BLBG:Euro Weakens, Asian Stocks Decline as Greek Debt Talks Falter
The euro weakened and Asian stocks dropped for a second day after European finance ministers failed to agree on a debt-reduction package for Greece. Treasuries and the dollar rose, while copper led industrial metals lower.
The euro declined 0.5 percent to $1.2749 as of 1:58 p.m. in Tokyo. The MSCI Asia Pacific Index (MXAP) fell 0.2 percent, erasing a gain of as much as 0.5 percent. Standard & Poor’s 500 Index futures slid 0.6 percent. Treasury 10-year yields decreased two basis points to 1.65 percent. The dollar rose against all 16 of its major counterparts. Copper retreated 1.1 percent in London, pacing losses by industrial metals.
More than 11 hours of talks broke up today in Brussels with praise for Greece’s economic overhaul and a declaration that an accord on the financing package will wait at least until a ministerial meeting on Nov. 26. Japan’s exports fell for a fifth month, pushing the third-largest economy closer to recession. Asian stocks rose earlier as an increase in U.S. housing starts added to signs the world’s largest economy is recovering.
“It’s been a bumpy road when it comes to the Eurozone,” Chu Moon Sung, a Seoul-based fund manager at Shinhan BNP Paribas Asset Management Co., which oversees about $31 billion, said by phone today. “This should create uncertainty for a while and temper risk appetite a bit, though it won’t mean a downward trend sets in.”
Gauges tracking commodity and energy producers led losses on the Asia-Pacific equities gauge, as five companies declined for every four that rose. South Korea’s Kospi index dropped 0.4 percent. The Nikkei 225 Stock Average added 0.3 percent, trimming an advance of as much as 1.2 percent.
Greek Talks
European finance chiefs failed to agree on a package for Greece after battling with the International Monetary Fund over how to nurse the recession-wracked country back to fiscal health.
With creditors led by Germany refusing to put up fresh money or offer debt relief, the ministers were unable to scrounge together enough funds from other sources to help alleviate Greece’s debt burden, set to hit 190 percent of gross domestic product in 2014.
The officials “made progress in identifying a consistent package of credible initiatives aimed at making a further substantial contribution to the sustainability of Greek government debt,” Luxembourg Prime Minister Jean-Claude Juncker said in a statement after chairing the meeting.
HP Charge
The decline in S&P 500 futures comes after the gauge closed little changed yesterday. Hewlett-Packard Co. (HPQ) fell 12 percent as it announced a charge of $8.8 billion linked to its Autonomy Corp. business, saying there were “accounting improprieties” before its takeover of the company. U.S. markets will be closed for the Thanksgiving holiday tomorrow.
The Dollar Index rose 0.3 percent. The yen weakened 0.2 percent to 81.83 per dollar, heading for its weakest level since April 6.
Japan’s exports fell 6.5 percent in October from a year earlier, leaving a trade deficit of 549 billion yen ($6.7 billion), the Finance Ministry said today. Economists estimated a 4.9 percent decline in exports. Imports dropped 1.6 percent.
Copper for delivery in three months slumped 1.1 percent to $7,700 a metric ton. Nickel slid 1.4 percent and tin lost 0.8 percent.
Oil for January delivery erased gains to trade little changed at $86.76 in New York. Crude rose 0.8 percent earlier as the American Petroleum Institute said crude inventories slid 1.9 million barrels last week.
Secretary of State Hillary Clinton will shuttle today through Jerusalem, the West Bank and Cairo in a bid to salvage a proposed cease-fire intended to halt a weeklong torrent of Palestinian rockets and Israel air strikes.
U.S. Property
In the U.S., housing starts rose 3.6 percent to an 894,000 annual rate, the fastest since July 2008, Commerce Department figures showed. The median forecast of 82 economists called for an 840,000 pace. Permits for the construction of single-family homes also advanced to the highest in four years.
The Thomson Reuters/University of Michigan consumer sentiment index probably rose to 84.5 in November from 82.6 in October, according to a Bloomberg survey of economists before the report is released at 9:55 a.m. New York-time. The group issued a preliminary number of 84.9 earlier this month. The index hasn’t been higher than 84 since July 2007.
To contact the reporters on this story: Richard Frost in Hong Kong at rfrost4@bloomberg.net; Saeromi Shin in Seoul at sshin15@bloomberg.net
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net
