Most Asian Stocks Drop as Tokyo Shares Retreat; Taiwan Advances

(Bloomberg) -- Most Asian stocks fell as Japanese shares retreated amid a stronger yen, while concerns about elevated valuations dragged equities in India and Indonesia lower.

Some 550 shares dropped and 395 rose as the MSCI Asia Pacific Index added 0.2 percent to 138.91 as of 4:10 p.m. in Singapore. Japan's Topix index slipped for the first time in three days before a national holiday as the yen traded 0.4 percent stronger. Indian shares, trading near the most expensive level in 15 months, sank 1.1 percent, while the priciest valuations since 2007 weighed on Indonesian shares. Taiwanese equities closed at a 13-month high amid a surge in foreign buying.

“It's going to be quite tough for Japan with the yen strengthening,” Nicholas Teo, a strategist at KGI Fraser Securities in Singapore, said by phone. “Japan has tried a lot of things to stimulate growth.”

Asia's benchmark equities gauge has rallied 23 percent from a February low, shrugging off the effects of Britain's vote to leave the European Union as central banks unleash further monetary easing while data spurs confidence in the world's largest economy. A resumed decline in oil is weighing on investor optimism, and both Chinese and Japanese stocks have slumped this year even as the regional measure recovers.

Mountain Day

The Topix slipped 0.2 percent amid light trading. Japanese markets are closed on Thursday for Mountain Day holiday. Shiseido Co. plunged 7.5 percent after the cosmetics maker lowered its full-year net income forecast 13 percent, missing analysts estimates, as a stronger yen and the costs of its recent acquisitions dragged on profit.

Taiwan's Taiex index rose 0.5 percent to the highest close since July 2015. Overseas funds poured $6.8 billion into the island's equities this quarter, taking inflows for the year to $13 billion and making Taiwan the most popular destination for investors among nine Asian markets tracked by Bloomberg. South Korea's Kospi index closed little changed.

Singapore's Straits Time Index gained 0.4 percent, while Vietnam's VN Index climbed 1.7 percent for its steepest three-day rally since April. Australia's S&P/ASX 200 Index fell 0.2 percent, as did New Zealand's S&P/NZX 50 Index.

Exchange Earnings

Hong Kong shares edged higher at the close, with the Hang Seng Index climbing 0.1 percent. Hong Kong Exchanges & Clearing Ltd. fell 1 percent after Asia's biggest exchange operator by market value reported a 27 percent drop in first-half earnings. China's Shanghai Composite Index finished down 0.2 percent.

Investors are awaiting the release of Chinese data for July on industrial output, retail sales and fixed-asset investment due on Friday. Figures on money supply may be published as early as Wednesday. Reports earlier this week showed that exports remained subdued while a decline in producer prices narrowed.

Computershare Ltd. surged 8.8 percent in Sydney after the provider of corporate trust services said earnings this year will meet analyst estimates. Shimizu Corp. rose 6 percent in Tokyo after the construction company reported higher quarterly profit. Toyota Motor Corp. fell 1.1 percent, pacing losses among Japanese exporters as the yen strengthened.

Futures on the S&P 500 Index was little changed. The U.S. equity benchmark index added less than 0.1 percent on Tuesday, hovering near a record.

To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net. To contact the editors responsible for this story: Tom Redmond at tredmond3@bloomberg.net, Chan Tien Hin, Andrew Janes