Global Stocks Drop 20% Into Bear Market (Bloomberg)
Stocks fell, pushing the MSCI All- Country World Index of 45 nations into a bear market for the first time in more than two years, after the worsening European debt crisis and threat of a U.S. recession erased more than $10 trillion from equities since May. The MSCI index, which slipped 0.3 percent as of 1:33 p.m. in Hong Kong today, has lost more than 20 percent since peaking on May 2, meeting the common definition of a bear market. It tumbled 4.5 percent to a 13-month low of 277.38 yesterday. The MSCI World (MXWO) Index of shares in developed nations also fell into a bear market yesterday, plunging 4.2 percent. The MSCI Emerging Markets Index reached the 20 percent threshold on Sept. 13.
The world is poised for a financial crisis, Mohamed El- Erian, chief executive officer of Pacific Investment Management Co., said in Washington yesterday. Finance chiefs from the Group of 20 nations pledged late yesterday to address “heightened downside risks” to the global economy, echoing language used by the Federal Reserve on Sept. 21 when it announced a $400 billion plan to spur growth as the recovery from the worst contraction since the Great Depression falters.
Asia stocks slide, euro gains after G20
SINGAPORE, Sept 23 (Reuters) - Asian stocks fell to a 16-month low and emerging market currencies tumbled amid fears of a global recession, but a pledge from the G20 to preserve financial stability helped stem the scale of losses.
"There is not much progress so far in Europe, and we are only hearing bad news on both the credit and economic fronts right now," said Hong Soon-pyo, a market analyst at Daishin Securities in Seoul.
European Stocks Fluctuate Near Two-Year Low; U.S. Index Futures Increase (Bloomberg)
European stocks fluctuated near a two-year low as a pledge from the Group of 20 to address risks to the economy offset a slide in commodity producers. U.S. futures gained while Asian shares fell. Adidas AG (ADS) climbed 2.6 percent after rival Nike Inc. raised its annual sales forecast and reported earnings that topped estimates. Rio Tinto Group led a retreat among raw-material producers as copper slumped. The Stoxx Europe 600 Index rose 0.2 percent to 215.23 at 9:01 a.m. in London after earlier falling 0.1 percent. The gauge plunged 4.6 percent yesterday. Futures on the Standard & Poor’s 500 Index gained 0.7 percent while the MSCI Asia Pacific Index retreated 1.1 percent.
China Stock Index Falls to 14-Month Low on Policy, Global Economic Outlook (Bloomberg)
China’s stocks fell, dragging the benchmark index to its lowest level in more than 14 months, as mounting concerns over the faltering global economy prompted speculation the government will take steps to support markets. Bank of Communications Co. dropped to the lowest level in almost seven weeks after the central bank asked lenders to maintain a stable loan-to-deposit ratio during public holidays next month. Gemdale Corp. (600383) lost 1.7 percent after the banking regulator was said to be looking into the financing of property developers through trust companies. The Shanghai Composite Index lost 0.4 percent to 2,433.16 at the 3 p.m. local-time close, the lowest level since July 16, 2010. The CSI 300 Index sank 0.6 percent to 2,669.48. The MSCI All-Country World Index of 45 nations entered a bear market yesterday for the first time in more than two years, after the European debt crisis and threat of a U.S. recession erased more than $10 trillion from equities since May.
Commodities Poised for Worst Week in 4 Months (Bloomberg)
Commodities were set for their worst week in more than four months as copper and tin tumbled on deepening concern that policy makers are running out of tools to avert another global recession, hurting demand for metals, fuel and food. Soybeans dropped. The Standard & Poor’s GSCI Index of 24 commodities lost as much as 0.9 percent to 602.28 before trading little changed at 608.30 by 3:59 p.m. in Seoul, bringing the week’s decline to 6.9 percent, the worst since May 6. The gauge is heading for its biggest quarterly loss since 2008. Copper fell to a more than one-year low and spot gold was set for its worst week since February 2009. Oil was poised for the biggest weekly drop in almost two months. “Markets latched onto the downbeat tone,” Natalie Robertson, a commodity analyst at Australia & New Zealand Banking Group Ltd., wrote in a report today. “Sentiment is bearish, so we can expect some more selling pressure unless policy circuit breakers are enacted.”
Deutsche Bank upbeat on gold, corn; cautious on oil
BEIJING, Sept 22 (Reuters) - Gold prices should continue to rise as investors seek safety from risky currencies, and corn is also likely to be the best performer among commodities in the next three to six months, a senior asset manager with Deutsche Bank said.
