BLBG:Gasoline Gains on Sandy as Asia Stocks Waver on Earnings
Gasoline rose as Hurricane Sandy threatened refineries and forced the U.S. to cancel equity trading. Asian stocks fluctuated on concern over corporate earnings and after Hong Kong introduced new property curbs.
Gasoline in New York advanced 1.1 percent to $2.73 a gallon as of 2:33 p.m. in Tokyo as crude futures fell 0.5 percent to $85.85 a barrel. The MSCI Asia Pacific Index (MXAP) of shares dropped 0.2 percent, reversing earlier gains today, and Standard & Poor’s 500 Index futures lost 0.4 percent. The Australian dollar weakened 0.2 percent to $1.0355, and soybeans in Chicago fell 0.9 percent.
The U.S. securities industry canceled equity trading on all markets today, and some New Jersey refineries shut or reduced operations as Hurricane Sandy barreled toward New York City with 70-mile-per-hour winds. Japanese stocks dropped after Honda (7267) Motor Co. and NTT DoCoMo Inc. cut profit forecasts. Shares of developers in Hong Kong slid on the city’s decision to impose its first property tax targeted at overseas buyers.
“The storm, depending on how bad it is, could take markets down,” said Steve Goldman, managing director at Kapstream Capital in Sydney. “There is some big downside risk if the storm turns out to be one of the biggest in U.S. history like they are predicting today.”
The trading suspension in the U.S., announced by the Securities and Exchange Commission and exchanges, followed an earlier decision by the New York Stock Exchange to close floor trading. Risks posed by the storm were deemed too great to require workers to travel.
Hurricane Sandy
The hurricane is forecast to make landfall late today in southern New Jersey, then turn inland, according to an advisory last night from the National Hurricane Center in Miami. Before the SEC made its statement, the Securities Industry and Financial Markets Association recommended trading in dollar- denominated fixed-income securities end at noon New York time today.
Phillips 66, NuStar Energy LP and Hess Corp. said they are shutting or reducing output at New Jersey refineries as a precaution against the storm that may become the worst to hit the region in 100 years.
“It won’t bring the world economy to an end, but volume should be slower than usual,” Timothy Ghriskey, the chief investment officer at Solaris Group LLC, which manages about $2 billion in Bedford Hills, New York, said. “It’s not going to be a huge impact because of electronic trading. Yet retailers, insurers and refiners might feel more pressure.”
Honda, DoCoMo
About the same number of stocks rose and fell on MSCI’s Asian gauge as regional trading volumes slid below average. The index dropped 0.9 percent on Oct. 26, the most in a month.
Japan’s Topix Index, the broadest gauge of stocks, fell 0.1 percent. Hong Kong’s Hang Seng Index fell 0.3 percent after sliding as much as 0.7 percent earlier. Australia’s S&P/ASX 200 Index added 0.1 percent.
New World Development Company Ltd. slumped 7 percent in Hong Kong while Sun Hung Kai (16) Properties Ltd. dropped 5.6 percent. Non-local and corporate buyers will have to pay a 15 percent tax upon purchase, Financial Secretary John Tsang said on Oct. 26. The government also raised a resale tax on property by about 5 percentage points and extended its timeframe to three years from two.
Honda, Japan’s third-largest carmaker by revenue, sank 4.5 percent after its forecast reduction. NTT DoCoMo, Japan’s top mobile-phone company, declined 6.1 percent.
BOJ Easing
Japan’s current earnings season peaks this week, with 571 of the 1,672 Topix companies reporting results. Investors also await economic data in the U.S. and Europe, and the outcome of a Bank of Japan policy meeting tomorrow.
The American and German jobless rates probably rose in October, while the Spanish economy shrank in the third quarter, according to economists polled by Bloomberg News before reports later this week.
All except one of 27 economists surveyed by Bloomberg expect the Bank of Japan to add to monetary stimulus at tomorrow’s meeting.
“Investors have expectations for further stimulus from the BOJ, but at the same time they’re also losing hope that big enough steps will be taken,” said Masaru Hamasaki, Tokyo-based chief strategist at Toyota Asset Management Co., which manages the equivalent of $23 billion. “Some investors are buying shares after Friday’s decline.”
Soybean futures fell to $15.50 a bushel while corn dropped 0.3 percent to $7.36 a bushel. Rain showers may develop late this week or next weekend, after hot, dry weather stressed developing soybeans and corn crops in Brazil, Telvent DTN Inc. said in a forecast on Oct. 26.
To contact Bloomberg News staff for this story: Chua Baizhen in Singapore at bchua14@bloomberg.net
To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net
