Asian markets fall on Chinese growth fears

Asian stocks fell, with the regional benchmark index headed for its biggest loss in more than three weeks, as a gauge of China's services industries dropped, signaling growth may slow in the world second-biggest economy. SoftBank, a Japanese mobile phone operator, slid 3.5 per cent after the rating of Sprint, which SoftBank acquired last year, was cut at Cowen and Company. Fast Retailing, Asia's biggest apparel chain, lost 5.8 per cent in Tokyo as the Nikkei 225 Stock Average slipped from a six-year high. China Railway Group Ltd. slumped 3.3 per cent in Hong Kong after China's second-largest rail builder said its president died in an accident. The MSCI Asia Pacific Index slipped 0.8 per cent to 139.23 as of 3:48 p.m. in Tokyo, with all of its 10 industry groups falling. The gauge is headed for the biggest loss since December 12th. Energy and telecommunication-services shares led the drop.

This year “is going to be a year of consolidation,” Matthew Sherwood, head of investment markets research in Sydney at Perpetual Investments, which manages about $25 billion. “China’s growth is slowing down structurally. Our expectation out of China’s economy is it will grow just over 7 per cent this year.”

The Asia-Pacific gauge added 9.3 per cent in 2013, rising for a second straight year, as central banks across the globe acted to spur growth. The measure traded at 13.1 times estimated earnings as of January 3rd, compared with 15.5 for the Standard and Poor’s 500 Index and 13.7 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Japan's Topix index fell 0.8 per cent as the nation's markets reopened following holidays. The JPX-Nikkei Index 400, a stock measure created to boost investment in Japanese companies that provide higher returns on equity, fell 0.8 per cent on its debut today. The Nikkei 225 dropped 2.4 per cent as Fast Retailing, the heaviest-weighted stock, lost 5.8 per cent to 40,900 yen. Toyota Motor, the world's biggest carmaker, fell 1.9 per cent to 6,300 yen as the yen gained 0.4 per cent to 104.41 per dollar. The Nikkei climbed on December 30th to its highest close since November 2007. The measure capped a 57 per cent rally last year, the biggest annual gain since 1972.

Brent crude edged over $107 a barrel over-night, bouncing back from its biggest weekly fall in six months, but the restart of a key Libyan oilfield could limit gains. Crude supply from Libya is set to more than double from current levels after production at the El Sharara field resumed over the weekend as protesters ended a two-month blockade.

Brent crude for February delivery had risen 15 cents to $107.04 a barrel by 0601 GMT, after settling lower in the previous four sessions, partly on expectations of rising Libyan exports. US crude fell 7 cents to $94.03 a barrel. The contract lost $1.48 a barrel on Friday and posted its biggest weekly drop since June 2012.

Bloomberg/Reuters