Newcrest Mining Ltd., an Australian gold producer, dropped 3.5 percent in Sydney as futures on the precious metal fell. Naver Corp. (035420) sank 5.3 percent in Seoul amid concern an expansion at WhatsApp Inc. following its acquisition by Facebook Inc. will curb sales at the South Korean Internet site. Leighton Holdings Ltd. surged 6.5 percent after underlying profit at Australia’s largest construction company topped estimates.

The MSCI Asia Pacific Index lost 0.5 percent to 136.93 as of 9:32 a.m. in Tokyo, as all 10 industry groups declined. The gauge jumped 5.7 percent through yesterday from a five-month low on Feb. 4. The IMF, in a staff report prepared for central bankers and finance ministers from the Group of 20, said “significant downside risks remain” for the global economy. U.S. housing starts sank last month by the most in almost three years, according to a report yesterday.

“A recovery in global economic activity is unlikely to occur unabated,” Matthew Sherwood, who helps manage about $25 billion as the Sydney-based head of investment markets research at Perpetual Ltd., said by phone. “A souring in U.S. home-builder sentiment and an apparent softening in manufacturing add to a growing list of reports that point to a slowdown in the U.S. economy.”

Japan’s Topix index slid 0.7 percent and South Korea’s Kospi index fell 0.5 percent. New Zealand’s NZX 50 Index dropped 0.1 percent while Australia’s S&P/ASX 200 Index added 0.2 percent. Futures on the Standard & Poor’s 500 Index rose 0.1 percent today after the measure retreated 0.7 percent yesterday.

Fed Minutes

Fed policy makers backed away from their year-old commitment to consider raising interest rates when unemployment falls below 6.5 percent, according to minutes of their January meeting. With joblessness falling faster than expected even as other labor-market indicators show weakness, policy makers agreed it would “soon be appropriate” to revise their guidance about how long the era of record-low interest rates will remain.

“Several” Federal Reserve officials said that in “the absence of an appreciable change in the economic outlook, there should be a clear presumption in favor of continuing to reduce the pace” of bond buying at each meeting. A report at the start of the month showed U.S. manufacturing slower more than estimated.

Relative Value

The MSCI Asia Pacific Index traded yesterday at 12.9 times estimated earnings of its constituent companies, compared with 15.5 for the S&P 500 and 14.4 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

The Asian gauge rebounded 2.1 percent this month through yesterday after tumbling 4.6 percent in January amid a rout in emerging-market currencies.

“People are taking a cautious approach after a pretty strong run for equities,” Steven Milch, Sydney-based chief economist at Suncorp Group Ltd., said by phone. “Given uncertainties around economic data and around emerging markets, it’s appropriate that investors are a little bit more cautious.”

Economists surveyed by Bloomberg predict HSBC Holdings Plc and Markit Economics’ China flash manufacturing purchasing managers index today will come in at 49.5 for February. Readings below 50 signal shrinkage.

Futures on Hong Kong’s Hang Seng Index fell 0.2 percent in the most recent trading session while contracts on the Hang Seng China Enterprises Index of mainland Chinese stocks listed in the city lost less than 0.1 percent. The Bloomberg China-US Equity Index of the most-traded Chinese equities in New York added 0.7 percent in a sixth day of gains.

U.S. housing starts fell to an 880,000 annualized rate following December’s revised 1.05 million, the Commerce Department reported in Washington yesterday. The decrease was the biggest since February 2011. The median estimate of 84 economists surveyed by Bloomberg called for 950,000.

To contact the reporter on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net

To contact the editor responsible for this story: Sarah McDonald at smcdonald23@bloomberg.net

http://www.bloomberg.com/news/2014-02-20/asia-stocks-fall-as-imf-says-global-recovery-remains-weak.html

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