Asia stock index swings as Samsung gains, financial shares drop

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(Sept 4):  Asia’s benchmark stock index fluctuated after advancing yesterday to a one-month high, as Samsung Electronics Co. rallied while financial shares slid.

A gauge of financial companies was the biggest drag on the regional measure, with Yuexiu Property Co. tumbling 4.2 percent in Hong Kong after announcing a rights issue and Japanese consumer lender Acom Co. losing 2.4 percent. Hengan International Group Co. slipped 1.9 percent after BNP Paribas SA cut its rating on the diaper maker. Samsung, the world’s biggest smartphone maker, climbed 2 percent in Seoul after unveiling new Galaxy Note phones.

The MSCI Asia Pacific Index dropped 0.1 percent to 148.91 as of 11:27 a.m. in Hong Kong after rising as much as 0.1 percent. The gauge rebounded 15 percent from a February low through yesterday amid signs the U.S. economy is strengthening and as China’s policy makers introduced stimulus. Ukraine’s Petro Poroshenko reached a deal on ending hostilities after a phone call with Russian President Vladimir Putin over unrest in Ukraine’s east, he said on his website.

“We’re likely to have volatility in September,” Stuart Freeman, chief equity strategist at Wells Fargo Advisors LLC in St. Louis, Missouri, said on Bloomberg Television. “We’ve got a fundamental situation, an acceleration of growth that’s going to allow the market to move higher by the end of the year.”

BOJ Meeting

Japan’s Topix index slipped 0.2 percent. The Bank of Japan maintained its plan for a 60 trillion yen to 70 trillion yen ($668 billion) annual increase in its monetary base at the end of its two-day meeting as predicted by all economists in a Bloomberg News survey.

The BOJ and the European Central Bank emphasized the need to fight deflation and ignite growth at a symposium in Jackson Hole, Wyoming, last month. The ECB will also announce its monetary policy decision today.

Taiwan’s Taiex index and Australia’s S&P/ASX 200 Index lost 0.6 percent, while New Zealand’s NZX 50 Index was little changed. Singapore’s Straits Times Index fell 0.3 percent. Hong Kong’s Hang Seng Index both slid 0.4 percent. China’s Shanghai Composite Index added 0.2 percent. South Korea’s Kospi index rose 0.3 percent.

The MSCI Asia Pacific Index rallied 0.8 percent yesterday to 149.12, near the six-year high of 146.46 reached in July. The measure traded at 13.8 times estimated earnings yesterday, the highest this year.

“The market momentum is still strong,” Khiem Do, Hong Kong-based head of Asian multi-asset strategy at Baring Asset Management Ltd., said by phone. “Equities are still undervalued and the economic environment in Asia is stabilizing.”

Futures on the Standard & Poor’s 500 Index were little changed. The U.S. equity benchmark slipped 0.1 percent yesterday as the Nasdaq Composite Index fell the most in almost a month, dragged down by losses in Apple after Samsung’s announcement of its new smartphones and as the American company faced criticism for the theft of celebrity photos.

Ukraine Conflict

Ukraine President Poroshenko announced yesterday that he’d hammered out a deal with Putin to end the deadly unrest, sending global stocks and emerging-market currencies surging. When he later removed the word “permanent” from his cease-fire statement and Putin’s spokesman said there had been no deal, markets gave back some of the gains.

Putin called for an end to the rebels’ offensive in the country’s easternmost regions and urged the withdrawal of the Ukrainian military from residential areas as part of a seven- point proposal he presented in Ulaanbaatar, Mongolia. Putin’s spokesman Dmitry Peskov said that while the two leaders mostly agreed on steps needed for a truce, Russia can’t reach such an accord as it’s not party to the conflict.

Zhuzhou CSR Times Electric Co. surged 7.7 percent in Hong Kong before suspending trading on a report that the Chinese government is seeking a merger of two locomotive manufacturers, one of which is Zhuzhou’s parent.