Asian Stocks Drop as Japan Sentiment Sinks Amid Europe Pessimism (Source: Bloomberg)
Asian stocks (MXAP) fell for a third day after a survey showed sentiment among Japan’s largest manufacturers deteriorated and as growing funding stress in Italy stoked concern Europe is losing its fight to contain the debt crisis. Sony Corp., the maker of Bravia televisions that gets 21 percent of sales from Europe, slipped 1.7 percent in Tokyo after the euro touched a two-month low against the yen, reducing the value of sales from the region. Komatsu Ltd. (6301), a maker of construction equipment, sank 3 percent after the Bank of Japan released results of its Tankan survey. BHP Billiton Ltd. (BHP), the world’s largest mining company and Australia’s No. 1 oil producer, declined 1.7 percent in Sydney after oil and copper prices tumbled yesterday.
“There’s no visible progress on Europe’s debt crisis,” said Mitsushige Akino, who oversees about $600 million in Tokyo at Ichiyoshi Investment Management Co. “There are no events that may buoy the mood, and there’s no guarantee that the euro will stop weakening. The euro may drop below 100 yen, compounding the situation for export-related stocks.”
U.S. Stocks Fall on Concern Europe Struggling to Contain Crisis (Source: Bloomberg)
U.S. stocks retreated, sending the Standard & Poor’s 500 Index lower for a third straight day, as growing funding stress in Europe fueled concern the region is struggling to contain its sovereign debt crisis. Chevron Corp. (CVX) and Halliburton Co. (HAL) fell at least 2.8 percent as oil and metals declined. Joy Global Inc. slumped 11 percent after the maker of mining equipment said demand for commodities will remain slow. First Solar Inc. (FSLR), the largest maker of thin- film solar panels, plunged 21 percent after it cut estimates. Financial shares (S5FINL) in the S&P 500 rose 0.1 percent, rebounding from an earlier loss, as the Wall Street Journal reported that S&P has not informed France about an imminent downgrade. The S&P 500 declined 1.1 percent to 1,212.76 at 2:12 p.m. New York time. The benchmark measure for American equities has fallen 3.4 percent in three days. The Dow Jones Industrial Average lost 137.22 points, or 1.2 percent, to 11,817.72 today.
Japan Stocks Fall Third Day as Tankan Drops, Europe Debt Concerns Increase (Source: Bloomberg)
Dec. 15 (Bloomberg) -- Japanese stocks fell for a third day after manufacturing sentiment worsened and rising financing costs fueled concern Europe is losing its fight against the debt crisis. Mitsui O.S.K. Lines Ltd. led declines among Japan’s largest shipping companies, dropping 4.8 percent. Sony Corp. (6758), which depends on Europe for about a fifth of its sales, fell 1.5 percent after a slide in the euro hurt the earnings outlook. Olympus Corp. plunged as much as 20 percent after restated earnings reports showed the camera-maker had inflated assets by $1.3 billion. The Nikkei 225 Stock Average (NKY) fell 1.2 percent to 8,410.58 as of 10:06 a.m. in Tokyo. The broader Topix index dropped 1.1 percent to 728.97 after the central bank’s Tankan survey showed Europe’s debt crisis and yen appreciation are impeding the Japan’s recovery from the March earthquake disaster.
European Stocks Drop as Fed Refrains From Further Stimulus; Logica Plunges (Source: Bloomberg)
European stocks declined, with the benchmark Stoxx Europe 600 Index falling to its lowest level in two weeks, as the Federal Reserve refrained from taking new action to bolster the world’s largest economy. Rio Tinto Group and Eurasian Natural Resources Corp. paced a selloff in mining companies, both falling more than 4.5 percent as copper slid. Logica Plc tumbled 16 percent after the Anglo-Dutch computer services provider cut its forecast for sales growth this year. Bayerische Motoren Werke AG (BMW), the biggest maker of luxury cars, and Volkswagen AG (VOW), the maker of Audi vehicles, fell at least 4.5 percent. The Stoxx 600 plunged 2.1 percent to 232.44 at the close after the Fed failed to signal a third round of asset purchases known as quantitative easing, or QE3, following its meeting yesterday. The Stoxx 600 has retreated 16 percent this year as the euro area’s sovereign-debt crisis spread to the region’s larger economies.
