Asian Stocks Fall After U.S. Consumer Confidence Index Declines

Asian stocks dropped for the first time in three days after an unexpected decline in a U.S. consumer confidence index raised concern about the strength of a revival in global growth.

Sony Corp., the maker of Vaio computers and PlayStation 3 consoles, sank 3.7 percent. Nissan Motor Co., which generates a third of its revenue in the U.S., lost 2.3 percent in Tokyo. Nintendo Co., the world’s biggest maker of handheld game consoles, lost 2.2 percent after Credit Suisse Group AG cut its investment rating.

“Investors didn’t like the signs of weakness in the U.S. economic recovery last week,” said Tomochika Kitaoka, a senior strategist at Mizuho Securities Co. in Tokyo.

The MSCI Asia Pacific Index lost 1.3 percent to 112.76 as of 9:59 a.m. in Tokyo. The gauge has climbed 60 percent from a five-year low on March 9 on speculation stimulus policies and lower interest rates around the world will help revive the global economy.

Japan’s Nikkei 225 Stock Average fell 2 percent even as a government report showed the country’s economy grew for the first time in five quarters. Australia’s S&P/ASX 200 Index slipped 0.8 percent, while New Zealand’s NZX 50 Index declined 0.2 percent.

Futures on the Standard & Poor’s 500 Index sank 0.5 percent. It lost 0.9 percent on Aug. 14 after The Reuters/University of Michigan preliminary index of sentiment fell to 63.2 from 66 the month before. Economists had forecast an increase to 69, according to the average estimate in a Bloomberg News survey.

Rising Valuations

Better-than-estimated economic and earnings reports worldwide have driven the MSCI Asia Pacific Index’s rally since March, lifting the average valuation of its companies to 25 times estimated profit, more than the S&P 500 Index’s 16.8 times.

Mohamed El-Erian, co-chief investment officer of Pacific Investment Management Co., told CNBC on Aug. 14 current market valuations aren’t warranted by the economic outlook for 2010.

Sony, which gets 24 percent of its revenue in the U.S., sank 3.7 percent to 2,615. Nissan declined 2.3 percent to 712 yen. Honda Motor Co., Japan’s No. 2 automaker, fell 2.9 percent to 3,030 yen.

Exporters also fell as demand for safe-haven assets increased following the U.S. confidence report, helping the yen strengthen to as much as 94.43 versus the dollar, compared with about 95.27 at the close of trading in Tokyo on Aug. 14. A stronger yen lowers the amount of dollar-denominated sales when converted back into the Japanese currency.

Nintendo fell 2.2 percent to 24,870 yen in Osaka. Koya Tabata, an analyst at Credit Suisse Group in Tokyo, cut the shares to “neutral” from “outperform” as sales of the Wii game console are likely to be worse than previously forecast.