BLBG:Stocks, Commodities Drop on Europe Debt Discord, Economy
Stocks (MXWD) fell and commodities dropped for the first time in three days as European leaders clashed on ways to stem the debt crisis and reports from China and Germany signaled the slowdown is deepening. The euro weakened and Italian bonds declined, while Treasuries rose.
The MSCI All-Country World Index lost 0.4 percent at 6:40 a.m. in New York. Standard & Poor’s 500 Index futures slid 0.4 percent. The S&P GSCI gauge of 24 commodities retreated 1.1 percent as oil slumped 1.4 percent. The euro fell to the lowest in more than a week against the yen. Italy’s 10-year bonds dropped a third day, pushing the yield seven basis points higher to 5.12 percent. Ten-year Treasury notes gained for a sixth day.
Chancellor Angela Merkel and President Francois Hollande disagreed on a timetable for starting joint oversight of Europe’s banking sector. German business confidence unexpectedly fell in September, the Ifo institute in Munich said. China’s manufacturers and retailers are less optimistic about sales than they were three months ago and are cutting jobs, according to the findings of a survey by New York-based researcher CBB International LLC.
“A period of consolidation in the month ahead looks the more likely outcome,” said George Boubouras, Melbourne-based head of investment strategy at UBS AG’s Australian wealth management unit. The Swiss bank has about $1.5 trillion in assets under management. “In Europe, there will continue to be some lingering challenges.”
Fugro Rallies
The Stoxx Europe 600 Index declined 0.6 percent. The gauge, which is trading near its highest price-to-estimated-earnings ratio since 2010, has still surged 17 percent from this year’s low in June as the European Central Bank and the Federal Reserve introduced new bond-buying programs.
CGGVeritas declined 7.3 percent after the world’s largest surveyor of oilfields agreed to buy Fugro (FUR) NV’s seismic division for 1.2 billion euros ($1.6 billion). Fugro jumped 3 percent, the most in three months, in Amsterdam. QinetiQ Plc, the military researcher split off from the U.K. Ministry of Defense, jumped 5.6 percent after saying its performance in the first half was stronger than forecast.
The decline in S&P 500 futures indicated the U.S. gauge will extend last week’s 0.4 percent drop.
The euro dropped as much as 0.8 percent to 100.61 yen, the least since Sept. 14, and was last at 100.76 yen. The 17-nation shared currency dropped 0.5 percent to $1.2912.
Aussie Slides
Australia’s dollar weakened 0.6 percent to $1.0399 and slid 0.7 percent versus the yen. New Zealand’s currency declined 0.9 percent to 82.14 U.S. cents.
The yield on 10-year Treasuries slipped three basis points to 1.72 percent, while rates on German bunds of similar maturity declined four basis points to 1.56 percent.
Crude in New York slipped to $91.64 a barrel and copper declined 1 percent. Arabica coffee dropped 2.3 percent after rising 2.8 percent on Sept. 21.
The MSCI Emerging Markets Index (MXEF) dropped 0.4 percent. The Hang Seng China Enterprises Index of mainland companies traded in Hong Kong slipped 0.4 percent. PT Bumi Resources (BUMI) tumbled 19 percent leading Indonesian stocks lower after a shareholder started a probe into the company’s finances. Vietnam’s VN Index sank 1.3 percent after inflation quickened for the first time in more than a year. Russia’s Micex Index retreated 0.9 percent and India’s Sensex lost 0.4 percent.
To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Jason Clenfield in Tokyo at jclenfield@bloomberg.net
To contact the editor responsible for this story: Stuart Wallace at Swallace6@bloomberg.net
