Asian stocks slide, Fed damps stimulus hopes

Asian stocks slid, with the benchmark index dropping for the first time in four days amid market holidays across the region, after the Federal Reserve damped expectations for more monetary stimulus, sending commodity prices down and weighing on shares of resource companies.

BHP Billiton Ltd, the world’s No. 1 miner by market value, sank 1.7 per cent in Sydney and was the biggest contributor to declines on the MSCI Asia Pacific Index after metal and oil prices fell. Toyota Motor Corp rose 0.8 per cent after the dollar strengthened against the yen, boosting the earnings outlook for the exporter. SK Telecom Co slid 3.5 per cent in Seoul after Posco sold shares in the mobile-phone carrier.

The MSCI Asia Pacific Index fell 0.5 per cent to 126.76 as of 10 am in Tokyo, with about the same number of stocks rising as falling. Markets in China, Hong Kong and Taiwan are closed today for a holiday.

“I don’t think it was widely expected there would be additional easing coming,” said Matt Riordan, a portfolio manager who helps oversee about US$6.9 billion in Sydney at Paradice Investment Management Pty. “The market had a pretty good run and could be consolidating.”

Asia’s benchmark equity gauge has risen 11 per cent this year amid optimism the US economy will weather Europe’s debt crisis and monetary easing in Japan, China and Europe will spur growth. Gains slowed after China last month cut its target for economic growth as it seeks to cool the property market and become less dependent on exports.

Japan’s Nikkei 225 Stock Average lost 0.1 per cent today. Trading volume was 23 per cent below the 30-day average before a US jobs report due April 6 in Washington. Australia’s S&P/ASX 200 slid 0.3 per cent. South Korea’s KOSPI Index lost 0.4 per cent.

A gauge of volatility on the Nikkei 225 fell 1.2 per cent to 18.69, the lowest since July 8, indicating traders expect a swing of 5.4 per cent on the benchmark gauge over the next 30 days. A volatility measure for Korea’s Kospi 200 Volatility Index rose 0.2 per cent to 16.92.

Futures on the Standard & Poor’s 500 Index slid 0.2 per cent today. The index fell 0.4 per cent in New York yesterday as the Federal Reserve said it’s holding off on increasing monetary accommodation and U.S. factory orders missed estimates.

Payrolls in the U.S. probably increased by more than 200,000 workers in March for a fourth consecutive month as companies became more optimistic about the outlook for growth, economists predict a report will show on April 6 in Washington.

The Thomson Reuters/Jefferies CRB Index of raw materials fell 0.5 per cent yesterday. The London Metal Exchange Index of prices for six industrial commodities including copper and aluminum slipped 0.1 per cent yesterday. Oil for May delivery yesterday declined US$1.22, or 1.2 per cent, to US$104.01, the lowest close since March 30. -- Bloomberg