Chow Tai Fook Drops in H.K. Debut After $2B IPO (Source: Bloomberg)
Chow Tai Fook Jewellery Group Ltd., a Hong Kong-based chain with revenue greater than Tiffany & Co. (TIF), fell on its first trading day in the city after raising HK$15.8 billion ($2 billion) in a share sale. Chow Tai Fook slid as much as 8.9 percent to HK$13.66 before trading at HK$13.86 as of 9:35 a.m., compared with its initial public offering price of HK$15, the bottom of a marketed range. The company got net proceeds of HK$15.3 billion through the city’s second-biggest IPO this year. The jeweler with more than 1,300 outlets in mainland China is among companies that priced their stock offerings at or near the low end of marketed ranges as stocks have tumbled in Hong Kong (HSCI) amid concerns about Europe’s debt crisis. New China Life Insurance Co. priced its $1.9 billion Hong Kong and Shanghai IPO near the bottom of price ranges, and Haitong Securities Co. scrapped a planned offering in the city.
Skills ‘Mismatch’ Hurts Unemployed in U.S. as Job Openings Grow: Economy (Source: Bloomberg)
Federal Reserve policy makers yesterday said that while the American job market shows signs of improving, they are still concerned with the “elevated” level of unemployment. One reason may be because employers can’t find qualified help, according to economists like Dean Maki. The number of positions waiting to be filled this year has climbed to levels last seen in 2008, when the jobless rate was around 6 percent. The housing bust and ensuing financial crisis put people out of work whose skills may not correspond with those needed by the health-care providers and engineering firms where jobs go wanting. “What’s going on here is a mismatch of the skills of the unemployed and at least some of the positions that are becoming available,” Maki, chief U.S. economist at Barclays Capital in New York, said in an interview. “This seems to be slowing the pace of filling those job openings.”
Treasuries Snap Three-day Advance Before Regional Manufacturing Reports (Source: Bloomberg)
Treasuries snapped a three-day gain before U.S. central bank reports on manufacturing that economists said will provide evidence that the economy is strong enough to avoid a recession. The U.S. is scheduled to sell $12 billion of five-year Treasury Inflation Protected Securities today in the last of four auctions of coupon-bearing debt this week. Industrial production increased 0.1 percent in November after rising 0.7 percent in October, according to the median forecast of economists surveyed by Bloomberg News. Manufacturing in the New York and Philadelphia regions picked up in December, regional reports may also show, based on separate surveys. “There’s no recession,” said Hideo Shimomura, who helps oversee the equivalent of $76.8 billion as chief fund investor at Mitsubishi UFJ Asset Management Co. in Tokyo, a unit of Japan’s biggest publicly traded bank. “Yields are going to rise in the next quarter.”
China Property Executives Buy Most Stock Since 2008 as Curbs Damp Values (Source: Bloomberg)
Executives of Chinese developers including Shimao Property Holdings Ltd. (813) and Glorious Property Holdings Ltd. (845) are buying the most stock in their companies since at least 2008, betting the government will ease curbs on the property market that had depressed the shares. Shimao’s billionaire Chairman Hui Wingmau bought 11 million shares in November, bringing the total this year to 82 million, the most since 2008, according to data compiled by Bloomberg. Glorious Chairman Zhang Zhirong, with a $5.4 billion net worth according to Forbes, purchased a record 119 million shares through 11 transactions, mostly in September, the data show.
Glorious, Shimao and KWG Property Holdings Ltd. (1813), whose executives also have been buying stock, lost half their values in 2011 as the government tightened mortgage requirements and introduced limits on properties owned to prevent an asset bubble. China this month cut the amount of cash banks must set aside as reserves for the first time in three years to prevent a bubble.
