Policy easing is still under way

Asian stocks fell, with the regional benchmark retreating from a six-month high, as oil prices at a nine-month high threatened to curb spending and Burberry Outlet accelerate inflation, tempering optimism after Euro-area finance ministers agreed a bailout package for Greece.

Belle International Holdings Ltd., a Chinese retailer of women’s shoes, dropped 1.9 percent as China pledged to maintain prudent monetary policy. Korean Air Lines Co. fell 6.7 percent after being cut to “sell” by Deutsche Bank AG amid weak cargo markets and high fuel costs. National Australia Bank Ltd., the nation’s No. 4 lender by market value, rose 1.1 percent after the Reserve Bank of Australia said it kept interest rates unchanged as European risks abated and can ease monetary policy if conditions worsen.

The MSCI Asia Pacific Index retreated 0.4 percent to 127.6 as of 2:42 p.m. in Tokyo, with five stocks falling for every four that rose. The gauge yesterday closed at its highest level since Aug. 4, and moved within 1 percent of completing a 20 percent advance from its October low and entering a so-called bull market.

The Euro-area agreement “is positive news for the market, as it eases one of its concerns,” said Ayako Sera, a market strategist in Tokyo at Sumitomo Trust & Banking Co., which manages the equivalent of $298 billion. “But the market has been rising on the hopes of the agreement, so when the fact comes out the focus will turn to whether Greece will be able to actually implement its deficit cut promises. The market will be dominated by uncertainties going forward.”

Asia Earnings Slide

Of 471 companies in the Asia-Pacific gauge that have reported net income since Jan. 9, more than half have fallen short of analysts’ estimates and profit has fallen 59 percent on average, according to data compiled by Bloomberg. That compares with the U.S., where net income has grown an average of 5.1 percent for Standard & Poor’s 500 Index companies that have reported, the data show.

Japan’s Nikkei 225 Stock Average fell 0.3 percent after swinging between gains and losses. South Korea’s Kospi Index fell 0.5 percent after rising as much as 0.3 percent. Australia’s S&P/ASX 200 Index increased 0.8 percent, reversing an earlier decline as the Reserve Bank of Australia released minutes of a Feb. 7 meeting that said risks of an “extremely bad outcome” from Europe have “diminished somewhat.”

Euro-area finance ministers reached agreement on a second bailout package for Greece, wringing concessions from private investors and tapping into European Central Bank profits to stave off a default next month. The leaders awarded 130 billion euros ($173 billion) in aid, engineered the central bank profits transfer and coaxed investor representatives into providing more debt relief in an burberry sunglasses exchange offer meant to tide Greece past a March bond redemption.

China Policy Stance

Oil traded near the highest price in nine months on speculation that the deal in Europe will boost demand as increasing tensions between Iran and the West put pressure on supply. The contract was at $104.92 at 3:11 p.m. in Sydney, near the highest intraday level since May 5, while the more actively traded April future gained $1.66 to $105.26.

Hong Kong’s Hang Seng Index fell 0.5 percent, led by Chinese retailers, shippers and property companies, and China’s Shanghai Composite Index retreated 0.2 percent. China will continue to implement proactive fiscal and prudent monetary policies this year as it adjusts the policies “slightly” to make them more targeted, flexible and forward looking, the official Xinhua reported, citing a statement from a meeting attended by members of the Politburo.

“If crude oil surges, that’ll add more imported inflation to China and limit China’s ability to boost economic growth,” said Dai Ming, a fund manager at Shanghai Kingsun Investment Management & Consulting Co. “Policy easing is still under way, but at a very slow pace.”

Control Property Loans

Separately, Shang Fulin, chairman of the China Banking Regulatory Commission, said preventing systemic and financial risks is an urgent task, according to statement posted on the regulator’s website today. The watchdog needs to “steadily” resolve risks associated with local government financing vehicles and control property loans risk, the statement said.

The MSCI Asia Pacific Index gained 12 percent this year through Feb. 20, compared with an 8.2 percent advance by the S&P 500 and a 9.7 percent increase by the Stoxx Europe 600 Index. Stocks in the Asian benchmark were valued at 14.6 times estimated earnings on average at the last close, compared with 13.1 times for the S&P 500 and 11 times for the Stoxx 600.

Panasonic Corp., a Japanese electronics company, dropped 2.1 percent in Tokyo after saying it plans to re-enter the European mobile-device market with a smartphone in April.

OneSteel Ltd. surged the most in almost burberry outlet online three years in Sydney as Australia’s second-biggest steelmaker said it’s switching focus to iron ore away from its loss-making steel unit. The shares rose 12 percent to 82 Australian cents, the biggest jump since April 2009.