Asian stocks fell to a three-week low after Goldman Sachs Group Inc. cut its economic growth forecast for China, fanning concern a global recovery is losing steam. Currencies of commodity-producing nations strengthened after Australia reached a compromise on a new resources tax.
The MSCI Asia Pacific Index lost 0.4 percent and the Hang Seng Index slid 1.1 percent as of 4:20 p.m. in Tokyo. South Africa’s rand and the Australian dollar appreciated against the greenback, while the yen declined against all of the 16 most- used currencies. U.S. stock futures were little changed before jobs data today. The Stoxx Europe 600 Index rose 0.4 percent.
China’s economic growth will “slip to 8 percent or below” in the second half, Goldman Sachs said in a research note today, lowering its full-year projection to 10.1 percent from 11.4 percent. The country’s statistics bureau today revised its 2009 estimate up 0.4 percentage point to 9.1 percent. Analysts predict employment in the U.S., the world’s biggest economy, fell last month for the first time this year.
“Despite accommodative monetary policy in various parts of the world we’re yet to reach a point of self-sustaining recovery,” said Tim Schroeders, who helps manage about $1.1 billion at Pengana Capital Ltd. in Melbourne. “The Goldman Sachs revision on China is far from disastrous, but will create increased nervousness about global recovery.”
Eight of the 10 industry groups on the MSCI Asia-Pacific Index declined and the benchmark stock gauge was headed for its lowest close since June 10. Cnooc Ltd., China’s biggest offshore oil explorer, and Industrial and Commercial Bank of China Ltd., the world’s biggest lender by market value, were the biggest contributors to the MSCI’s decline.
Mining Tax
The South African rand appreciated 0.6 percent to 7.6918 per U.S. dollar and Australia’s currency bought 84.54 U.S. cents, from 84.34 cents late yesterday in New York. New Zealand’s dollar was little changed at 69.08 U.S. cents, after earlier climbing as much as 0.9 percent.
Fortescue Metals, Australia’s third-largest iron-ore miner, jumped 1.3 percent to A$4.05 as today’s announced mining tax deal ended a dispute that cost Prime Minister Julia Gillard’s predecessor, Kevin Rudd, his job last month. The levy will be 30 percent for iron ore and coal and 40 percent for oil and gas, compared with a 40 percent rate proposed by Rudd that would have applied to all resources
“The mining tax agreement is obviously a positive for Australia,” said Tony Allen, head of currency trading at ANZ National Bank Ltd. in Wellington. “The Aussie and kiwi will be focused on the bigger number which is non-farm payrolls, and how that plays out will dictate their performance from here.”
U.S. Jobs
U.S. companies cut 130,000 workers in June, according to a Bloomberg survey before today’s Labor Department report. Purchasing managers’ surveys published yesterday showed manufacturing growth in the U.S., the euro region and China slowed in June, suggesting a global recovery is losing steam.
The advance in futures for the Standard & Poor’s 500 Index suggests the gauge may recoup some of this week’s 4.6 percent drop when U.S. shares start trading today. Copper for delivery in three months gained as much as 2.9 percent to $6,513 a metric ton on the London Metal Exchange, trimming this week’s loss to about 4 percent.
“We’ve had a whole lot of macro data from all around the world suggesting that the prospects for economic growth aren’t as strong as people were expecting,” said Toby Hassall, a commodity analyst at CWA Global Markets Pty in Sydney.
To contact the reporter for this story: James Regan in Hong Kong Jregan19@bloomberg.net;
