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Asian equities fall most in two weeks on concerns over China
Last Updated(Beijing Time):2012-03-06 08:10

Asian stocks fell the most in two weeks after China announced its lowest economic growth target since 2004, while the yen rose against its major peers and oil climbed.

The MSCI Asia Pacific Index dropped 0.9 percent at 4:15 pm in Tokyo. The Hang Seng China Enterprises Index slid 2.3 percent, led by insurers after American International Group Inc said it will sell shares of AIA Group Ltd.

The yen gained 0.6 percent versus the dollar, while China's yuan touched a four-week low. Oil advanced 0.3 percent after a US pipeline was shut.

China's government will aim for economic growth of 7.5 percent this year, the lowest goal since 2004, according to a transcript of Premier Wen Jiabao's address to the National People's Congress.

"Asia is all about moderation now," said Andrew Pease, the Sydney-based chief investment strategist for the Asia-Pacific region at Russell Investment Group, which manages about $150 billion. "It's a much more challenging market to be bullish in. While the risk of financial armageddon in Europe is gone, Europe is still going to have a large recession."

Three stocks fell for each that rose in the MSCI Asia Pacific Index. South Korea's Kospi Index sank 0.9 percent, Australia's S&P/ASX 200 Index retreated 0.2 percent and Japan's Nikkei 225 Stock Average fell 0.8 percent.

Hong Kong's Hang Seng Index dropped 1.5 percent and the Shanghai Composite Index lost 0.6 percent. China's non-manufacturing purchasing managers' index fell to 48.4 from 52.9 in January, official data showed on Saturday. A reading above 50 indicates expansion.

Chinese insurers fell after AIG said it's selling as much as $6 billion in AIA shares to help repay a US government rescue. The stake is being offered at a discount of as much as 7 percent to the Thursday closing price, based on a sales document obtained by Bloomberg.

China Life Insurance Co, the nation's biggest insurer, declined 4 percent and Ping An Insurance Group Co lost 2.9 percent in Hong Kong. AIA shares were suspended.

Sun Art Retail Group Ltd, China's largest hypermarket operator, tumbled 6.4 percent after reporting slower same-store sales growth.

The yuan declined 0.1 percent to 6.3055 per dollar and earlier touched 6.3075, the weakest level since Feb 7, according to the China Foreign Exchange Trade System. South Korea's won lost 0.3 percent to 1,118.63 per dollar and Malaysia's ringgit declined 0.5 percent to 3.0170.

Japan's yen rose amid speculation that exporters are buying the currency after it touched a nine-month low.

Futures traders are betting for the first time since May that the yen will fall against the dollar, figures from the Washington-based Commodity Futures Trading Commission show.

Oil climbed after falling 2.8 percent last week.

Rubber declined for the first time in four days as analysts estimate China's automobile sales are having their worst start in seven years amid record gasoline prices.

Deliveries of passenger autos in the first two months of 2012 fell 3 percent from a year earlier, based on the median estimate of five analysts surveyed by Bloomberg.

August-delivery rubber declined as much as 1.5 percent to 336.90 yen ($4.14) a kilogram on the Tokyo Commodity Exchange, the biggest drop since Feb 28.

The cost of insuring Asia-Pacific bonds from default rose, according to traders of credit-default swaps.

The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan advanced 3.5 basis points to 160.5 basis points, Credit Agricole SA prices show. The index is headed for its largest daily climb since Feb 10, according to data provider CMA.

Source:China Daily 
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