Theresa Gusman, global head of Deutsche Bank's RREEF Commodity Advisors who manages $4.5 billion in assets, saw commodity prices over a 12-month period average 6 to 8 percent above current levels, despite being cautious in the near term on industrial metals and energy-related products.
China's corn imports to surge, self-sufficiency policy hit
CHANGCHUN, China, Sept 22 (Reuters) - China's much-vaunted policy of self-sufficiency in corn production is under threat from scarce water supplies and shrinking farmlands, making imports inevitable in the face of rapidly growing demand, traders and officials said on Thursday.
China is the world's second largest corn consumer and producer, and it uses the grain largely for animal feed.
US wheat rebounds, corn firm on bargain hunting
SINGAPORE, Sept 23 (Reuters) - U.S. wheat rose more than 1 percent, while corn firmed as bargain hunting by end-users supported grains, which slid in the previous session to their lowest in more than two months amid recession fears.
"It is certainly going to start interest among consumers -- last night we saw Egyptians back in the market taking a big chunk of the Russian wheat once again," said Luke Mathews, commodities strategist at Commonwealth Bank of Australia in Sydney.
Argentina dryness seen hurting wheat; corn better
BUENOS AIRES, Sept 22 (Reuters) - Dry weather in Argentina has dimmed the outlook for 2011/12 wheat output although rains in recent days have allowed progress on delayed corn sowing, the government and a grains exchange said on Thursday.
Farmers in the South American country, a leading global wheat exporter and the No. 2 corn supplier, have dedicated almost 3 percent more land to wheat this season, according to Agriculture Ministry estimates.
Ghana Cocobod secures $2 bln for '11-12 cocoa buys
ACCRA, Sept 22 (Reuters) - Ghana cocoa regulator Cocobod has secured $2 billion from an oversubscribed loan facility to fund purchases for the 2011-12 cocoa season, it said in a statement on Thursday.
"Ghana Cocoa Board (COCOBOD) has signed a syndicated receivables-backed pre-export finance facility of $2 billion for the 2011/2012 crop season. The facility, which is the largest soft commodity deal in sub Saharan Africa, was once again oversubscribed by over 20 international and Ghanaian banks," it said.
Brazil soy growers start planting in isolated rain
SAO PAULO, Sept 22 (Reuters) - Brazilian soy farmers in the No. 1 growing state of Mato Grosso have begun planting the new crop after some isolated rains and predictions for more moisture to come in early October, forecasters Somar said Thursday.
The official planting season for soy started Sept. 15 in the state, but the weather has been widely dry over the center-west region that normally kicks off planting in Brazil.
Argentine gov't sees new wheat crop at 11-13 mln T
BUENOS AIRES, Sept 22 (Reuters) - Argentina's 2011/12 wheat crop is seen at between 11 million and 13 million tonnes, down from 14.7 million tonnes in the prior season, the Agriculture Ministry said in a monthly report on Thursday.
The government raised its forecast for 2010/11 corn output to a record 22.9 million tonnes from 21.9 million tonnes previously. It did not give an estimate for 2011/12 corn, which farmers are already seeding.
EU cleared 213,000 tonnes wheat exports this week
PARIS, Sept 22 (Reuters) - The European Union this week granted export licences for 213,000 tonnes of soft wheat, taking the total since the beginning of the 2011/12 (July-June) season to 3.1 million tonnes, official data showed on Thursday.
The export volume remained well below the level seen last season when 5.3 million tonnes of export licences were cleared by the same stage.
Bangladesh to buy wheat from Ukraine at $320/T
DHAKA, Sept 22 (Reuters) - Bangladesh will import 100,000 tonnes of wheat from Ukraine at $320 a tonne, including CIF, in its first government-to-government wheat deal with Kiev, a top procurement official said on Thursday.
"We have already signed the deal and shipment will start soon," Ahmed Hossain Khan, director general of the state grain buyer, told Reuters.
IGC cuts maize crop outlook, demand also trimmed
LONDON, Sept 22 (Reuters) - The International Grains Council on Thursday cut its forecast for global maize production in 2011/12, reflecting diminished prospects for the U.S. crop, but also trimmed the outlook for consumption as high prices begin to curtail demand.
"With international prices (for maize) likely to remain strong against a backdrop of tight U.S. supplies, growth in world demand will be lower than in recent years," the IGC said in a monthly update.
