Asian stocks fell, with the regional gauge extending the biggest weekly loss since May 2012, as western nations disputed Crimea’s vote to rejoin Russia and China eased controls on the yuan.
Aeon Co. (8267) sank 4.4 percent in Tokyo after Japan’s biggest retailer posted profit that trailed estimates. Softbank Corp., a Japanese phone carrier that owns part of Alibaba Group Holding Ltd., jumped 5.6 percent after China’s biggest e-commerce company kicked off the process for what may be the biggest U.S. initial public offering in two years. Gold climbed to a six-month high on haven demand.
The MSCI Asia Pacific Index lost 0.3 percent to 133.98 as of 10:06 a.m. in Tokyo, extending last week’s 3.5 percent slump. Preliminary results show that more than 95 percent of voters in Crimea chose to leave Ukraine and become part of Russia in a referendum deemed illegal by the European Union and the U.S. From today, China will double the limit for the yuan’s daily moves against the dollar, easing controls on the exchange rate as appreciation bets waned amid slower economic growth.
“Investors are pretty nervous about the China story at the moment,” Adrian Mowat, Hong Kong-based chief Asia and emerging-market strategist at JPMorgan Chase & Co., said in an interview on Bloomberg Television. “You throw in what’s going on in Crimea, and I imagine it’s going to be a pretty difficult week for the markets.”
Japan’s Topix index slid 0.5 percent. Australia’s S&P/ASX 200 Index fell 0.1 percent and New Zealand’s NZX 50 Index dropped 0.3 percent. South Korea’s Kospi index added 0.2 percent. Markets in China and Hong Kong have yet to open. The Hang Seng Index last week posted its biggest decline since May 2012.
Economists at UBS AG, Bank of America Corp., JPMorgan Chase & Co. and Nomura Holdings Inc. have cut forecasts for Chinese growth after disappointing data fueled speculation the nation may not meet its 7.5 percent economic-expansion target for 2014.
The MSCI Asia Pacific Index slipped 5 percent this year through last week, dragging the value of the shares on the gauge to 12.6 times estimated earnings. That compares with a multiple of 15.7 for the Standard & Poor’s 500 Index and 14 for the Stoxx Europe 600 Index.
Futures on the S&P 500 lost 0.1 percent today. The U.S. benchmark index dropped 0.3 percent on March 14 amid concerns over the Crimea standoff.
Western countries have threatened to ratchet up sanctions against Russia if it doesn’t back down on annexing Crimea. Russia has deployed about 60,000 troops along the Ukrainian border, the government in Kiev said. The majority of Crimea’s residents are ethnic Russians and President Vladimir Putin says they are at risk after last month’s ouster of Ukraine’s president Viktor Yanukovych, who was backed by the Kremlin.
“The results of Crimea’s referendum were as expected, but it may prompt Europe and the U.S. to start economic sanctions against Russia,” said Nobuhiko Kuramochi, the Tokyo-based head of investment information at Mizuho Securities Co. “Investors will sit on the fence to see how the Ukraine situation pans out.”