BLBG: European Stocks Fall With Copper as Yen Drops; Gold Gains
European stocks fell for a fourth day, led by commodity producers, and industrial metals declined. The yen slid on speculation Japan will escape censure at a Group of 20 meeting and the Swedish krona weakened after policy makers pushed back the timing of likely interest-rate increases.
The Stoxx Europe 600 Index (SXXP) sank 0.9 percent at 6:50 a.m. in New York, capping its longest losing streak since January. Germany’s DAX index slid 1.4 percent. Standard & Poor’s 500 Index futures fell 0.6 percent. Sweden’s krona depreciated 1 percent per euro and the yen declined 0.4 percent to 97.90 per dollar. Italy’s borrowing costs dropped to the lowest in almost three months. Gold rallied 1.1 percent to $1,383.47 an ounce, while copper fell 1.7 percent and tin tumbled 1.5 percent.
G-20 finance ministers and central bankers meet for two days from tomorrow in Washington before International Monetary Fund and World Bank talks. Slovenia, the first post-communist nation to adopt the euro, will offer 500 million euros ($659 million) of 18-month Treasury bills as the new government tries to convince markets it can avoid a bailout. Industrial metals declined after the IMF lowered its forecast for economic growth in China yesterday.
“We have seen a bit of nervousness linked to the poor figures out of China and the selloff in commodities,” said Jean-Paul Jeckelmann, chief investment officer at Banque Bonhote & Cie. In Neuchatel, Switzerland, who helps manage $1.4 billion in equities. “We should expect markets to continue to trade on the weak side as there is little incentive to be too aggressive at the moment.”
DAX Tumbles
The Stoxx 600’s retreat extended the drop over the past four days to 3.3 percent. A gauge of European mining shares retreated to the lowest since October 2011 as BHP Billiton Ltd. and Rio Tinto Group slid more than 2.5 percent.
The DAX index tumbled more than 2 percent in 25 minutes during the first hour of trading. Some 14,000 DAX Index (DAX) futures contracts expiring in June changed hands in a five minute period about 9:50 a.m. in Frankfurt today, more than 15 times the 20- day average volume for that time of day, according to data compiled by Bloomberg.
ASML Holding NV rallied 7.1 percent, the most since January, as Europe’s largest semiconductor-equipment supplier announced a buyback of as much as 1 billion euros of shares and first-quarter profit that beat estimates.
The volume of shares changing hands in Stoxx 600 companies was 37 percent higher than the average of the past 30 days, according to data compiled by Bloomberg.
Yahoo Forecast
The decline in S&P 500 futures indicated the U.S. gauge will pare yesterday’s 1.4 percent rally. Yahoo! Inc. slid 5 percent in pre-market New York trading as the biggest U.S. Web portal forecast sales that fell short of analysts’ estimates.
Some 16 members of the S&P 500 are due to report earnings today, including Bank of America Corp., SanDisk Corp., American Express Co. and EBay Inc. Of the 45 companies to have released first-quarter results so far, 71 percent topped analysts’ profit projections while 56 percent beat revenue estimates, according to data compiled by Bloomberg.
The Federal Reserve will release its Beige Book business survey today. New York Fed President William C. Dudley and his Chicago counterpart Charles Evans stressed the need for stimulus yesterday.
Gold climbed after falling 9.1 percent two days ago, the most since 1983. Copper fell to $7,178 a metric ton and tin declined to $20,800 a ton.
Oil Declines
West Texas Intermediate crude fell 0.6 percent to $88.15 a barrel in New York. Brent crude lost 0.5 percent $99.38 a barrel in London, after the front-month contract settled below $100 yesterday for the first time since July.
Carbon permits under the European Union’s emissions-trading system slipped 1.6 percent to 3.04 euros a metric ton in London. The December 2013 carbon contract plunged 35 percent yesterday, the most on record, after lawmakers rejected an emergency plan to address a surplus of allowances.
The yen weakened against 11 of its 16 major peers, losing 0.2 percent per euro. Europe’s shared currency lost 0.2 percetnt to $1.3156.
G-20 finance ministers at their last gathering in February signaled that Japan could stimulate its stagnant economy as long as policy makers didn’t advocate a sliding yen.
Japan’s easing policies are “appropriate” and the impact on the yen is “a logical consequence,” IMF Chief Economist Olivier Blanchard said in a recorded statement yesterday.
Tightening Delayed
The krona slid to its weakest level since Feb. 26 against the euro, dropping as much as 1.1 percent to 8.4736. Sweden’s central bank left its benchmark interest rate unchanged for a second meeting and delayed tightening to the second half of 2014 after the appreciation of the currency brought inflation to standstill.
Italy’s two-year note yield dropped four basis points to 1.40 percent, the least since Jan. 25, after the nation drew orders for more than 17 billion euros of a retail bond.
The yield on Slovenia’s 2022 dollar bonds sank 35 basis points to 5.96 percent. The auction results will be announced by 2 p.m. in Ljubljana, according to Marija Eber from the Treasury Department.
Slovenia, which missed a target for T-bill sales by almost half at an auction last week, is selling debt to help fund a repurchase of government bills after a second recession since 2009 caused a banking crisis and fueled speculation the nation would follow Cyprus in seeking aid.
The MSCI Emerging Markets Index slipped 0.2 percent, reversing earlier gains of as much as 0.4 percent. Benchmark gauges in Russia and Poland lost 1.6 percent as metal producers retreated.
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: Justin Carrigan at jcarrigan@bloomberg.net
