Asian stocks and commodities dropped a third day, while regional bond risk jumped to a two-year high, on concern Europe’s debt crisis will worsen. The euro touched the lowest level in more than a decade against the yen.
The MSCI Asia Pacific Index sank 1.9 percent at 11:57 a.m. in Tokyo, set for its lowest close since July 2009. Standard & Poor’s 500 futures rose 0.3 percent after two-day drop that left the U.S. gauge within 1 percent of levels commonly seen as a bear market. S&P’s GSCI Index of raw materials dropped 0.7 percent, paced by oil and copper. The euro was at 101.39 yen after earlier dropping to 100.76, the weakest since June 2001.
Goldman Sachs Group Inc. cut its global growth forecasts and predicted recessions in Germany and France. European finance ministers meeting yesterday considered “technical revisions” to a July deal for a second Greek bailout, fueling concern bondholders may have to take bigger losses on the nation’s debt. Exporters led losses in Asia after automakers reported weaker- than-forecast North American sales and before data today forecast to show U.S. factory orders stalled.
“Investors are focused on European sovereign debt, they’re focused on European banks, and they’re worried about the end game for Greece and the possible contagion to Italy and Spain, and right now that’s trumping everything else,” Russ Koesterich, the San Francisco-based global chief investment strategist for the IShares unit of BlackRock Inc., said in a Bloomberg Television interview. His firm oversees $3.66 trillion as the world’s largest asset manager. “The market is not likely to bottom until we see some signs of clarity in Europe.”
Stocks Slump
About three shares fell for every one that gained on MSCI’s Asia Pacific Index, which started the fourth quarter with a 2.6 percent drop yesterday. The gauge is down 21 percent for the year. Japan’s Nikkei 225 Stock Average slipped 1.6 percent and the Kospi Index tumbled 4.6 percent in South Korea, where financial markets were closed for a holiday yesterday. China remains shut for the rest of the week.
Toyota Motor Corp. slipped 2.5 percent in Tokyo after Asia’s largest automaker reported a 17 percent drop in U.S. sales. Hyundai Motor Co. and affiliate Kia Motors Corp. dropped at least 2.5 percent each after their sales gains missed analyst expectations. Kawasaki Kisen Kaisha Ltd. sank 5 percent as Japan’s third-biggest shipping line by sales forecast a full- year net loss because of lower transport rates.
The world economy will probably expand 3.8 percent this year and 3.5 percent in 2012, compared with earlier predictions of 3.9 percent for 2011 and 4.2 percent for next year, Goldman Sachs economists Jan Hatzius and Dominic Wilson wrote in an Oct. 3 report. The brokerage lowered its forecast for earnings growth in Asia excluding Japan in a separate report today.
U.S. Economy
The S&P 500 slumped 2.9 percent yesterday to close at the lowest level since Sept. 8, 2010. The benchmark U.S. stocks gauge has dropped 19 percent since April 29, when it climbed to the highest level since 2008. A Commerce Department report today may show factory orders were little changed in August, after a 2.4 percent gain the prior month, according to economists surveyed by Bloomberg.
Yields on 10-year Treasuries climbed two basis points to 1.77 percent after dropping 16 basis points yesterday. The rate on 30-year bonds sank 19 basis points yesterday to the lowest level since January 2009 after the Federal Reserve bought $2.5 billion of longer-term debt. Thirty-year yields were two basis points higher at 2.75 percent today.
Japan’s bonds rose, dragging 30-year yields down 1.6 basis points to 1.905 percent. The Ministry of Finance will sell 2.2 trillion yen ($28.7 billion) of 10-year bonds today.
Europe’s Politicians
The euro traded at $1.3211, after earlier touching $1.3164, the weakest since Jan. 13. German Finance Minister Wolfgang Schaeuble opposed moves to increase the scale of the euro rescue fund, damping speculation of a breakthrough in talks to quell the crisis.
Speaking to reporters early today after chairing a meeting of euro finance chiefs, Luxembourg Prime Minister Jean-Claude Juncker gave no details about a possible recalibration of the debt exchange for Greece. The July agreement had called for investors to contribute 50 billion euros ($66 billion) to a 159 billion-euro rescue.
“If we don’t get a resolution in Greece, we may see a disorderly default,” said Koichi Kurose, chief economist in Tokyo at Resona Bank Ltd. which oversees the equivalent of $68 billion in assets. “The politicians are all over the place.”
The Australian dollar dropped as much as 0.5 percent to 94.77 U.S. cents before trading little changed at 95.29 cents. It pared losses after data today showed the nation’s trade surplus in August was the widest since June 2010. The Reserve Bank of Australia may keep interest rates unchanged at 4.75 percent today, according to economists surveyed by Bloomberg.
Korea CPI, Exports
South Korea’s won weakened to 1,204.91 per dollar, compared with the Sept. 30 close of 1,178.10. The currency fell to its weakest level since July 2010. South Korea’s consumer prices rose 4.3 percent in September from a year earlier, down from a 5.3 percent gain in August that was the biggest in three years, while exports climbed in September at the slowest pace in three months, government data showed.
The cost of insuring Asia-Pacific corporate and sovereign bonds against non-payment jumped, with the Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan increasing 11 basis points to 275, Credit Agricole SA prices show. That’s set for its highest close since May 1, 2009, according to CMA, which is owned by CME Group Inc., and compiles prices quoted by dealers in the privately negotiated market.
The Markit iTraxx Australia index rose 10 basis points to 238, according to Credit Agricole. The gauge is headed for its highest close since May 18, 2009, CMA prices in New York show.
Oil, Metals
Oil for November delivery dropped 1.2 percent to $76.68 a barrel in electronic trading on the New York Mercantile Exchange. Futures fell yesterday to the lowest settlement in more than a year. U.S. crude inventories climbed for a second week, an Energy Department report tomorrow may show. Libya aims to raise production to more than 500,000 barrels a day by the end of this month, according to Nuri Berruien, the chairman of state-run National Oil Corp., in Tripoli yesterday. The nation pumped 100,000 barrels a day in September.
Three-month copper dropped 2.6 percent to $6,810 a metric ton on the London Metal Exchange, set for a fifth day of declines. Zinc slipped 0.8 percent, nickel dropped 2.8 percent and aluminum declined 0.8 percent.
To contact the reporter on this story: Shiyin Chen in Singapore at schen37@bloomberg.net
To contact the editor responsible for this story: Shelley Smith at ssmith118@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Subscribe to:
Post Comments (Atom)
Posts
No comments:
Post a Comment