BLBG:Stocks Drop, Yen Strengthens on Growth Outlook; Copper Declines
Stocks declined, dragging benchmark indexes for Asia and Europe to sixth straight weekly losses, and the yen gained against all 16 of its most-active peers amid concern the global recovery is slowing. Copper sank as China reported lower imports.
The MSCI Asia Pacific Index fell 0.3 percent to 132.26 as of 4:05 p.m. in Tokyo, after rallying as much as 0.7 percent. The Stoxx Europe 600 Index decreased 0.4 percent. Standard & Poor’s 500 Index futures lost 0.3 percent. The yen climbed 0.4 percent to 80.08 per dollar and rose 0.5 percent to 116 against the euro. Copper slid 0.6 percent in London, while oil slipped 0.3 percent in New York. Corn snapped a three-day advance.
MSCI’s Asia Pacific index was set for its longest weekly slump since October 2008 after China reported a smaller-than- estimated trade surplus today as export growth slowed, India’s industrial output cooled and South Korea raised interest rates for a third time this year. Data yesterday showed the U.S. trade deficit narrowed amid record exports and consumer confidence improved, while Federal Reserve Vice Chairman Janet Yellen said the housing market will undergo a “long, drawn-out recovery.”
“Investors will remain cautious until we see a clearer picture regarding Europe’s sovereign debt crisis and the U.S. economic slowdown,” said Hong Kong-based Yoji Takeda, who helps manage $1.1 billion at RBC Investment Management (Asia) Ltd. “Inflation in Asia also remains a key concern.”
About three shares fell for every two that gained on the MSCI Asia Pacific Index. The gauge has declined 1.2 percent this week, the most since the five days ended May 6. Fed Chairman Ben S. Bernanke gave no sign of new economic stimulus plans when he spoke at a conference in Atlanta this week.
South Korea, China
South Korea’s Kospi Index fell 1.2 percent, reversing a 1.1 percent gain, after the central bank boosted the benchmark seven-day repurchase rate to 3.25 percent from 3 percent, following increases in January and March. The Bombay Stock Exchange Sensitive Index lost 0.5 percent after data today showed India’s industrial output rose 6.3 percent in April, following an 8.8 percent gain in March.
Technology shares posted the biggest decline by industry groups in the MSCI gauge. HTC Corp. sank 6.8 percent in Taipei after Goldman Sachs Group Inc. removed the maker of smartphones from its so-called conviction buy list, saying the company could face “mild headwinds.” Hynix Semiconductor Inc. dropped 7 percent after bourse operator Korea Exchange Inc. ordered the chipmaker to comment on speculation it would sell new shares.
U.S. Economy
The S&P 500 Index gained 0.7 percent yesterday, as the cheapest valuations of the year lured equity investors. The measure snapped six days of losses, its longest slump since February 2009. Yields on 10-year Treasuries fell to 2.98 percent.
The central bank will “continue to use its policy tools to support economic recovery and carry out its dual mandate to foster maximum employment in the context of price stability,” Fed Vice Chairman Yellen said yesterday. New York Fed President William Dudley is due to speak in Brooklyn, New York, today.
The Dollar Index, which tracks the U.S. currency against those of six trading partners, climbed for a third day, gaining 0.1 percent. The measure advanced 0.3 percent yesterday after Commerce Department figures showed the U.S. trade gap shrank to the lowest level since December. Exports increased 1.3 percent to $175.6 billion, boosted by sales of fuel oil, petroleum products and computers.
Copper, Oil
Copper for three-month delivery fell 0.3 percent to $9,025 a metric ton on the London Metal Exchange. China imported 254,738 tons of copper and metal products in May, down 3 percent from 262,676 tons the previous month, according to a statement posted on the customs agency’s website today.
The customs bureau said exports rose 19 percent from a year earlier and imports climbed 28 percent. The data compared with median economist forecasts for a 20 percent gain in overseas shipments and a 22 percent increase in exports.
Oil for July delivery slid 0.3 percent to $101.68 a barrel on the New York Mercantile Exchange. Futures have climbed 1.5 percent this week, the most in four weeks, after the Organization of Petroleum Exporting Countries on June 8 failed to agree on quotas for the first time in at least 20 years.
Corn fell 0.2 percent to $7.84 a bushel, halting a three- day, 7.3 percent rally. Futures yesterday reached the highest level since June 2008. Wheat gained 0.4 percent to $7.48 a bushel.
--With assistance from Susan Li in Hong Kong, Monami Yui in Tokyo, Seyoon Kim in Seoul and Masaki Kondo and Ron Harui in Singapore. Editors: Darren Boey, Reinie Booysen.
To contact the reporters on this story: Shiyin Chen in Singapore at schen37@bloomberg.net; Jonathan Burgos in Singapore at jburgos4@bloomberg.net.
To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net
