BHP Billiton Ltd. (BHP), the world’s largest mining firm, lost 1.1 percent in Sydney as raw-materials shares posted the largest drop among the 10 industry groups on the regional index. Speco Co. (013810) gained 2.7 percent in Seoul, leading South Korean defense contractors higher, after the defense ministry said North Korea fired two short-range missiles off the country’s east coast today. Sega Sammy Holdings Inc. dropped 3.9 percent in Tokyo after the video-game maker cut its profit forecast.

The MSCI Asia Pacific Index slid 1 percent to 136.51 as of 9:22 a.m. in Tokyo, before markets open in China and Hong Kong. Futures on the Standard & Poor’s 500 Index lost as much as 0.9 percent, the biggest decline in a month, after the equity gauge rose to a record at the end of February. U.S. Secretary of State John Kerry said he is preparing to visit Kiev as Russia seized control of Ukraine’s Crimea region, intensifying one of the most serious standoffs since the Cold War ended.

“The immediate concern for markets is the possibility of escalation,” Ric Spooner, Sydney-based chief analyst at CMC Markets, said in an e-mail. “While most consider it unlikely that the West will be drawn into this conflict other than diplomatically, some hedging and de-risking of portfolios is not unusual in these situations.”

Asian shares last week posted a third week of gains, completing the first monthly advance since October, as company profit forecasts and takeover speculation in the technology industry outweighed concern that the region’s biggest economy is slowing. China’s Purchasing Managers’ Index fell to 50.2, the lowest since June, the National Bureau of Statistics and China Federation of Logistics & Purchasing said March 1 in Beijing.

Yen Rises

Japan’s Topix index lost 2 percent as the yen rose 0.4 percent to 101.35 per dollar. Australia’s S&P/ASX 200 Index (AS51) fell 1 percent and New Zealand’s NZX 50 Index declined 0.3 percent. South Korea’s Kospi index dropped 0.8 percent.

The MSCI Asia Pacific Index climbed 5.9 percent from this year’s low on Feb. 4 through the end of last week, leaving the gauge trading at 13 times the estimated earnings of its constituent companies, compared with 15.8 for the S&P 500 and 14.6 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

The Shanghai Composite Index (SHCOMP), China’s benchmark equities gauge, slumped 2.7 percent last week to cap the biggest drop in seven weeks amid concern economic expansion will ease as banks tame lending and a weaker yuan spurs capital outflows.

China Manufacturing

The China PMI reading of 50.2 for February compared with January’s 50.5 reading and the 50.1 median analyst estimate in a Bloomberg News survey. A number above 50 signals expansion. A private gauge scheduled to be released today will show manufacturing contracting for a second month in February, according to economists surveyed by Bloomberg.

A crisis in Ukraine has deteriorated as Russian President Vladimir Putin won parliamentary backing to send troops into its southern neighbor. Crimea, where Russian speakers comprise the majority, has become the focal point of Ukraine’s crisis after an uprising that triggered last month’s overthrow of President Viktor Yanukovych. Ukraine has put its forces on combat readiness and U.S. President Barack Obama warned Russia not to intervene.

The U.S., the U.K. and Canada are suspending preparations for a meeting of the Group of Eight industrial nations in Russia in June. Russia may lose its membership of the G-8, while the U.S. is considering imposing sanctions, Secretary of State Kerry said yesterday.

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/2014-03-03/asia-stocks-fall-amid-ukraine-tension-china-economy-data.html

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