A currency trader gestures at the foreign exchange dealing room of the Korea Exchange Bank headquarters in Seoul, South Korea
Asian stocks fell a fourth day as a deepening commodities selloff raised concern growth may be slowing in China, and as investors await clues from the Federal Reserve on the timing of a U.S. interest-rate increase.
Galaxy Entertainment Group Ltd. sank 4.4 percent as the Macau casino operator said quarterly earnings plunged 46 percent. Seek Ltd. tumbled 11 percent in Sydney after the Australian website operator said revenue growth will slow. Daiichi Sankyo Co. slumped 5.4 percent in Tokyo after Morgan Stanley cut its rating on the drugmaker.
The MSCI Asia-Pacific Index dropped 0.6 percent to 136.16 as of 4:01 p.m. in Tokyo, extending a seven-month low. Crude oil resumed losses and copper dropped to the lowest since 2009 as concern mounted that slower growth in China will erode demand for raw materials. Minutes of the Federal Reserve’s last meeting will come under scrutiny Wednesday, with traders seeing a 48 percent chance of a September rate increase.
“There’s a flow-on effect of the issues given concerns over the Chinese economic slowdown,” James Lindsay, who helps manage the equivalent of about $3 billion in assets at Nikko Asset Management NZ Ltd. in Auckland, said by phone. “The consensus is the Fed will raise rates in September, but there’s a potential for that to be pushed out amid increased market volatility.”
Japan’s Topix index fell 1.4 percent. South Korea’s Kospi index declined 0.9 percent. Taiwan’s Taiex index slipped 1.9 percent. Hong Kong’s Hang Seng Index dropped 1.3 percent. Singapore’s Straits Times Index fell 0.1 percent. Australia’s S&P/ASX 200 Index jumped 1.5 percent, the most in a month. New Zealand’s NZX 50 Index climbed 0.7 percent.
The Bloomberg Commodity Index fell on Tuesday to the lowest level since February 2002. The gauge of 22 raw materials declined for a sixth day in the longest run of losses in more than a year. With China the world’s biggest consumer of industrial metals, Tuesday’s 6.2 percent slump in the Shanghai Composite Index rattled raw-material investors.
The Shanghai benchmark rose 1.2 percent, erasing earlier losses of as much as 5.1 percent, as investors weighed the level of government support for the equity market.
“The market expects the government will step in if the Shanghai Composite falls towards 3,500, but more and more people in the mainland sees that the bull market is over,” said Mari Oshidari, a Hong Kong-based strategist at Okasan Securities Group Inc. “With weak sentiment, we will continue to see unstable moves in the market.”
Chinese stocks fell this week after the securities regulator said late Friday that China Securities Finance Corp., the state agency tasked with supporting share prices, will reduce buying as volatility falls. China’s richest traders are cashing out of stocks, while a record drop in yuan positions at the central bank and financial institutions last month signaled investors are moving money out of the country.
Futures on the Standard & Poor’s 500 Index slid 0.3 percent. The underlying measure fell 0.3 percent on Tuesday. Jonathan Burgos, Bloomberg
A small boat crosses in front of the Transocean Polar Pioneer, a semi-submersible drilling unit that Royal Dutch Shell leases from Transocean Ltd., as it arrives in Port Angeles, Wash.
Oil lease sale yesterday for tracts off of Texas
The federal government yesterday was to offer 21.9 million acres off the Texas coast to oil and gas developers, though low oil prices are likely to limit interest.
The last two comparable lease sales in the western Gulf of Mexico brought USD109.1 million last year and $100.1 million in 2012.
A March 18 sale in the far more popular central Gulf of Mexico brought the lowest number of bids since 1986. Officials said low oil prices were the reason. Since then, the price of U.S. crude has dropped $1.44 a barrel.
The National Ocean Industries Association, an offshore trade group, said in a news release earlier this week that members looked forward to the lease sale “but do not anticipate jaw-dropping results under current conditions.”
The group cited low prices, uncertainty over new regulations — including stronger rules proposed for equipment designed to prevent oil well blowouts — and an upward trend in lawsuits over permits and leases.
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