Krung Thai Bank Pcl, the nation's second largest, dropped 0.9 percent to 10.50 baht.
A higher inflation rate might pressure the central bank to raise interest rates next month, pushing up companies' borrowing costs and discouraging consumers from taking out loans.
The commerce ministry may say later today that consumer prices rose 5.8 percent from a year earlier after gaining 5.6 percent in August, according to the median forecast of six economists in a Bloomberg survey. That would be the highest inflation rate since October 1998.
``If we can't control inflation, investment and consumption will go down,'' Pimpaka Nichgaroon, head of research at Thanachart Securities Pcl in Bangkok. Investors should be worried about a pick-up in interest rates, she said.
To contact the reporter on this story:
Tomoko Yamazaki in Tokyo at tyamazaki@bloomberg.net;
Stuart Kelly in Sydney skelly22@bloomberg.net.
Tomoko Yamazaki in Tokyo at tyamazaki@bloomberg.net;
Stuart Kelly in Sydney skelly22@bloomberg.net.
Last Updated: October 3, 2005 02:55 EDT