Asian Stocks Drop Ahead of Fed Meeting; ANZ Bank Gains

Asian stocks fell, with the regional benchmark gauge paring its first back-to-back monthly gain since April, as investors awaited a two-day Federal Reserve policy meeting.

Komatsu Ltd. tumbled 8 percent in Tokyo after the world's second-largest maker of construction equipment cut its full-year profit forecast by 26 percent. Industrial & Commercial Bank of China Ltd. gained 1.4 percent in Hong Kong, pacing an advance among Chinese lenders, after China's central bank added funds to the financial system for the first time in two weeks. Australia & New Zealand Banking Group Ltd. (ANZ) climbed 1.4 percent to a record in Sydney after posting its highest profit and raising its dividend more than forecast.

The MSCI Asia Pacific Index slid 0.3 percent to 142.16 as of 12:37 p.m. in Hong Kong, with eight of the 10 industry groups on the gauge falling. Investors are waiting for clues on the outlook for Fed monetary stimulus when a policy meeting concludes tomorrow, after U.S. payrolls rose less than predicted last month and the 16-day government shutdown took at least $24 billion out of the world's largest economy.

"We've seen very strong gains across Asia and the market is pondering what the Fed is going to say," Tai Hui, Hong Kong-based chief Asia market strategist at JPMorgan Asset Management, which oversees about $2.2 trillion globally, told Bloomberg TV. "The market is positioning for some new messages from the Fed, especially their assessment after the government shutdown."

Cash Injection

Hong Kong's Hang Seng Index (HSI) slid 0.1 percent and China's Shanghai Composite Index dropped 1.1 after the central bank's first cash injection in two weeks failed to reduce money-market rates. Money-market rates in the world's second-biggest economy surged through Oct. 25 as the central bank refrained from injecting funds into the banking system.

ICBC gained 1.4 percent to HK$5.27 in Hong Kong. Bank of China Ltd. advanced 1.2 percent to HK$3.50 and China Construction Bank Corp. added 1 percent to HK$5.83.

"Liquidity flows are still going to be very accommodative from a central-bank perspective," Stephen Davies, Singapore-based chief executive officer at Javelin Wealth Management Pte Ltd., told Bloomberg TV. "If that's the case in the U.S., then it's doubly so for the European Central Bank, the Bank of Japan and various central banks out here in Asia."

Japan's Topix index slid 0.3 percent. Australia's S&P/ASX 200 Index dropped 0.6 percent and New Zealand's NZX 50 Index fell 0.2 percent. South Korea's Kospi retreated 0.3 percent and Singapore's Straits Times Index lost 0.1 percent. Taiwan's Taiex Index declined 0.2 percent. Futures on the Standard & Poor's 500 Index slid 0.1 percent.

Asian Earnings

The MSCI Asia Pacific Index gained 2.9 percent in October through yesterday, on course for a second monthly increase. That pushed its price-earnings multiple to 13.7 times estimated profit yesterday from 12.7 at the end of August, according to data compiled by Bloomberg. That compares with 15.9 for the Standard & Poor's 500 Index and 14.8 for the Stoxx Europe 600 Index.

Of the 121 companies in the MSCI Asia Pacific Index that have provided quarterly results this earnings season and for which Bloomberg compiles estimates, 54 percent posted profit that missed expectations, the data show.

The Topix lost 0.4 percent this month through yesterday, trailing all its 23 developed-market peers. Japanese shares are still the best performers this year among developed markets amid optimism Prime Minister Shinzo Abe's policies and unprecedented monetary easing from the Bank of Japan will lead the country out of deflation.

More than 1,100 companies on the Topix are reporting results through Nov. 7, the peak for earnings season, according to data compiled by Bloomberg. Earnings per share for companies on the measure are expected to increase 56 percent from the previous quarter, according to analyst estimates.

Indian Rates

The Reserve Bank of India will probably raise its benchmark interest rate today for the second straight month to fight the fastest inflation rate in Asia, a Bloomberg survey showed. The decision is expected at 11 a.m. local time.

The Fed is likely to delay reducing its $85 billion in monthly bond purchases until March, according to a Bloomberg News survey of economists conducted Oct. 17-18.

Komatsu lost 8 percent to 2,170 yen in Tokyo. The firm, which sells large dump trucks and excavators to customers such as Rio Tinto Group and BHP Billiton Ltd., said yesterday that demand for mining equipment may fall by half in the 12 months ending March 31.

NSK Ltd. sank 4.1 percent to 1,039 yen, paring its surge this year to 71 percent, even after the Japanese maker of ball bearings reported net income that beat estimates.

ANZ, Australia's third-largest bank by market value, rose 1.4 percent to A$33.705 after posting a 13 percent increase in second-half cash profit on higher lending and lower operating expenses. The bank boosted its final dividend to 91 Australian cents a share from 79 cents a year earlier. The median estimate of eight analysts surveyed by Bloomberg was for a dividend of 86 cents.