HONG KONG, Oct 20 — Asian stocks fell, paring the benchmark regional equities gauge’s biggest monthly rally in five years, as material shares led losses.
The MSCI Asia Pacific Index slipped less than 0.1 per cent to 134.01 as of 9:08am in Tokyo.
The gauge surged 8.3 per cent this month through yesterday, on course for its best monthly advance since September 2010, as Chinese shares rallied and traders pushed back expectations on the timing of the Federal Reserve’s first interest-rate increase.
The global stock rebound in October has restored more than US$4 trillion (RM17.162 trillion) in equity value.
“The three-week recovery is approaching an exhaustion point,” said Matthew Sherwood, head of investment strategy at Perpetual Ltd. in Sydney, which manages about US$21 billion.
“Valuations have expanded and 2016 earnings have not been upgraded.”
The October surge pushed valuations on the MSCI Asia Pacific index this month back above their five-year average, Bloomberg data show.
The index trades at 13.6 times estimated earnings, the data show. Equity gains came after last quarter’s volatility triggered by China’s surprise decision to devalue the yuan in August.
Japan’s Topix index gained 0.5 per cent. South Korea’s Kospi index was little changed. New Zealand’s S&P/NZX 50 Index rose 0.7 per cent.
Australia’s S&P/ASX 200 Index dropped 0.3 per cent. The nation’s banking regulator will take additional steps by the end of 2016 to ensure Australia’s lenders have strong capital levels, the government said today in its response to the Financial System Inquiry.
E-mini futures on the Standard & Poor’s 500 Index slipped 0.1 per cent. The underlying gauge closed little changed on Monday at the highest since Aug. 20, rising above a level where past rallies since the summer selloff have lost momentum.
International Business Machines Corp. fell in late trading as quarterly revenue missed estimates. — Bloomberg
