Asian stocks fell overnight, with the regional benchmark index heading for a two-week low, as investors weigh corporate earnings and prospects Russia will be subject to new sanctions as tensions over Ukraine intensify.
Honda Motor sank 4.2 per cent as Japan's third-largest carmaker forecast a full-year profit that missed analysts' estimates. China Life Insurance, the nation's biggest company in the sector, slid 1.7 per cent in Hong Kong after saying net income fell 28 per cent in the first quarter from a year earlier as investment returns declined. Newcrest Mining, Australia's No. 1 gold producer, climbed 5.8 per cent as the bullion traded near a two-week high.
The MSCI Asia Pacific Index lost 0.4 per cent to 137.68 as of 12:30 p.m. in Tokyo, with seven of 10 industry groups falling. The gauge dropped 0.7 per cent last week after Chinese manufacturing data signaled persisting weakness in the world's second-largest economy. The US and European Union will impose new sanctions on Russia as soon as today as the crisis in Ukraine escalates amid the detention of international observers by pro-Russian separatists.
“We expect the market to consolidate in the next couple of months,” Audrey Goh, Singapore-based investment strategist at Standard Chartered, said by phone. “The Ukraine crisis will cause volatility in the market. Softening earnings is another area of concern for investors.”
Representatives of the 28 European Union nations will meet today to widen a list of people subject to asset freezes and travel bans, an official from the bloc said over the weekend. The sanctions will target 15 Russians in positions of power, another diplomat said. Both asked not to be identified because of the sensitivity of the matter.
"The Ukrainian tensions are once again mounting," Evan Lucas, a Melbourne-based markets strategist with IG Ltd., said in an e-mail to clients. "This will mean that Asia is starting the week on the back foot. Japan's Topix index fell 1.1 per cent. The nation's retail sales rose 6.3 per cent in March from February, beating analyst estimates. China's Shanghai Composite Index dropped 1.2 per cent and Hong Kong's Hang Seng Index fell 0.3 per cent. New Zealand's NZX 50 Index lost 0.4 per cent. Singapore's Straits Times Index slipped 0.1 per cent and Taiwan's Taiex index swung between gains and losses. Australia's SandP/ASX 200 Index gained 0.3 per cent, while South Korea's Kospi index rose 0.2 per cent.
Bloomberg
