BLBG:Asian Stocks, Oil Drop as Won Weakens on Concern Over Europe Debt Crisis
Asian stocks (MXAP) slid the most in three weeks, South Korea’s won weakened and gold rose as concern about Europe’s debt crisis outweighed forecasts for U.S. employment gains. The euro traded near a 15-month low versus the dollar.
The MSCI Asia Pacific Index (MXAP) slumped 1.1 percent as of 4:01 p.m. in Tokyo, poised for the biggest decline since Dec. 19. Euro Stoxx 50 Index futures fell 0.1 percent and contracts on the Standard & Poor’s 500 Index lost 0.2 percent. The won weakened against all 16 major counterparts, while the euro bought $1.2781. Gold climbed for a sixth day.
Data today is expected to show European consumer confidence slumped to the lowest in more than two years in December, while retail sales in the region fell in November and German factory orders declined, according to the median forecasts in Bloomberg surveys of economists. The U.S. economy probably generated 155,000 jobs in December, compared with 120,000 the previous month, based on estimates before a Labor Department report.
“Europe is going to be a headwind with all the bond auctions coming up,” said Belinda Allen, a Sydney-based senior investment analyst at Colonial First State Global Asset Management, which oversees about $145 billion. “Markets are a lot more comfortable with the U.S. economy at this point.”
Bond Auctions
France sold 7.96 billion euros ($10.2 billion) of debt yesterday in the country’s first bond sale of the year. Italy and Spain have auctions planned for next week as nations in the euro-region commence sales that may reach 262 billion euros in the first quarter, according to Deutsche Bank AG forecasts.
The euro was at 98.67 yen from 98.63 yesterday, when it touched 98.48 yen, the weakest since December 2000. German Chancellor Angela Merkel will meet French President Nicolas Sarkozy on Jan. 9 in Berlin to talk about increasing fiscal coordination among euro-region states ahead of the European Union leaders’ summit at the end of the month.
The Shanghai Composite Index (SHCOMP) erased an earlier loss of as much as 0.7 percent amid speculation the central bank will lower banks’ reserve-requirement ratios. The monetary authority said today it has suspended bill sales until after the Lunar New Year break, which ends Jan. 29. The Hang Seng Index (HSI) fell 1.1 percent today, poised for the biggest slump in three weeks.
“Every time the stocks fall considerably, there’s speculation there’ll be reserve-ratio cuts,” said Zhang Gang, a strategist at Central China Securities Holdings Co. in Shanghai. “The weekend’s here and there’s always the optimism it may happen. Such a rebound may not last unless the cut really happens.”
S&P 500 Futures
S&P 500 futures fell to 1,270.10 after the U.S. equity benchmark climbed 1.9 percent in the last three days. The yield on 10-year Treasuries was little changed at 1.99 percent.
More than four stocks fell for each that rose in the MSCI Asia Pacific Index. Japan’s Nikkei 225 Stock Average (NKY) slid 1.2 percent. The Kospi Index of South Korean equities sank 1.1 percent and the won weakened 0.9 percent to 1,162.75 per dollar.
SK Holdings Co. (003600) lost 1.9 percent in Seoul. Chey Tae Won, the chairman of South Korea’s third-largest industrial group, was indicted on charges that he embezzled funds from SK Holdings affiliates to cover investment losses by him and his younger brother.
Elpida Memory Inc. (6665), which makes computer memory chips, tumbled 5.4 percent in Tokyo. Nomura Holdings Inc. cut its 2012 growth forecast for global shipments of dynamic random access memory after prices of the chips used to help computers juggle programs fell.
Oil Supplies
Oil for February delivery declined 0.1 percent to $101.70 a barrel in electronic trading on the New York Mercantile Exchange. Energy Department data showed crude supplies climbed 2.2 million barrels last week, compared with a forecast for a 1 million barrel decline in a Bloomberg News survey. Oil has risen 2.9 percent this week on concern that sanctions against Iran will curb supplies.
“The bigger issues are the geopolitical crisis with Iran and the European debt crisis, pushing and pulling against the market,” said Anthony Nunan, a senior adviser for risk management at Mitsubishi Corp. in Tokyo. “People are coming back to the reality that the European crisis will still be a big drag on the economy.”
The European Commission is forecast to confirm today that an index of household sentiment in the single-currency area fell to minus 21.2 from minus 20.4 in November, according to the median estimate in a Bloomberg News survey before the report. Retail sales (RSSAEMUM) in the region probably dropped 0.4 percent in November, while German factory orders fell 1.8 percent, economist projections show.
Cash gold increased 0.3 percent to $1,626.90 an ounce. The metal has climbed 4 percent this week, set for the biggest advance since October. Copper for delivery in three months rose 0.7 percent to $7,592 per metric ton.
To contact the reporters on this story: Lynn Thomasson in Hong Kong at lthomasson@bloomberg.net; Jonathan Burgos in Singapore at jburgos4@bloomberg.net.
To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net
