Asia Stocks Trade Near 2-Month Low as China Congress Ends

Asia’s benchmark stocks index traded near a two-month low as China’s once-in-a-decade meeting to choose new leaders draws to a close.

Sharp Corp. (6753) surged 6.6 percent as Kyodo News reported Intel Corp. may invest as much as 40 billion yen ($500 million) in the Japanese TV maker. Iluka Resources Ltd. (ILU) fell 5.9 percent in Sydney after Goldman Sachs Group Inc. advised selling shares of the world’s biggest zircon producer, citing lower mineral sands prices. Fairfax Media Ltd. (FXJ), the Australian newspaper publisher that counts billionaire Gina Rinehart as its biggest shareholder, rose 2.6 percent after selling its U.S. rural media business to Penton Media for $79.9 million.

The MSCI Asia Pacific Index gained less than 0.1 percent to 120.04 as of 10 a.m. in Tokyo, before markets opened in China and Hong Kong. The gauge gained 10 percent through yesterday from this year’s low on June 4 as central banks added stimulus to spur growth and data showed a slowdown in China may be ending.

“With China’s growth target within reach and the employment situation acceptable, we do not expect fresh stimulus after the leadership transition,” said Ding Shuang, senior economist for China at Citigroup Inc. in Hong Kong, who previously worked at the country’s central bank. “It’s most likely that the economy will rebound in the first quarter and first half of next year.”
Nikkei, Kospi

Japan’s Nikkei 225 Stock Average (NKY) rose 0.1 percent, with volume almost 30 percent below the 30-day average. The gauge fell on the previous seven trading days, its longest streak of loses since April. South Korea’s Kospi lost 0.4 percent.

Australia’s S&P/ASX 200 Index (AS51) climbed 0.2 percent as a private survey showed consumer confidence surged to a 19-month high as central bank interest-rate cuts boosted household optimism.

China’s Party Congress meeting is scheduled to conclude today and the Politburo Standing Committee, the top decision- making body, will be unveiled tomorrow.

Futures on the Standard & Poor’s 500 Index advanced 0.2 percent today. The gauge dropped 0.4 percent yesterday as a slump in financial and technology shares erased an earlier rally led by Home Depot Inc., as investors watched for progress on Washington’s budget debate.

The MSCI Asia Pacific Index (MXAP) traded at 13.3 times estimated earnings yesterday, compared with 13.2 for the Standard & Poor’s 500 Index, 12.1 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Today is the last day of trading before MSCI Inc. announces its semi-annual rebalancing of indexes.

Via – Bloomberg

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.