Asian stocks fell for the third week in a month after the U.S. Federal Reserve increased its discount rate for the first time in more than three years, and as companies reported declining earnings.

Aluminum Corp. of China Ltd., the nation’s biggest producer of the metal, slumped 4.3 percent in Hong Kong on concern demand will wane as stimulus policies globally are withdrawn. Qantas Airways Ltd. plunged 6.2 percent as first-half profit tumbled.
Toyota Motor Corp. declined 4.6 percent in Tokyo on concern the automaker will face further recalls. Sumitomo Corp., Japan’s third-largest trading company, sank 7.4 percent after offering to increase its stake in a cable-television company.
“If people think the Fed assumes the U.S. economy is resilient enough for a rate hike, they will start to expect stimulus measures to be withdrawn,” said Yuuki Sakurai, Tokyo-based chief executive officer of Fukoku Capital Management Inc., which manages the equivalent of $7.5 billion.
The MSCI Asia Pacific Index lost 0.9 percent to 115.33 this week. The index has lost about 9 percent from a 17-month high on Jan. 15 on speculation central banks will tighten monetary policy, and that Greece, Spain and Portugal will struggle to curb deficits.
Japan’s Topix index fell 0.4 percent this week after the nation said deflation accelerated. Hong Kong’s Hang Seng Index fell 1.9 percent in a week shortened by the holiday for the Lunar New Year. China’s markets were closed all week.
Australia’s S&P/ASX 200 Index gained 1.6 percent. Westpac Banking Corp., Australia’s second-biggest lender, soared 9.7 percent in Sydney after profit climbed 33 percent. CSL Ltd., the only influenza-vaccine maker in the Southern Hemisphere, jumped 9.6 percent as first-half profit beat estimates.
The MSCI Asia Pacific Index surged 34 percent last year as governments worldwide boosted spending and central banks lowered interest rates to help restore economies battered by the global recession. The gauge has fallen about 4 percent this year on signs governments from China to the U.S. and India will tighten lending and withdraw stimulus policies.
This week’s drop sent shares on the index to 18 times estimated earnings on average, the least since February 2009.
“People have a strong appetite for bargain hunting and can’t see bright prospects for higher share prices,” said Yoshihiro Ito, senior strategist at Okasan Asset Management Co., which oversees the equivalent of $8 billion.
Aluminum Corp. slumped 4.3 percent to HK$7.13. Rio Tinto Group, the world’s third-biggest mining company, dropped 1.3 percent to A$71. Esprit Holdings Ltd., a Hong Kong-based global clothing retailer, retreated 5.8 percent to HK$54.30. Li & Fung Ltd., which gets about 62 percent of its sales from the U.S., fell 0.9 percent to HK$35.10.
The Federal Reserve Board lifted the discount rate charged to banks for direct loans by a quarter point to 0.75 percent on Feb. 18, saying the change was intended as a “further normalization” of the Fed’s lending facilities. The move marks another step in a gradual retreat from the central bank’s unprecedented actions to halt the deepest financial crisis since the Great Depression. It has provided hundreds of billions of dollars in credit to banks, bond dealers, commercial-paper borrowers and troubled financial institutions.
(Source: Bloomberg)