Asian markets lower as momentum turns

Concerns over the US economy caused markets to fall overnight with those leads hurting Asian markets. The MSCI Asia Pacific Index lost 0.9%, set for its biggest drop in a week. Japanese bonds gained. Crude slipped 1.2% in New York, zinc and lead decreased more than 1.5%, while corn slumped for a second day.

The US Federal Reserve yesterday reiterated a pledge to keep interest rates near zero and said it will complete a $600 billion bond purchase program as scheduled this month, even as Chairman Ben Bernanke said the recovery is progressing “more slowly” than expected. European leaders will hold a two-day summit in Brussels from today to discuss Greece’s financing needs amid efforts by the nation to stave off default.

About four shares declined for every three that gained on MSCI’s Asia Pacific Index, which snapped a two-day, 2.4% rally. Australia’s S&P/ASX 200 Index and Taiwan’s Taiex lost 0.5%, while Hong Kong’s Hang Seng Index retreated 0.9%. China’s Shanghai Composite Index declined 0.3%, paced by a 0.7% loss in Bank of China Ltd. China’s top economic planner – the National Development and Reform Commission – yesterday the country’s inflation rate will accelerate in June despite the government’s efforts to stem price increases. May inflation of 5.5% was up on April’s 5.3% and much higher than the 4% official government target. 

Hang Lung Properties Ltd. Chairman Ronnie Chan said the Hong Kong developer has built up Chinese currency holdings of 20bn Yuan over the past nine months, waiting for a pullback in prices to acquire land in the world’s fastest-growing major economy. Australian telecommunications giant Telstra announced an A$11bn deal with government owned NBN Co which will see it compensated for its infrastructure and customer contracts as a new fibre network is rolled out. The deal removes short term uncertainty and includes some generous terms. 

Elsewhere, Prada SpA’s trading debut in Hong Kong just as the territory becomes one of this year’s worst- performing markets for initial public offerings may foreshadow a slowdown in IPOs by foreign companies. The Italian maker of Miu Miu handbags may be poised to fall when it lists tomorrow, over-the-counter trading shows. A decline by Prada would add to losses of $873 million for investors in the 31 Hong Kong IPOs this year, according to data compiled by Bloomberg.

Commodities, like stocks, dropped after the US Fed announcement. Crude oil lost 1.2% to $94.27 a barrel in earning morning Singapore trading , zinc fell 0.9% to $2,232 a metric ton and corn dropped 1% to $6.44 a bushel, near the lowest level in three months. Gold for immediate delivery fell 0.1% to $1,546 an ounce and the Standard & Poor’s GSCI gauge of 24 commodities slid 0.8%.