BLBG:Europe Stocks, Oil Slide On Debt Crisis Before EU Summit
European stocks and commodities fell, while the Dollar Index rose to a 20-month high as speculation grew the region’s debt crisis is worsening and data showed Japan’s exports grew slower than estimated. German bonds snapped three days of losses.
The Stoxx Europe 600 Index declined 0.9 percent as of 8:05 a.m. in London. Contracts on the Standard & Poor’s 500 Index slid 0.3 percent. The MSCI Asia Pacific Index (MXAP) lost 1.6 percent, erasing a two-day, 1.1 percent rally. The Dollar Index advanced 0.2 percent. The yen rose against its major peers. Oil fell 0.9 percent while gold lost 0.8 percent and copper sank 1.2 percent. German 10-year bond yields dropped three basis points to 1.44 percent before a sale of June 2014 notes.
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 a 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
Spain’s 10-year government bond yield climbed four basis points, or 0.04 percentage point, to 6.12 percent. Spain’s Prime Minister Mariano Rajoy will ask the European Central Bank to buy Spanish debt at today’s EU summit, El Mundo reported. In Italy, the yield similar-maturity notes increased five basis points to 5.62 percent.
Almost seven stocks fell for each one that gained on the MSCI Asia Pacific Index. A gauge of technology-related companies fell 2.2 percent, the most among the MSCI benchmark’s 10 groups, after Dell Inc. forecast fiscal second-quarter revenue that missed analysts’ estimates. Compal Electronics Inc. (2324), a laptop maker for Dell, sank 2.5 percent in Taipei, while Wistron Corp. slid 3.1 percent.
Hong Kong’s Hang Seng Index declined 1.5 percent, Australia’s S&P/ASX 200 fell 1.3 percent and the Nikkei 225 Stock Average slumped 2 percent. Myer Holdings Ltd. (MYR), Australia’s largest department-store chain, tumbled 7.8 percent in Sydney 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.
Aussie, Kiwi
Japan’s currency rallied 0.5 percent to 79.53 per dollar after the central bank didn’t expand its asset-purchase program, leaving its funds at 40 trillion yen ($503 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.
The Australian dollar weakened 0.4 percent to 97.75 cents after touching a six-month low of 97.42. The New Zealand dollar reached 74.89 cents, the lowest level since Dec. 15. South Korea’s won closed 0.8 percent weaker at 1,172.73 per dollar.
The Standard & Poor’s GSCI Spot Index, which tracks 24 raw materials, lost 0.8 percent to a six-month low. Silver, platinum and palladium declined, along with base metals including 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.
To contact the reporters on this story: David Yong in Singapore at dyong@bloomberg.net; Susan Li in Hong Kong at sli31@bloomberg.net
To contact the editor responsible for this story: Richard Dobson at rdobson4@bloomberg.net
