BLBG:Asian Stocks, Euro Fall On Greece Exit Concerns
Asian stocks and commodities fell, while the Dollar Index rose to a 20-month high as speculation increased that Greece will leave the euro and data showed slower-than-estimated export growth in Japan. The yen gained after the Bank of Japan refrained from adding monetary stimulus.
The MSCI Asia Pacific Index (MXAP) dropped 1.8 percent by 2:33 p.m. in Tokyo, erasing gains in the past two days. Standard & Poor’s 500 Index futures lost 0.6 percent. The Dollar index advanced 0.2 percent. The yen climbed against all of its major counterparts, while the Australian and New Zealand currencies dropped to the lowest levels this year. Gold and oil both fell 0.6 percent and copper declined 1.2 percent.
Greece’s former Prime Minister Lucas Papademos said that while it is unlikely the nation will leave the euro, it’s still a risk, according to a report in the Wall Street Journal yesterday. European leaders are meeting in Brussels today to discuss the region’s debt crisis that has wiped more than $4 trillion from equity markets worldwide this month. Japan’s exports in April trailed economists’ estimates, underscoring the risk that weakness in global demand may limit the rebound in the world’s third-biggest economy.
“Conditions remain very fragile,” said Daphne Roth, the head of Asian-equity research at ABN Amro Private Banking in Singapore, which manages about $217 billion for clients globally. “There is a strong likelihood that Greece might exit the euro zone. Even if it stays, going forward there will be a lot of volatility,” she said in a Bloomberg Television interview.
Technology Stocks
Five stocks fell for every one that gained on the MSCI Asia Pacific Index. Technology-related companies fell 1.9 percent, leading losses in all 10 groups in the equity benchmark after Dell Inc. forecast fiscal second-quarter revenue that missed analysts’ estimates. Compal Electronics Inc. (2324), a laptop maker for Dell, sank 2 percent to NT$31.35 in Taipei. Wistron Corp. slid 2.9 percent to NT$39.85.
Hong Kong’s Hang Seng Index declined 1.8 percent, Australia’s S&P/ASX 200 fell 1 percent and the Nikkei 225 Stock Average slumped 1.8 percent. Myer Holdings Ltd. (MYR), Australia’s largest department-store chain, tumbled 6.7 percent in Sydney trading after cutting its profit forecast.
In Japan, exports grew 7.9 percent last month from a year earlier, compared with the median estimate for an 11.8 percent gain in a Bloomberg News survey. Fitch Ratings cut the nation’s rating to A+ yesterday with negative outlook, citing “high and rising public debt” burden.
Japan’s currency gained 0.4 percent to 79.64 per dollar after the central bank didn’t expand its asset-purchase program, leaving the fund at 40 trillion yen ($502 billion) and a credit- lending program at 30 trillion yen. All 14 economists surveyed by Bloomberg News forecast that outcome. The policy board kept the key overnight lending rate between zero and 0.1 percent.
Aussie, Kiwi
The Australian dollar weakened 0.4 percent to 97.72 cents after touching a six-month low of 97.42. The New Zealand dollar reached 74.89 cents, the lowest since Dec. 15. South Korea’s won retreated 0.7 percent to 1,171.55 per dollar.
The Standard & Poor’s GSCI Spot Index, which tracks 24 raw materials, lost as much as 0.6 percent to reach the lowest level since Dec. 20. Silver, platinum and palladium declined along with base metals including copper, zinc and lead, on concern Europe’s debt crisis may hurt global growth and sap demand. Cotton tumbled to the lowest level in more than two years and soybeans slid to the lowest price since March 30.
The cost of insuring Asia-Pacific corporate and sovereign bonds from default rose, according to traders of credit-default swaps. The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan advanced 5.5 basis points to 198 basis points, Credit Agricole SA prices show. The index reached a four-month high of 200.3 on May 18, according to data provider CMA.
To contact the reporter on this story: David Yong in Singapore at dyong@bloomberg.net
To contact the editor responsible for this story: Richard Dobson at rdobson4@bloomberg.net
