Asia stocks retreat for second day as oil, won decline

Asian stocks fell for a second day and oil retreated from a nine-month high as companies reported lower-than-estimated earnings and a bailout for Greece failed to spur confidence among investors. Bond risk in Asia rose.

The MSCI Asia Pacific Index slipped 0.1 per cent as of 10:39am in Tokyo, poised for the first back-to-back drop in six weeks. Standard & Poor’s 500 Index futures dropped 0.1 per cent. South Korea’s won weakened against 15 of its 16 major peers and the dollar touched a six-month high against the yen. Oil lost 0.4 per cent to $105.84 a barrel.

“The concern is whether companies will be able to deliver earnings in this kind of environment,” said Pauline Dan, who helps oversee $480 million as chief investment officer at Samsung Asset Management in Hong Kong. “Valuations remain reasonable but are no longer cheap.”

The agreement on a second bailout for Greece may not be enough to end the debt crisis, Bank of England Deputy Governor Charlie Bean said yesterday. Chinese manufacturing may fall for a fourth month in February, a preliminary reading from HSBC and Markit Economics indicated. Data later today may show U.S. sales of previously owned homes rose for a fourth month in January, according to the median estimate from economists surveyed by Bloomberg.

About four stocks rose for every three that fell in the MSCI Asia-Pacific gauge. The Nikkei 225 Stock Average advanced 0.3 per cent, the Hang Seng Index slid 0.4 per cent and the Shanghai Composite Index was little changed.

Small Tokyo-listed companies headed for their longest streak of daily gains in more than 50 years. Japan’s TSE Second Section Price Index, a gauge of smaller companies at the Tokyo Stock Exchange, added 0.2 per cent to advance for a 27th day, the longest stretch since 1961, according to data compiled by Bloomberg.

Wilmar International Ltd tumbled 8.7 per cent in Singapore. The world’s biggest palm-oil processing company reported fourth- quarter profit that missed analysts estimates. Fletcher Building Ltd lost 3 per cent in New Zealand. The nation’s biggest building products maker said full-year profit may fall as much as 14 per cent because of weak housing markets and delays in earthquake reconstruction.

The euro climbed 0.1 per cent to ¥105.66. The currency has climbed 0.8 per cent in the past week, the second-biggest advance among 10 developed nation peers tracked by Bloomberg Correlation Weighted Indexes.

Euro-area finance ministers yesterday awarded €130 billion ($172bn) in aid to Greece and reached an accord for greater debt relief from investor representatives in an exchange offer to tide the nation past a bond redemption next month.

Oil declined for the first time in a week. US crude inventories probably climbed to the highest level in almost five months as rising North American output and the planned reversal of the Seaway pipeline bolstered stockpiles, a Bloomberg News survey showed before tomorrow’s Energy Department report.

The cost of insuring Asia-Pacific bonds from non-payment rose, according to traders of credit-default swaps. The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan climbed 2 basis points to 160, according to Royal Bank of Scotland Group Plc. The gauge has fallen from 167.25 in the past three business days, according to data provider CMA.