China to Impose Anti-Dumping Duties on GM, U.S. Cars (Source: Bloomberg)
China announced plans to impose anti-dumping duties on some vehicles imported from the U.S. after failing to block a U.S. tariff on Chinese tires. Punitive duties will be as high as 12.9 percent for autos from General Motors Co. (GM) and 8.8 percent for Chrysler Group LLC, China’s commerce ministry said today on its website. The U.S. units of Bayerische Motoren Werke AG (BMW) and Daimler AG (DAI) will face duties of 2 percent and 2.7 percent respectively, it said. “The move shows that China is always capable of intervening politically in its markets,” said Juergen Pieper, a Frankfurt-based analyst with Bankhaus Metzler. “The automobile industry is very dependent on China for growth, and there’s doubts about the pace of future expansion.”
Japan Manufacturing Slides as Europe Crisis Hurts Demand (Source: Bloomberg)
Sentiment among Japan’s largest manufacturers deteriorated more than economists expected, underscoring the fragility of a post-quake recovery. The Tankan large manufacturer index fell to minus 4 from 2, the Bank of Japan (8301) said today in Tokyo. The median estimate of 24 economists surveyed by Bloomberg News was for a reading of minus 2. A negative number indicates that pessimists outnumber optimists. Executives said their sentiment will worsen further into 2012 as an appreciating currency and Europe’s debt crisis threaten profits at companies from Toyota Motor Corp. (7203) to TDK Corp. (6762) Half of the analysts in a Bloomberg News survey forecast that the economy will contract this quarter, bolstering the case for more stimulus from the central bank.
“This clearly shows that the economy is getting worse and it was surprising to see that the outlook is bleaker,” said Hideo Kumano, chief economist at Dai-Ichi Life Research Institute in Tokyo and a former BOJ official. “If sentiment keeps worsening and raises the chance of Japan falling into a recession, the BOJ will have to take more decisive action rather than simply buying more assets.”
No Surrender on India Retail Initiative: Singh (Source: Bloomberg)
India’s Prime Minister Manmohan Singh pledged to overcome opposition to opening the country’s retail industry to companies like Wal-Mart Stores Inc. (WMT), saying his two-decade reform agenda is the best way of reviving the slowest economic growth in two years. In an interview in his office at Parliament House in New Delhi, Singh said he’ll succeed in letting foreign companies buy majority stakes in Indian retailers after contesting regional elections early next year and as slower inflation bolsters support for his administration. He said he underestimated the opposition that derailed the plan a week ago and sent the benchmark stock index to its biggest three-day drop since July 2009.
“There was inadequate preparation and some partners in the coalition developed cold feet,” Singh said in the interview yesterday covering subjects from his legacy to the losses suffered by Kingfisher Airlines Ltd. “But I can assure you, India remains committed to a system of regulation that is supportive of enterprise and we will do everything to encourage foreign investment.”
Euro Trades Near 11-Month Low Before Spain Bond Sale, German Manufacturing (Source: Bloomberg)
The euro traded 0.3 percent from the weakest level in 11 months as Spain prepares to sell bonds amid concern Europe’s policy makers are struggling to stem the region’s debt crisis. The 17-nation euro was near the lowest level in 10 weeks against the yen before a report forecast to show Germany’s manufacturing industry contracted for a third-straight month, spurring concern that Europe’s fiscal problems will hamper growth in the region’s biggest economy. The dollar maintained gains against most major peers as Asian stocks dropped for a third day, extending a global decline in shares and bolstering demand for the world’s reserve currency as a refuge. “We’ve got a very negative view on growth for Europe next year,” said Robert Rennie, Sydney-based chief currency strategist at Westpac Banking Corp., Australia’s second-largest lender. Fiscal austerity and tightening financial conditions “will develop into a fully blown recession,” he said.
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