BLBG:Asia Stocks Drop With Oil On Global Growth Concern As Euro Falls
Asian stocks fell and oil dropped from a nine-week high as China pledged to keep property curbs and concern grew that Europe’s debt crisis is dragging on global growth. The euro weakened against most of its major peers.
The MSCI Asia Pacific Index (MXAP) fell 0.8 percent at 7 a.m. in London. Futures on the Standard & Poor’s 500 Index lost 0.4 percent while those on the Euro Stoxx 50 Index were little changed. The euro declined 0.2 percent against the dollar and yen before European finance ministers hold a conference call to set terms for Spain’s bailout. Oil declined 0.7 percent while corn rose 1.1 percent as a U.S. drought threatened supplies.
“For the market, the environment will continue to be quite challenging,” Steven Sun, an equity strategist at HSBC Holdings Plc., said in a Bloomberg Television interview. “Central banks globally are easing monetary policy to lower financial market volatility and avoid downside growth risk.”
China won’t relax property control policies and will instead seek to keep a “firm grip” on the real estate market to prevent a rebound in housing prices, Xinhua News Agency said. At more than half of 760 listed Chinese companies to report results, net income declined from a year earlier, worse than in the first six months of 2009, Societe Generale SA said yesterday.
Earnings at U.S. companies have exceeded analyst estimates at about 71 percent of the 110 S&P 500 companies that have reported quarterly results so far, according to data compiled by Bloomberg. Profits are down 0.7 percent for the group.
GE, IBM
General Electric Co., the world’s biggest maker of jet engines, power generation equipment and health-care imaging devices, will release its results today. U.S. stocks rose for a third day yesterday as earnings at companies from International Business Machines Corp., the biggest computer-services provider, and EBay Inc., the largest Internet marketplace, beat estimates.
The euro slid to $1.2253 per dollar and 96.30 yen, heading for a fourth weekly drop. Data next week may show a gauge for manufacturing in the euro region contracted in July and an index of household sentiment in the currency bloc was probably unchanged this month from June at minus 19.8, Bloomberg surveys showed.
The dollar and yen rose against most of their 16 major counterparts as the drop in Asian equities and weaker-than- forecast U.S. data boosted demand for safer assets. U.S. initial jobless claims were higher than estimated and measures of manufacturing activity and sales of existing homes missed estimates, reports yesterday showed.
Toyota, TSMC
Shares of Heineken NV might move after the world’s third- biggest brewer said it will offer up to $6 billion to take over Asia Pacific Breweries Ltd. London Stock Exchange Group Plc might move on speculation Europe’s oldest independent bourse is in merger discussions.
About five stocks fell for every three that rose on the MSCI Asia Pacific Index, which is headed for a third weekly advance in four weeks. Carmaker Toyota Motor Corp., which depends on North America for a quarter of its sales, dropped 1.7 percent in Tokyo. Taiwan Semiconductor Manufacturing Co., a contract manufacturer of chips, declined 1.3 percent in Taipei after saying revenue will “dip” in the fourth quarter because of a weak global economy.
“Deceleration in growth across Asia is going to keep a reasonably cautious and conservative outlook for investors,” said John Woods, chief Asian strategist at Citigroup Inc.’s private bank. The economies that “depend a large part of their growth on demand from Europe or the States are going to underperform.”
Oil, Corn
Oil traded at $91.98 a barrel after climbing to $92.66 yesterday, the highest close since May 16, on concern increased tension in the Middle East will threaten crude supplies. The Organization of Petroleum Exporting Countries, responsible for about 40 percent of global supplies, will curb exports by 0.9 percent to 23.78 million barrels a day in the four weeks to Aug. 4, compared with 24 million a month earlier, Oil Movements said yesterday in an e-mailed report.
Corn for December delivery was at $7.87 a bushel on the Chicago Board of Trade after reaching $7.99 yesterday. The record for a most-active contract is $7.9925, reached on June 27, 2008. The U.S., the world’s largest grower and shipper, is facing its worst drought in more than 50 years.
Severe to exceptional drought expanded to 48 percent of the Midwest as of July 17 from 33 percent a week earlier, the U.S. government said yesterday. World food prices tracked by the Food & Agriculture Organization will climb in July, according to Abdolreza Abbassian, an economist at the group.
To contact the reporters on this story: Glenys Sim in Singapore at gsim4@bloomberg.net; Susan Li in Hong Kong at sli31@bloomberg.net
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net
