Jan. 18 (Bloomberg) -- Asian stocks fell, snapping four weeks of gains, the won dropped and the cost of insuring bonds against default rose as U.S. consumer confidence trailed forecasts and European finance ministers meet later today to discuss Greece’s budget deficit.
The MSCI Asia Pacific Index lost 0.6 percent to 126.05 as of 2:12 p.m. in Tokyo, with more than two stocks falling for every one that gained. South Korea’s won dropped the most in a week and oil retreated for a sixth day. Standard & Poor’s 500 Index futures rose 0.2 percent. The U.S. stock market will be closed for the Martin Luther King Jr. holiday today.
Investors grew more skittish after JPMorgan Chase & Co. said it had a “cautious” outlook for consumer loan defaults and posted losses at its retail unit, following a Jan. 15 report that showed a smaller-than-expected gain in consumer confidence. Greece’s struggle to handle its financial shortfall may deter investors from buying the region’s assets.
“The rapid appreciation of share prices over the past 12 months means investors are right to question the rate of growth and the rate of future growth,” said Tim Schroeders, who helps manage $1.1 billion at Pengana Capital Ltd. in Melbourne. “The rate of improvement that some investors are expecting may not be as strong as previously estimated.”
South Korea’s won fell 0.3 percent to 1,125.85, the most in a week, after Finance Minister Yoon Jeung Hyun said it’s too early to be optimistic about the economy’s recovery from a slump. The Indonesian rupiah dropped 0.4 percent.
Bond Risk Rises
The cost of protecting against bond or loan defaults jumped, with the Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan rising the most since Nov. 27, according to CMA DataVision prices. The Markit iTraxx Australia index rose 4 basis points to 83 basis points, according to Citigroup Inc. The Markit iTraxx Japan index advanced 3 basis points to 126.5 basis points, according to Morgan Stanley prices.
“This is being driven by the increase in risk aversion in the U.S. and Europe,” said Gus Medeiros, a senior credit analyst with Deutsche Bank AG in Sydney. “Sovereign risk is having an impact on markets in Europe and those credit losses from JPMorgan were disappointing.”
The euro traded near the lowest in a week against the dollar ahead of a meeting of European finance ministers to discuss Greece’s debt. Greece shouldn’t count on its European allies to bail the country out, Luxembourg’s Jean-Claude Juncker, who heads the group of ministers, said last week.
‘Sovereign Solvency’
“Greece’s debt woes are keeping a lid on prospects of sovereign solvency in Europe,” said Minoru Shioiri, chief manager of foreign-exchange trading in Tokyo at Mitsubishi UFJ Securities Co.
The euro was at $1.4371 from $1.4387 in New York last week, after earlier dropping to $1.4335, the lowest since Jan. 8. The currency bought 130.62 yen from 130.61 yen after touching 130.09, the weakest since Dec. 22.
Japan’s Nikkei 225 Stock Average sank 1.3 percent, leading declines in the region after the Reuters/University of Michigan preliminary index of U.S. consumer sentiment rose to 72.8 in January, missing the median economist estimate of 74.
Mitsubishi UFJ Financial Group Inc., Japan’s biggest bank by market value, lost 1.4 percent. Fanuc, the nation’s biggest maker of industrial robots, dropped 2.3 percent.
Copper for three-month delivery gained 0.7 percent to $7,485 a metric ton on the London Metal Exchange after declining as much as 0.4 percent earlier today and dropping 0.8 percent on Jan. 15. Aluminum rose 0.4 percent to $2,315 a ton. Gold for immediate delivery was little changed at $1,133.21 an ounce.
Crude oil fell as the dollar gained against the euro and on speculation there is ample supplies to meet any increased demand as the global economy recovers from recession.
World markets are well-supplied and there is no need for the Organization of Petroleum Exporting Countries to alter its output quotas, Qatari Oil Minister Abdullah bin Hamad al-Attiyah said yesterday. Crude oil for February delivery fell as much as 93 cents, or 1.2 percent, to $77.07 a barrel in after-hours electronic trading on the New York Mercantile Exchange and was at $77.71 in Asia.