Asian stocks fell even amid speculation the European Central Bank will boost stimulus through a sovereign-bond purchase program under the quantitative-easing strategy.
The MSCI Asia Pacific Index (MXAP) lost 0.1 percent to 134.46 as of 9:05 a.m. in Tokyo before markets open in China and Hong Kong. An ECB Executive Board proposal calls for as much as $1.3 trillion in asset purchases through the end of 2016, according to two euro-area central-bank officials who have seen the document. The Standard & Poor’s 500 Index added 0.5 percent and the Stoxx Europe 600 Index advanced 0.6 percent to extend a seven-year high yesterday.
“I’m not convinced that even a 1 trillion euro package will be enough to save the euro area,” said Matthew Sherwood, Sydney-based head of investment markets research at Perpetual Ltd., which has about $21 billion in funds under management. “It may be the case that this process has dragged on so long it’s mostly factored into financial market prices.”
Japan’s Topix index slid 0.1 percent. Australia’s S&P/ASX 200 Index advanced 0.5 percent and South Korea’s Kospi index added 0.4 percent. New Zealand’s NZX 50 Index added 0.2 percent after yesterday closing at a record high.
The ECB proposal could still be changed significantly, the people said, asking not to be identified as it is confidential. Purchases won’t start before March 1, one of the people said. The central bank will announce its policy decision today.
China Rebound
China’s Shanghai Composite Index jumped 4.7 percent yesterday, the biggest advance since October 2009. The gauge plunged by the most in six years on Monday as the nation’s biggest brokerages were suspended from adding margin-trading accounts.
China’s world-beating stock rally is over, according to the latest Bloomberg Global Poll. Some 58 percent of the survey’s 481 respondents said the Shanghai Composite Index (SHCOMP) will either decline or remain little changed over the next six months after a 55 percent advance since June. China’s economic growth slowed to its weakest pace in 24 years and a real-estate developer’s failure to meet an interest payment is raising the specter of a pickup in debt defaults.
Futures on the S&P 500 were little changed after the underlying measure advanced for a third day yesterday. Profit at S&P 500 companies probably climbed 0.8 percent in the final three months of 2014, analysts predicted, down from an October estimate of 8.1 percent.
To contact the reporter on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net
To contact the editors responsible for this story: Sarah McDonald at smcdonald23@bloomberg.netTom Redmond, Jim Powell
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