MSCI Asia Pacific Index to a three-week low

June 18 (Bloomberg) -- Asian stocks declined, dragging the MSCI Asia Pacific Index to a three-week low, as concerns about the strength of the U.S. economy dented prospects for export earnings.

Honda Motor Co., which gets more than half its sales in North America, dropped 2.6 percent as the dollar traded near a two-week low against the yen. Mitsubishi UFJ Financial Group Inc. sank 2 percent, pacing declines among banks, after Standard & Poor’s cut credit ratings on 18 U.S. lenders. Rio Tinto Group, the world’s third-largest mining company, slumped 9 percent as it began a $15.2 billion share sale.
The MSCI Asia Pacific Index lost 1.3 percent to 100.77 as of 5:52 p.m. in Tokyo, set to close at its lowest since May 28. A 43 percent rally from a five-year low on March 9 has taken valuations of the gauge’s stocks to the highest since September.
“Investors are using the weaker dollar as an excuse to take profit as valuations look stretched following the recent rally,” said Michiya Tomita, who helps manage $51 billion at Mitsubishi UFS Asset Management Co. in Hong Kong. “Any correction will be short-lived as long-term fund managers are still sitting on the sidelines with their cash.”
Japan’s Nikkei 225 Stock Average fell 1.4 percent to 9,703.72 paced by Sekisui House Ltd. after the homebuilder was downgraded at Credit Suisse Group AG. Hong Kong’s Hang Seng Index sank 1.7 percent.
The Shanghai Composite Index gained 1.6 percent, led by China Shenhua Energy Co., which climbed 5.5 percent as the World Bank raised its growth forecast for the country’s economy.


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