Asian Stocks, Metals Slump on Growth Outlook : Asian stocks slumped, with the region’s benchmark index set for the biggest drop in eight days, while metals declined and the won weakened amid signs the global recovery is faltering. The yen depreciated before a no- confidence vote against Japanese Prime Minister Naoto Kan.
The MSCI Asia Pacific Index lost 1.7 percent at 11:27 a.m. in Tokyo, set for the biggest loss since May 23. Standard & Poor’s 500 Index futures rose 0.1 percent, after the gauge sank yesterday the most since August. Nickel, lead and aluminumfell at least 1 percent in London. South Korea’s won snapped a five- day rally against the dollar while the yen slipped 0.3 percent versus the dollar and depreciated 0.5 percent against the euro.
Analysts cut their forecasts for U.S. payroll gains in May after a private report yesterday showed employers added 38,000 jobs, less than one-quarter of the median growth forecast by economists. Data today may show U.S. factory orders fell the most since October, while a separate report showed Japanese companies increased spending at a slower pace. Toyota Motor Corp. (7203) led Asian automakers lower after a decline in U.S. car sales.
“If you knock out employment gains, you really take back this idea that we’ve entered a sustainable recovery,” James Paulsen, chief investment strategist at Minneapolis-based Wells Capital Management, said in a Bloomberg Television interview. “If we’re no longer in a sustainable recovery, then investors get much more anxious.”
About eight shares declined for every one that gained on MSCI’s Asia Pacific Index, which was set for the steepest drop since May 23. Japan’s Nikkei 225 Stock Average slid 1.7 percent, poised for its biggest drop since March 15. Australia’s S&P/ASX 200 Index sank 1.8 percent and Hong Kong’s Hang Seng Index slipped 1.6 percent.
Toyota, Acer
Toyota tumbled 3.3 percent, the biggest drag on MSCI’s Asian index. Acer Inc. (2353), the world’s second-largest supplier of notebook computers, plunged 6.4 percent after the company said it will cut 300 jobs in Europe, the Middle East and North Africa and will book a one-time $150 million operating loss. Commodity and energy producers retreated, led by BHP Billiton Ltd. (BHP)’s 2 percent drop.
U.S. shares slumped yesterday, dragging the S&P 500 Index down by 2.3 percent, the steepest loss since Aug. 11. Treasuries rallied yesterday, pushing 10-year yields below 3 percent for the first time in 2011. The rate rebounded two basis points to 2.96 percent today on speculation that the recent drop was excessive.
Government data on June 3 will probably show a 170,000 gain in U.S. payrolls following a 244,000 April increase, according to a Bloomberg survey. Economists in the survey had predicted an increase of 185,000 before yesterday’s jobs report from ADP Employer Services.
Manufacturing
Data yesterday also showed the Institute for Supply Management’s factory index fell to 53.5 in May from 60.4 the prior month. Economists projected the gauge would drop to 57.1, according to the median forecast in a Bloomberg News survey. Factory orders likely fell 1 percent in April after gaining 3 percent the previous month, according to a survey before today’s Commerce Department report.
Nickel for three-month delivery dropped 1 percent to $23,010 a metric ton on the London Metal Exchange. Aluminum fell 1.3 percent and lead lost 1.1 percent. Oil for July delivery declined as much as 0.7 percent to $99.62 a barrel on the New York Mercantile Exchange, following a 2.4 percent slump yesterday, when the industry-funded American Petroleum Institute said U.S. stockpiles climbed 3.5 million barrels last week, the most in more than a month.
No Confidence
The yen weakened against 15 of its 16 most-active peers and traded at 81.15 per dollar from 82.83 in New York yesterday, when it jumped 0.7 percent. Kan faces a no-confidence motion today that could attract enough support within his Democratic Party of Japan to pass, requiring him either to call new elections or resign within 10 days.
“There’s a bit of a political risk premium being placed in Japan,” said Sue Trinh, a senior currency strategist at Royal Bank of Canada in Hong Kong. “There’s some yen weakness being attributed to that.”
Japanese capital spending excluding software rose 4.2 percent in the three months ended March 31 from a year earlier, after increasing 4.8 percent in the previous quarter, the Ministry of Finance said today. Yields on 10-year Japanese bonds slid two basis points to 1.16 percent.
The euro climbed to 116.55 yen, rebounding from yesterday’s 1.2 percent drop, and added 0.2 percent to $1.4361. Europe’s 17- nation currency fell yesterday after Moody’s Investors Service downgraded Greece’s local and foreign currency bond ratings to Caa1 from B1, putting it on par with Cuba. European officials are trying to prevent the region’s first sovereign default as investors dump Greek bonds on concern the government won’t be able to meet its obligations.
