BLBG:Stocks, Oil Decline On U.S. Data As Indian Rupee Slumps
Stocks (MXWD) fell, oil declined and the Indian rupee slumped to a record low after reports signaled the U.S. recovery is slowing. Bond risk rose after Moody’s Investors Service cut credit ratings for 15 of the world’s biggest banks.
The Stoxx Europe 600 Index (SXXP) declined 0.8 percent as of 8:02 a.m. in London, while the MSCI Asia Pacific Index (MXAP) slumped 1.3 percent. Futures on the Standard & Poor’s 500 Index gained 0.2 percent, following a 2.2 percent slide on the gauge yesterday, the second biggest loss of 2012. Oil dropped 0.5 percent after plunging 4.4 percent a day earlier. The rupee weakened 1.8 percent and South Korea’s won dropped from a five-week high.
Moody’s cut ratings for Credit Suisse AG and 14 other banks, while the International Monetary Fund said Europe’s crisis has reached a “critical stage.” Data today will probably show German business confidence fell this month, following reports yesterday that U.S. manufacturing shrank and home sales declined.
“Things are still getting worse,” said Peter Elston, Singapore-based head of Asia-Pacific strategy at Aberdeen Asset Management Plc, which oversees about $270 billion. “When you have an essentially weak private sector, you’re relying on the government to step in and support things. You’re seeing a gradual weakening of the ability of governments to step in.”
MSCI Slides
The MSCI Asia Pacific Index has lost about 11 percent from this year’s highest level in February. Mining and energy shares led declines today on the gauge, which erasing gains for the week. BHP Billiton Ltd., Australia’s biggest oil producer, fell 2.2 percent.
South Korea’s Kospi Index slid 2.2 percent, the most among major regional benchmarks. Samsung Electronics Co. dropped 3.7 percent after JPMorgan Chase & Co. said Asia’s biggest producer of semiconductors and flat-screen televisions is likely to miss earnings estimates.
The Nikkei 225 (NKY) fell 0.3 percent, paring losses of as much as 1.1 percent. Mitsubishi UFJ Financial Group Inc., the country’s biggest bank, dropped 1.1 percent. Olympus Corp. gained 2.2 percent on a Nikkei newspaper report Sony Corp. is in final talks to invest in the scandal-hit optics maker.
Oil dropped after tumbling $3.25 yesterday to its lowest close since Oct. 4 on concern slower growth will cut fuel demand. Crude for August delivery fell as much as 26 cents to $77.94 a barrel today. Prices of the fuel have fallen 21 percent this year.
The Standard & Poor’s GSCI Spot Index of 24 raw materials fell 0.6 percent after dropping 2.8 percent a day earlier. The gauge has fallen more than 20 percent from this year’s peak, sending the measure of commodities into a bear market.
Rubber Slides
Rubber tumbled as much as 5.3 percent in Tokyo after Bridgestone Corp., the world’s biggest maker of tires, said it may extend output cuts in the second half as Europe’s debt crisis and China’s slowdown curb demand.
The dollar headed for a weekly gain against most of its major peers. The greenback traded at $1.2558 per euro, down 0.1 percent from yesterday, when it climbed 1.3 percent, the sharpest advance since Dec. 12. The yen fell against 14 of its 16 major counterparts.
Among emerging-market currencies, the won declined 0.5 percent to 1,157.25 after yesterday touching its strongest level since May 14. Indonesia’s rupiah slipped 0.5 percent to 9,478, while the rupee plunged to 57.30.
‘Pretty Dour’
“The news out of Europe remains pretty dour, despite the fact that we’ve had a bit of consolidation higher the last couple weeks,” Mike Moran, a currency strategist at Standard Chartered Bank, said in a telephone interview from New York. “That plays into a broadly risk-averse investor mindset, which has been helping the dollar.”
The cost of insuring bonds from default climbed, according to traders of credit-default swaps. The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan rose four basis points to 181 basis points, according to Credit Agricole SA. The gauge is set for its highest close since June 14, according to data provider CMA.
To contact the reporters on this story: Jason Clenfield in Tokyo at jclenfield@bloomberg.net; Adam Haigh in Sydney at ahaigh1@bloomberg.net
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net
