BLBG:Stocks, Euro Fall as Spain Yields Climb; Commodities Drop
Stocks (MXWD) fell for a second day and the euro weakened on concern European leaders will struggle to resolve the debt crisis. Spain’s two-year notes stayed lower after a bill auction and commodities dropped.
The MSCI All-Country World Index lost 0.4 percent at 10 a.m. in London, while Standard & Poor’s 500 Index futures slid 0.2 percent. The Shanghai Composite Index dropped 0.9 percent amid escalating tensions with Japan, capping its biggest two-day loss since March. The euro depreciated 0.4 percent to $1.3071 and Spain’s two-year yield added two basis points to 3.36 percent. The S&P GSCI gauge of 24 raw materials slipped 0.4 percent, with nickel down 1.8 percent and soybeans falling 1.7 percent. New York oil declined 0.2 percent.
Spain sold 4.6 billion euros ($6 billion) of bills, more than its maximum target. Rising yields may force Spain to seek assistance, European Central Bank Governing Council member Luc Coene said yesterday. China and Japan’s worst diplomatic crisis since 2005 is putting at risk a trade relationship that’s tripled in the past decade to more than $340 billion. German investor confidence rose for the first time in five months in September, the ZEW Center for European Economic Research said.
“There are still a number of areas of concern,” Tim Schroeders, who helps manage about $1 billion at Pengana Capital Ltd. in Melbourne, said in a telephone interview. “Investors will become increasingly nervous if a policy response doesn’t materialize in China. There are still tensions between European partners in terms of what shape and form the ultimate rescue takes. The devil lies in the detail.”
European Stocks
The Stoxx Europe 600 Index (SXXP) retreated 0.7 percent, the most in two weeks. Renault SA and Intesa Sanpaolo SpA led gauges of automakers and banks lower. Akzo Nobel NV sank 4.7 percent as Chief Executive Officer Ton Buechner said he will take temporary leave after suffering fatigue less than six months after taking the post at the world’s largest paintmaker.
The drop in S&P 500 (SPX) futures showed the U.S. gauge may extend yesterday’s 0.3 percent decline. Dole Food Co. jumped 6.9 percent in German trading after the world’s biggest supplier of fresh fruit and vegetables agreed to sell its food packaging and Asia fresh produce businesses to Itochu Corp. for $1.69 billion.
Treasuries Gain
Germany’s 10-year bond yield dropped two basis points to 1.65 percent and the rate on similar-maturity Treasuries dropped three basis points to 1.81 percent as investors sought the safest fixed-income assets.
The euro slid against 14 of its 16 major peers, weakening for the first time in six days against the yen. Australia’s dollar dropped against all its major counterparts after minutes of the Reserve Bank’s September meeting showed officials believed the currency’s strength was a risk to the economy.
New York oil dropped to $96.21 a barrel after falling $2.38, or 2.4 percent, yesterday. Prices tumbled more than $3 in less than a minute yesterday. United Nations emission credits dropped as much as 6.5 percent to a record 1.43 euros ($1.87) a metric ton.
The MSCI Emerging Markets Index (MXEF) lost 0.6 percent. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong slipped 1.1 percent and Taiwan’s Taiex Index sank 0.4 percent. India’s Sensex Index dropped 0.2 percent.
To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Richard Frost in Hong Kong at rfrost4@bloomberg.net;
To contact the editor responsible for this story: Stuart Wallace at Swallace6@bloomberg.net
