Asian Stocks Fall Ahead of Release of U.S. Economic Data

Asian stocks fell as investors await economic data from the U.S. and amid concern gains in equities over the past two months have outpaced the prospects for company earnings.

Suntory Beverage & Food Ltd. sank 2 percent in Tokyo as the soft-drink maker that raised $4 billion in Japan’s largest initial public offering this year cut its profit projection. Ausdrill Ltd. slumped 28 percent in Sydney after the drilling contractor cut its profit forecast. GungHo Online Entertainment Inc. gained 1.6 percent as Japan Exchange Group Inc. and Nikkei Inc. said the Internet-game maker will be included in their new index.

The MSCI Asia Pacific Index lost 0.2 percent to 141.13 as of 10:15 a.m. in Tokyo, before markets open China and Hong Kong. Eight of the 10 industry groups on the gauge fell. The measure rose 9.3 percent this year through yesterday amid unprecedented stimulus from the Bank of Japan and optimism the Federal Reserve will continue its monthly bond buying into 2014.

Japan’s Topix index swung between gains and losses. Australia’s S&P/ASX 200 Index fell 0.2 percent, dragged lower by banks as Australia and New Zealand Banking Group Ltd. and National Australia Bank traded without the right to the current dividend.

(Source: Bloomberg)

Growth Probably Slowed Prior to U.S. Government Shutdown

The economy probably slowed in the third quarter and employers hired fewer workers in October, indicating the U.S. expansion was losing momentum even before the partial government shutdown, economists project reports to show this week.

Gross domestic product grew at a 2 percent annualized rate after a 2.5 percent pace from April through June, according to the median forecast of 69 economists surveyed by Bloomberg before Commerce Department figures due Nov. 7. Consumer spending, the biggest part of the economy, was probably the weakest since 2011. Payrolls rose by 125,000 workers after a 148,000 gain in September, Labor Department figures may show.

A drop in government output and restrained business and consumer purchases due to the 16-day shutdown last month have prompted economists to trim fourth-quarter growth forecasts, a separate Bloomberg survey showed. Tepid hiring and a jobless rate that’s projected to have climbed in October help explain why Federal Reserve policy makers are pressing on with stimulus.

The GDP report may show consumer spending, which accounts for about 70 percent of the economy, grew at a 1.6 percent annualized rate, the smallest gain since the second quarter of 2011, according to the Bloomberg survey median. Purchases advanced 1.8 percent from April through June.

(Source: Bloomberg)

Pound Jumps 1% Against Euro as EU Inflation Slows; Gilts Decline

The pound jumped more than 1 percent against the euro, the biggest gain in six months, after euro-area inflation slowed and the jobless rate climbed to a record, boosting demand for alternatives to Europe’s shared currency.

Sterling advanced for a second day versus the euro as the reports spurred speculation the European Central Bank will cut interest rates as soon as its meeting next week to revive growth. The pound may extend gains, according to UBS AG. U.K. government bonds fell as an index of U.S. business activity expanded at the fastest pace since March 2011, damping investor appetite for safer assets.

The pound advanced 1.1 percent to 84.70 pence per euro at 4:42 p.m. London time, the biggest gain April 25. The rally came after the U.K. currency slipped to 85.85 pence on Oct. 29, the weakest since Aug. 29. Sterling was little changed at $1.6047.

The ECB will cut its refinancing rate by a quarter percentage point to 0.25 percent at its Nov. 7 meeting, according to a research note from UBS. BNP Paribas SA, JPMorgan Chase & Co. and Scotiabank also changed their ECB calls today and now predict officials will lower rates in December.

(Source: Bloomberg)