South Korea’s won fell 0.4 percent to 1,079.10 per dollar, declining for the first time since May 25. Malaysia’s ringgit slid 0.5 percent to 3.0215 per dollar.
The MSCI Asia Pacific Index lost 1.7 percent at 11:27 a.m. in Tokyo, set for the biggest loss since May 23. Standard & Poor’s 500 Index futures rose 0.1 percent, after the gauge sank yesterday the most since August. Nickel, lead and aluminumfell at least 1 percent in London. South Korea’s won snapped a five- day rally against the dollar while the yen slipped 0.3 percent versus the dollar and depreciated 0.5 percent against the euro.
Analysts cut their forecasts for U.S. payroll gains in May after a private report yesterday showed employers added 38,000 jobs, less than one-quarter of the median growth forecast by economists. Data today may show U.S. factory orders fell the most since October, while a separate report showed Japanese companies increased spending at a slower pace. Toyota Motor Corp. (7203) led Asian automakers lower after a decline in U.S. car sales.
“If you knock out employment gains, you really take back this idea that we’ve entered a sustainable recovery,” James Paulsen, chief investment strategist at Minneapolis-based Wells Capital Management, said in a Bloomberg Television interview. “If we’re no longer in a sustainable recovery, then investors get much more anxious.”
About eight shares declined for every one that gained on MSCI’s Asia Pacific Index, which was set for the steepest drop since May 23. Japan’s Nikkei 225 Stock Average slid 1.7 percent, poised for its biggest drop since March 15. Australia’s S&P/ASX 200 Index sank 1.8 percent and Hong Kong’s Hang Seng Index slipped 1.6 percent.
Toyota, Acer
Toyota tumbled 3.3 percent, the biggest drag on MSCI’s Asian index. Acer Inc. (2353), the world’s second-largest supplier of notebook computers, plunged 6.4 percent after the company said it will cut 300 jobs in Europe, the Middle East and North Africa and will book a one-time $150 million operating loss. Commodity and energy producers retreated, led by BHP Billiton Ltd. (BHP)’s 2 percent drop.
U.S. shares slumped yesterday, dragging the S&P 500 Index down by 2.3 percent, the steepest loss since Aug. 11. Treasuries rallied yesterday, pushing 10-year yields below 3 percent for the first time in 2011. The rate rebounded two basis points to 2.96 percent today on speculation that the recent drop was excessive.
Government data on June 3 will probably show a 170,000 gain in U.S. payrolls following a 244,000 April increase, according to a Bloomberg survey. Economists in the survey had predicted an increase of 185,000 before yesterday’s jobs report from ADP Employer Services.
Manufacturing
Data yesterday also showed the Institute for Supply Management’s factory index fell to 53.5 in May from 60.4 the prior month. Economists projected the gauge would drop to 57.1, according to the median forecast in a Bloomberg News survey. Factory orders likely fell 1 percent in April after gaining 3 percent the previous month, according to a survey before today’s Commerce Department report.
Nickel for three-month delivery dropped 1 percent to $23,010 a metric ton on the London Metal Exchange. Aluminum fell 1.3 percent and lead lost 1.1 percent. Oil for July delivery declined as much as 0.7 percent to $99.62 a barrel on the New York Mercantile Exchange, following a 2.4 percent slump yesterday, when the industry-funded American Petroleum Institute said U.S. stockpiles climbed 3.5 million barrels last week, the most in more than a month.
No Confidence
The yen weakened against 15 of its 16 most-active peers and traded at 81.15 per dollar from 82.83 in New York yesterday, when it jumped 0.7 percent. Kan faces a no-confidence motion today that could attract enough support within his Democratic Party of Japan to pass, requiring him either to call new elections or resign within 10 days.
“There’s a bit of a political risk premium being placed in Japan,” said Sue Trinh, a senior currency strategist at Royal Bank of Canada in Hong Kong. “There’s some yen weakness being attributed to that.”
Japanese capital spending excluding software rose 4.2 percent in the three months ended March 31 from a year earlier, after increasing 4.8 percent in the previous quarter, the Ministry of Finance said today. Yields on 10-year Japanese bonds slid two basis points to 1.16 percent.
The euro climbed to 116.55 yen, rebounding from yesterday’s 1.2 percent drop, and added 0.2 percent to $1.4361. Europe’s 17- nation currency fell yesterday after Moody’s Investors Service downgraded Greece’s local and foreign currency bond ratings to Caa1 from B1, putting it on par with Cuba. European officials are trying to prevent the region’s first sovereign default as investors dump Greek bonds on concern the government won’t be able to meet its obligations.
South Korea’s won fell 0.4 percent to 1,079.10 per dollar, declining for the first time since May 25. Malaysia’s ringgit slid 0.5 percent to 3.0215 per dollar.
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