Nintendo Co., maker of the Wii game console, plunged 20 percent, the most in at least 20 years after slashing it profit outlook and discounting the price of one its main products. Taiwan Semiconductor Manufacturing Co. dropped 1.5 percent in Taipei after the chipmaker said profit declined for the first time in almost two years. AIA Group Ltd., the third-largest Asia-based insurer by market value, advanced 2.5 percent after first half profit beat estimates.
“If a resolution in the U.S. is not reached, clearly the economy will suffer so that demand will wane significantly, and we’ll see pressure on Asian exporter earnings and shares,” said Chris Hall, who helps manage $4 billion of assets at Argo Investments Ltd. in Adelaide. “Earnings are mixed across the spectrum. There are still a lot of unknowns right now, and everyone’s incredibly cautious.”
The MSCI Asia Pacific Index dropped 0.5 percent to 136.92 as of 12:27 p.m. in Tokyo. About two shares fell for each that rose on the gauge. The measure is headed for a decline this week as forecasts for higher earnings at companies from Canon Inc. to Baidu Inc. were overshadowed by concern the U.S. may default on its debt if lawmakers can’t reach an agreement on raising the government’s borrowing limit by Aug. 2.
No Vote
For the month, the MSCI Asia Pacific Index is on course for a 1.4 percent advance, its first such gain in three months.
Japan’s Nikkei 225 (NKY) Stock Average dropped 0.7 percent today. South Korea’s Kospi index lost 0.5 percent, Australia’s S&P/ASX 200 Index fell 0.7 percent and Hong Kong’s Hang Seng Index dropped 1 percent.
Futures on the Standard & Poor’s 500 Index dropped 0.7 percent today, indicating U.S. stocks will open lower on Friday, after chief U.S. House of Representatives vote counter Kevin McCarthy said there will be no vote on Speaker John Boehner’s debt-limit plan on Thursday night in the U.S. The index slid 0.3 percent yesterday in New York.
“Its unbelievable, these guys are not just playing with financial markets but their own constituents’ jobs,” said Sydney-based Shane Oliver, head of investment strategy at AMP Capital Investors Ltd., which has almost $100 billion under management. “It’s certainly adding to stock-market nervousness. I think they will eventually get a deal that avoids massive spending cuts or default, but the risk is growing that they won’t.”
Nintendo Plunges
Asian shares also fell today as downgrades to the profit outlooks of major Japanese companies overshadowed the fact that more companies reported better-than-estimated first-quarter earnings than those that missed, according to data compiled by Bloomberg.
Nintendo plunged 20 percent to 11,210 yen in Osaka, the biggest drag on the MSCI Asia Pacific Index. The game-maker said a lack of demand for its new 3-D handheld player led the company to slash the product’s price and earnings forecasts by 82 percent.
Taiwan Semiconductor Manufacturing slumped 1.5 percent to NT$71.90 after saying second-quarter net income fell 11 percent to NT$36 billion (1.3 billion), from NT$40.3 billion a year earlier.
AIA, Shinsei, Samsung
Among stocks that gained, AIA Group advanced 2.5 percent to HK$28.40 in Hong Kong after reporting net income climbed to $1.31 billion in the six months to May, from $1.06 billion a year earlier, beating the $1.09 billion average estimate of five analysts surveyed by Bloomberg.
Shinsei Bank Ltd., a Japanese lender, rose 6.7 percent to 95 yen after posting a 31 percent jump in net income. The stock was the second-biggest gainer on the MSCI Asia Pacific Index.
Samsung Electronics Co., the South Korean television maker, climbed 1 percent to 845,000 won after reporting second-quarter net income that beat analysts’ estimates.
Japan Tobacco Inc., the biggest support to the MSCI Asia Pacific Index, gained 4.7 percent to 343,500 yen after saying profit may increase 11 percent this fiscal year on higher prices in overseas markets.
Of 161 companies in the MSCI Asia Pacific Index that have reported net income since July 11, 76 have exceeded analysts’ estimates while 65 have fallen short, according to data compiled by Bloomberg. Total earnings declined 18 percent, the data show.
The MSCI Asia Pacific Index fell less than 0.1 percent this year through yesterday, compared with a gain of 3.4 percent by the S&P 500 and a drop of 3.2 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 13.5 times estimated earnings on average, compared with 13.1 times for the S&P 500 and 10.9 times for the Stoxx 600.
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