Asia Stocks Drop as Hong Kong Shares Start Fourth Quarter Lower

(Bloomberg) -- Asian equities fell as Hong Kong stocks dragged the regional benchmark index lower.

The MSCI Asia Pacific Index declined 0.4 percent to 164.20 as of 10:57 a.m. in Hong Kong. Hong Kong’s Hang Seng Index fell 1.6 percent on its first trading day of the fourth quarter. Some blamed China’s weak manufacturing data over the weekend for the losses, as well as reports of a U.S. warship sailing close to islands claimed by China. Mainland markets and exchange links with Hong Kong will be shut throughout the week.

"The escalation of trade tensions between the U.S. and China recently has likely weighed on purchasing managers’ sentiment," Bank of America Merrill Lynch economists including Sylvia Sheng wrote in a note. "We expect China’s policymakers to step up easing to soften the blow from higher tariffs."

Japan’s Topix index advanced 0.3 percent, while the Nikkei 225 was little changed at the mid-day trading break after closing at a 27-year high Monday. Toyota Motor Corp. rose 1.6 percent in Tokyo, providing the biggest boost to the MSCI Asia Pacific Index, as a trade deal between the U.S. and Canada spelled relief for Japanese car manufacturers. India is closed for a holiday.

Summary

• Hang Seng China Enterprises down 1.6%
• Taiwan’s Taiex index down 1%
• South Korea’s Kospi index down 0.6%; Kospi 200 down 0.6%
• Australia’s S&P/ASX 200 down 0.7%; New Zealand’s S&P/NZX 50 down 0.3%
• Straits Times Index down 0.2%; Malaysia’s KLCI up 0.2%; Indonesia’s Jakarta Composite up 0.1%; Philippine Stock Exchange Index down 1%; Vietnam’s VN Index up 0.3%; Thailand’s SET Index down 0.1%

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