SF: Japanese Stock Index Futures Drop After Quake as Euro Weakens
Dec. 7 (Bloomberg) -- Japanese stock futures fell after a an earthquake struck the country. The euro weakened as the Bundesbank cut its forecast for German growth and Standard & Poor’s 500 Index futures slipped before data on U.S. jobs.
Nikkei 225 Stock Average futures lost 0.6 percent at 10:10 a.m. in London after falling as much as 0.9 percent. The yen appreciated against 14 of its 16 major peers. The euro slid 0.3 percent to $1.2937 and German power prices dropped to a record low. S&P 500 futures lost 0.1 percent. The Stoxx Europe 600 Index was little changed after rising 0.3 percent earlier. The cost of insuring against a corporate default in Europe rose from the lowest level in almost two months.
A tsunami alert was issued after a magnitude 7.3 earthquake hit off northeastern Japan, the most powerful since last year’s record tremblor, causing buildings in Tokyo to sway. The Bundesbank lowered its 2013 projection for German economic growth to 0.4 percent from the 1.6 percent predicted in June a day after the European Central Bank cut its forecasts. A U.S. government report today is expected to show the smallest gains in hiring since June as hurricane Sandy hit the labor market, according to a Bloomberg survey of economists.
“The yen is being bought in a knee-jerk reaction to headlines on the earthquake,” said Marito Ueda, senior managing director in Tokyo at FX Prime Corp. “Given the difference in the magnitude of this earthquake to last year’s, the impact on the currency has been quite limited. If we confirm bigger damage from the tsunami, we may see further buying of the yen.”
U.S. Payrolls
The decline in U.S. futures indicated the S&P 500 will snap a two-day rally. Payrolls probably rose by 85,000 workers, the fewest since June, following a 171,000 increase in October, according to the median forecast of 90 economists surveyed by Bloomberg. The jobless rate may have held at 7.9 percent, the survey showed.
The Stoxx 600 has rallied 1.2 percent this week, climbing to the highest level in 18 months. Berkeley Group Holdings Plc surged 5.3 percent to a five-year high as the U.K.’s second- largest homebuilder by market value said first-half profit rose 45 percent. Deutsche Telekom AG, Germany’s biggest phone company, fell 3 percent after forecasting a lower dividend for the first time in three years.
The Markit iTraxx Crossover Index of credit-default swaps on 50 mostly junk-rated European companies rose six basis points to 481, up from the lowest since Oct. 17.
German Power
German power for 2013, the benchmark European electricity contract, fell to a record low of 45.75 euros a megawatt-hour, according to broker data compiled by Bloomberg. Prospects for weakening demand in Europe’s biggest economy, coupled with record-low costs for carbon dioxide emission permits, are driving prices lower for a fourth consecutive month.
Copper erased gains after the Japan earthquake and lead, used mostly in car batteries, was down 0.7 percent. Gasoline climbed 0.5 percent, leading gains in the S&P GSCI gauge of 24 commodities. Brent oil advanced 0.4 percent and soybeans rose 0.3 percent.
The MSCI Emerging Markets Index added less than 0.1 percent. The Shanghai Composite Index jumped 1.6 percent before data on Dec. 9 that may show China’s industrial production, retail sales and fixed asset investment gained in November, according to economists’ estimates. Benchmark gauges in Russia, India, South Africa and Poland fell at least 0.4 percent.
--With assistance from Mika Otsuka and Amina Mobley in Tokyo Paul Armstrong, Claudia Carpenter, Paul Dobson, Andrew Rummer and Steve Voss in London. Editors: Stephen Kirkland, Stuart Wallace
To contact the reporters 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 swallace@bloomberg.net
