Asian Stocks Drop Most in Month on Cyprus Deposit Tax

Asian Stocks Drop Most in Month on Cyprus Deposit Tax

Bloomberg, (18/3) -- Asian stocks fell for the first time in three days, heading for the biggest decline in a month, amid concern an unprecedented levy on bank deposits in Cyprus will plunge Europe back into crisis. The MSCI Asia Pacific Index dropped 0.9 percent to 135.37 as of 9:40 a.m. in Tokyo, before equity markets in Hong Kong and China open. The measure rose 5.6 percent this year through last week improving economic data from the U.S. and speculation that Japan will unleash more stimulus countered China’s efforts to rein in property prices. “The safest place to be if you think the market’s going to go down is cash,” Donald Williams, Sydney-based chief investment officer at Platypus Asset Management Ltd., which manages about $1 billion, said in a Bloomberg Television interview. “We’ve been finding valuations problematic for about six weeks and as a result we’ve built up cash in our portfolio. We’re looking for a deeper downturn than what we’re seeing today. There are no sectors that are particularly cheap right now. We’re only looking for a 10 percent correction at the most.” Japan’s Nikkei 225 Stock Average retreated 1.8 percent. Australia’s S&P/ASX 200 Index dropped 1.3 percent and South Korea’s Kospi Index lost 0.5 percent. Cypriot President Nicos Anastasiades bowed to demands by euro-area finance ministers to raise 5.8 billion euros ($7.5 billion) to help fund a bailout by taking a piece of every bank account in Cyprus. Anastasiades delayed a vote on the measure in parliament until today, a day later than planned, as he seeks more time to convince lawmakers to back him. Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co. in Newport Beach, California, said on Twitter that the concern in Cyprus “moves risk-on trade to back seat.” He added: “Sell euro as well.” “If it happened three years ago, you had to be pretty worried because the U.S. economy was a lot more fragile and there was more concern about China having a hard landing,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has $126 billion under management. “The general trend is improving rather than getting worse. So, it’s coming at a time when the world is stronger.” The euro dropped againt the dollar to its lowest level this year and the yen strengthened against all major currencies. http://www.bloomberg.com/news/2013-03-18/asian-stocks-drop-most-in-month-on-cyprus-deposit-tax.html