Asian stocks (MXAPJ) fell to the lowest in more than six weeks while U.S. equity futures and oil dropped on concern global economic growth will falter amid Europe’s debt crisis. Shares of Australian mining and steel companies slumped as the nation’s lower house of parliament passed a resources tax.
The MSCI Asia Pacific excluding Japan Index sank 2.4 percent at 3 p.m. in Hong Kong, set for the lowest close since Oct. 6, and Australia’s S&P/ASX 200 Index retreated 2 percent. Standard & Poor’s 500 Index futures slipped 1 percent and Euro Stoxx 50 contracts lost 1.3 percent. Oil fell 1.5 percent in New York. The Australian dollar weakened against all 16 major counterparts and the euro declined (MXAP) versus the dollar and yen. The cost of insuring Asia-Pacific debt from non-payment rose.
Data today showed China’s manufacturing may contract this month by the most since March 2009, and separate figures may show European manufacturing and services shrank and U.S. durable goods orders fell. Figures yesterday showed the world’s largest economy grew less than estimated last quarter, amid minutes from the Federal Reserve’s last meeting that showed some policy makers thought monetary easing may be necessary.
“What we’re seeing is stalling speed in the U.S.,” Viktor Shvets, a Hong Kong-based strategist at Samsung Securities Co., said in a Bloomberg Television interview. “The euro zone is clearly heading into recession.”
More than eight shares declined for every one that gained in MSCI’s Asia Pacific ex-Japan Index. South Korea’s Kospi index sank 2.4 percent, Hong Kong’s Hang Seng Index slid 2 percent and China’s Shanghai Composite Index decreased 0.7 percent. Japan’s financial markets are closed for a holiday today.
BHP, Steelmakers
BHP Billiton Ltd., the world’s largest mining company, slid 3.1 percent, a fourth day of losses, and OneSteel Ltd. (OST) sank 7.2 percent in Sydney trading. BHP Billiton and other producers face A$11 billion ($10.8 billion) of extra charges in the first three years of Australia’s tax on iron-ore and coal profits.
Hyundai Steel Co. (004020) retreated 5.9 percent after Moody’s Investors Service cut the outlook for its Baa3 issuer and senior unsecured bond ratings.
S&P 500 futures signal the gauge may extend a five-day, 5.6 percent slump. The benchmark index (SPX) lost 0.4 percent yesterday after Commerce Department data showed U.S. gross domestic product climbed at a 2 percent annual rate from July through September, less than projected by economists and down from a 2.5 percent prior estimate.
Durable goods orders may have dropped 1.2 percent in October, following a revised 0.6 percent decline the previous month, while personal spending probably increased 0.3 percent, slowing from a 0.6 percent gain in September, according to economists surveyed by Bloomberg before the reports today.
Europe’s Economy
A preliminary reading of a euro-area composite index from a survey of purchasing managers in manufacturing and services industries fell to 46.1 in November from 46.5 last month, according to the median estimate of economists surveyed by Bloomberg News. That’s the least since June 2009. Markit Economics releases the report today.
The 17-nation euro fell 0.3 percent to $1.3470 and traded 0.3 percent lower at 103.69 yen. European financial shares retreated yesterday, paced by an 8.1 percent slump in Dexia SA (DEXB), as Belgium’s bonds yields surged. Spanish debt also declined.
The Belgian, French and Luxembourg governments are in discussions with the European Commission concerning Dexia, Amelia Torres, a spokeswoman for the commission said yesterday. She declined to comment on the report in De Standaard that Belgium is seeking to renegotiate the rescue deal with France for Dexia Holding.
‘Downward Pressure’
“Europe is probably already in recession and that’s going to hurt demand for U.S. exports and put downward pressure on U.S. growth,” Alan Gayle, a senior strategist at RidgeWorth Capital Management in Richmond, Virginia, which oversees about $44 billion, said in a Bloomberg Television interview.
The Australian dollar weakened 0.6 percent to 97.73 U.S. cents, while New Zealand’s currency slipped 0.2 percent to 74.63 U.S. cents. South Korea’s won depreciated 0.6 percent to 1,151.85 per dollar. HSBC Holdings Plc and Markit Economics today reported a preliminary reading of 48 for China’s purchasing managers’ index. That compares with a final number of 51 last month and indicates a contraction.
Crude for January delivery decreased 1.5 percent to $96.57 a barrel in New York after the American Petroleum Institute said fuel supplies climbed 5.42 million barrels last week. An Energy Department report today may show they rose by 1 million barrels, according to a Bloomberg News survey.
Gold, Copper
Gold for immediate delivery rose 0.3 percent to $1,707.05 an ounce, while three-month copper erased gains of as much as 1.8 percent in London. Soybeans dropped as much as 1.7 percent to $11.3375 a bushel, the lowest price in more than a year.
The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan advanced nine basis points to 227 basis points, Royal Bank of Scotland Group Plc prices show. That would be the highest close since Oct. 7, according to data provider CMA. The Markit iTraxx Australia index increased five basis points to 210 as of 1:37 p.m. in Sydney, according to Australia & New Zealand Banking Group Ltd. prices. That’s the highest since Oct. 10, CMA data show.
To contact the reporter on this story: Shiyin Chen in Singapore at schen37@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
