Oil fell for a fourth day, the euro weakened and U.S. equity futures slid after Greek bondholders said they’ve made their maximum offer in negotiations to prevent the country from defaulting.
Oil lost 0.7 percent to $97.63 a barrel as of 4:09 p.m. in Tokyo. The euro fell 0.3 percent to $1.2899. Euro Stoxx 50 Index futures were little changed, while Standard & Poor’s 500 Index futures slumped 0.4 percent. The MSCI Asia Pacific Index of shares rose less than 0.1 percent, led by telephone companies and financials. Silver advanced to a six-week high and wheat and corn futures climbed at least 0.6 percent. Bond risk in Japan slid to the lowest level in almost three months.
Markets including China, South Korea and Taiwan were shut today for the Lunar New Year holiday. Bondholders are leaving it to the European Union and International Monetary Fund to decide whether to accept a deal on Greece’s debt, said Charles Dallara, managing director of the Institute of International Finance and representative for the private creditors. EU leaders will meet in Brussels today to discuss budget rules, a financial firewall to protect indebted states and a ban on imports of Iranian oil.
“The market could come under short-term pressure as it’s had a strong run this year,” said Nader Naeimi, a Sydney-based senior strategist at AMP Capital Investors Ltd., which manages nearly $100 billion. “Greece defaulting is still a possibility.”
Stock Valuations
The MSCI Asia Pacific Index (MXAP) has rallied for the past five weeks, the longest stretch of gains in a year. The gauge of 1,004 stocks is up 6.1 percent in 2012, bringing its valuation to 12.7 times estimated profit, according to data compiled by Bloomberg.
Treasuries rose, snapping three days of decline. The yield on the 10-year note fell three basis points, or 0.03 percentage point, to 2 percent. Japanese government bonds fell, with the 10-year yield reaching 0.995 percent, the highest this year.
Australia’s dollar weakened as much as 0.3 percent to $1.0454 before trading little changed. A government report showed the nation’s producer-price inflation is slowing, providing scope for the central bank to cut interest rates for a third time. The S&P/ASX 200 index of shares lost 0.3 percent.
Olympus Corp. (7733) surged 8.2 percent in Tokyo trading, the second-biggest advance in the MSCI Asia Pacific Index. The Japanese camera maker that admitted accounting fraud was allowed to keep its stock market listing. The company was fined 10 million yen ($130,000) and told to submit annual reports on efforts to improve management, the Tokyo Stock Exchange said in a Jan. 20 statement.
Mitsubishi Tanabe
Mitsubishi Tanabe Pharma Corp. (4508), the developer of the multiple sclerosis treatment Gilenya, tumbled 7.6 percent for the biggest decline in 10 months. The European Medicines Agency and the U.S. Food and Drug Administration are reviewing the drug after the European regulator said Jan. 20 it found 11 deaths among patients using the treatment sold by the company’s partner Novartis AG.
Losses in S&P 500 futures suggest the U.S. equity benchmark may end its four-day winning streak. The index has gained 4.6 percent in 2012, the best start to a year since 1997, after companies from Goldman Sachs Group Inc. to Union Pacific Corp. and EBay Inc. topped analysts’ profit projections.
Oil declined as much as 1 percent. EU foreign ministers meeting today will probably agree that an embargo on Iranian oil should take effect in six months, according to diplomats with knowledge of the talks. Saudi Arabia has the capacity to make up for a shortfall in Iranian exports, according to the International Energy Agency and the Centre for Global Energy Studies.
Copper, Wheat
Copper erased early gains, retreating 0.2 percent to $8,205 a metric ton on the London Metal Exchange. Silver for immediate delivery climbed for a sixth day, gaining as much as 1 percent to $32.51 an ounce, the highest since Dec. 8.
Wheat futures for March delivery rose 0.7 percent to $6.1475 a bushel on the Chicago Board of Trade. Corn gained 0.9 percent to $6.1675 a bushel. U.S. exporter sales of corn more than doubled to 759,899 tons in the week ended Jan. 12 from a week earlier, according to government data released on Jan. 20. Wheat sales climbed 33 percent.
The cost of insuring bonds in Japan against non-payment decreased, according to credit-default swap traders. The Markit iTraxx Japan index declined 1.5 basis points to 174.5, Deutsche Bank AG prices show. That’s on course for its lowest level since Nov. 4, according to CMA, which is owned by CME Group Inc., and compiles prices quoted by dealers in the privately negotiated market.
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: Rocky Swift at rswift5@bloomberg.net
