SF: Decline With Spain, Italy Bonds; Yen, Commodities Weaken
Feb. 11 (Bloomberg) -- European and U.S. stocks fell with Spanish and Italian bonds as the region’s finance ministers prepared to meet to discuss aid to Cyprus and Greece. The yen weakened and natural gas led commodities lower.
The Stoxx Europe 600 Index dropped 0.3 percent at 9:31 a.m. in New York, trimming this year’s gain to 2.4 percent. Novo Nordisk A/S plunged the most in almost four years after failing to win U.S. approval for a new insulin. The Standard & Poor’s 500 Index slipped 0.1 percent. Italy’s 10-year bond yield rose three basis points to 4.59 percent, approaching a two-month high. The yen weakened against 15 of its major peers, falling 0.7 percent versus the euro. Natural gas, gasoline, copper and and soybeans lost more than 1 percent.
European finance chiefs were set to meet in Brussels today as a tightening election contest in Italy and corruption allegations in Spain threaten to reignite the region’s debt crisis. Ministers and central bankers from the Group of 20 will gather in Moscow later this week. Haruhiko Kuroda, one of the potential candidates to head the Bank of Japan, said additional monetary easing can be justified this year.
Stocks “were off to the races at the beginning of the year and it was too much to be sustainable,” Frances Hudson, who helps manage about $248 billion as a strategist at Standard Life Investments in London, said in an interview with Francine Lacqua on Bloomberg Television. “Having a nice pause to consolidate is a good thing and allows people to take a more measured approach.”
Equity trading volume was lower than average, with markets in Japan, China, Hong Kong, South Korea, Taiwan, Vietnam, Singapore and Malaysia closed for public holidays.
Sanofi Gains
Trading of company shares in the Stoxx 600 was 35 percent less than the 30-day average. Novo Nordisk sank 13 percent in Copenhagen. Sanofi, which produces the best-selling Lantus insulin, jumped 4.4 percent in Paris for the biggest gain since 2011.
Lundin Petroleum AB tumbled 9.2 percent after saying resources in its part of the Johan Sverdrup oil discovery may be toward the low end of previous estimates. Royal Ahold NV advanced 4.3 percent in Amsterdam after agreeing to sell its 60 percent stake in ICA, Sweden’s largest food retailer, to Hakon Invest AB for 20 billion kronor ($3.1 billion).
The S&P 500 has rallied 6.4 percent in 2013 to its highest level since November 2007 as U.S. lawmakers reached a budget compromise and companies reported better-than-estimated earnings. Loews Corp. is one of three companies in the U.S. gauge reporting earnings today.
Italy’s 10-year bond yield approached an eight-week high of 4.63 percent set on Feb. 8. The rate on similar-maturity Spanish debt climbed five basis points to 5.42 percent. U.S. Treasury 10-year yields rose one basis point to 1.96 percent.
Yen Weakens
The yen weakened 0.7 percent to 93.35 per dollar. The euro climbed 0.2 percent to $1.3385, snapping a three-day decline.
Some additional easing measures may be justified for 2013, Kuroda said in an interview in Tokyo today, stressing that he was speaking in his capacity as an economist and chief of the ADB, not as a BOJ contender.
The Group of Seven nations are considering releasing a statement on exchange rates this week to calm concern the world is on the brink of a currency war, three officials from G-7 countries said, before the G-20 meeting.
The S&P GSCI gauge slid 0.6 percent as 19 of 24 commodities declined. Natural gas futures declined 1.7 percent to $3.216 per million British thermal units, the lowest price in almost two weeks, amid forecasts for mild weather that would limit consumption of the heating fuel.
Soybeans fell after the U.S. Department of Agriculture raised its estimate of world inventories in a report on Feb. 8. Wheat slipped 0.3 percent and gasoline slumped 1.4 percent to $3.0171 a gallon. Brent crude slid 0.7 percent and copper retreated 0.9 percent.
The MSCI Emerging Markets Index slipped 0.2 percent as price swings fell to an all-time low amid Lunar New Year holidays. Benchmark gauges in Turkey and Thailand fell at least 0.6 percent. Indonesia’s Jakarta Composite Index rose 0.3 percent to a record, with trading volume 25 percent less than the 30-day average. Russia’s Micex Index was little changed, while India’s Sensex slipped 0.1 percent.
--With assistance from Adam Haigh in Sydney and Claudia Carpenter, Paul Dobson, Sarah Jones and Andrew Rummer in London. Editor: Michael P. Regan
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Pratish Narayanan in Mumbai at pnarayanan9@bloomberg.net
To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net
