Asian stocks fell for a second day, following the biggest three-day rout in U.S. shares in more than two months, as investors await the conclusion of a Bank of Japan policy meeting.
The MSCI Asia Pacific Index declined 0.6 percent to 137.69 as of 9:41 a.m. in Tokyo as all 10 industry groups on the gauge retreated, before markets open in Hong Kong and China. Investors are selling technology and telecommunication firms across the region, paring holdings in Internet companies that have led gains in global equities during the past 12 months.
"Equity valuations have peaked and markets will trade nervously going forward," said John Vail, Tokyo-based chief global strategist at Nikko Asset Management Co., which manages about $157 billion. There is "accelerating deterioration of China's economy and financial system and subpar U.S. and Japanese economic growth."
The MSCI World Index of developed-market stocks reached 15.4 times estimated earnings this month, compared with its average multiple of 13.8 over the past five years, according to data compiled by Bloomberg. The MSCI Asia Pacific Index yesterday traded at 12.6 times profit compared with 15.7 on the Standard & Poor's 500 Index, the data show.
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