US wheat farmers on edge as Plains drought threatens
CHICAGO, Sept 22 (Reuters) - Winter wheat growers in the U.S. Plains hard red winter wheat growing region remain on edge as they seed the 2012 crop amid a devastating drought, an agricultural meteorologist said Thursday.
"There has been some rain over the last week that may get the crop out of the ground, but it will wither unless they get some more significant rains in October," said Andy Karst, meteorologist for World Weather Inc.
Kazakh grain crop could hit 25 mln T-AgMin official
ASTANA, Sept 22 (Reuters) - Kazakhstan's 2011 grain harvest could approach 25 million tonnes by bunker weight as good weather and better yields promise a record crop for the Central Asian state, an Agriculture Ministry official said on Thursday.
Kazakhstan, the world's seventh or eighth-largest wheat exporter in a typical season, will subsidise exports this season to regain a foothold in Black Sea markets and help clear a potential grain glut at home.
Brent crude above $106 as investors buy on dips
SINGAPORE, Sept 23 (Reuters) - Brent crude rose above $106 as investors took the opportunity to buy on the dip after a plunge in the previous session took prices to their lowest since early August.
"It is just a short-covering rally that we are seeing today," said Jonathan Barratt, managing director for Commodity Broking Services in Sydney. "Otherwise, the overall direction is weak. Oil has been moving in line with equities."
Syrian oil exports paralysed as sanctions bite
LONDON, Sept 22 (Reuters) - Syria's oil exports have come to a standstill due to sanctions and this may force a cut in production, weakening President Bashar al-Assad's ability to generate cash but not threatening his grip on power yet, traders and analysts say.
After a series of piecemeal measures, European governments have acted vigorously in recent weeks to tighten the screws on Assad in hopes of reining in his bloody crackdown on protesters, which has killed some 2,700 people in six months, the U.N. says.
Full Libyan oil output could be three years away
LONDON, Sept 22 (Reuters) - Oil, the lifeblood of the battered Libyan economy, is starting to trickle onto the world market as the country recovers from seven months of fighting, but it could take as long as three years to get back to pre-war output levels, analysts say.
Before the conflict, Libya turned out 1.6 million barrels per day (bpd) of high quality crude and the loss of that oil has helped keep oil prices at historically high levels with Brent crude above $100 per barrel for most of this year.
LME copper falls to 1-yr low as sell-off grows
MANILA, Sept 23 (Reuters) - London copper extended losses to hit its lowest in a year and is on course for its steepest weekly loss since December 2008 as a lethargic global economy fueled another round of selling.
"At this stage it's very sentiment driven, and sentiment right now is bearish. The market is focusing on the macroeconomic environment, which is not very positive," said Natalie Robertson, an analyst at Australia and New Zealand Bank.
Raw uranium stored near Libya's Sabha - IAEA
VIENNA, Sept 22 (Reuters) - The U.N. atomic agency said on Thursday that Libya's previous government had stored raw uranium near Sabha, after CNN reported that anti-Gaddafi forces had found a military site containing what appeared to be radioactive material.
The CNN report and the comment by the International Atomic Energy Agency seemed to contradict a U.S. statement last month that Libya's store of so-called yellow cake was held at the Tajura nuclear research facility near Tripoli.
Peru raises mining taxes to fund social programs
LIMA, Sept 22 (Reuters) - Peru's Congress raised taxes and royalties on the lucrative mining sector on Thursday, handing a legislative victory to leftist President Ollanta Humala after he campaigned on promises to ramp up welfare spending.
Humala, a former army officer, has said more must be done to fight poverty that still affects a third of Peruvians even though the Andean country's economy has surged for the last decade and is expected to grow 6 percent this year.
China unlikely to scrap minor metals duties -Antaike
STOCKHOLM, Sept 22 (Reuters) - China is unlikely soon to scrap high export duties on minor metals, including tungsten and molydenum, as they are strategic materials vital to its industry, said Xu Aihua, chief analyst at Chinese state-backed research body Antaike.
"Both minor metals are strategic metals so it is not likely that China will get rid of them," Xu told Reuters on Thursday on the sidelines of a China Metal Forum organised by Antaike and research body Raw Material Group.
Costly copper faces another year of strikes
LONDON, Sept 22 (Reuters) - Strikes could keep the heat under copper prices next year as workers, seeing mining companies reap fat profits from the expected high prices and tight market, try to rewrite expiring contracts.
A large number of wage contracts are due to expire between now and the end of next year at copper mines and plants in Chile, Canada and Peru, giving a hint of potential flashpoints.
Copper crashes to lowest since Sept 2010
LONDON, Sept 22 (Reuters) - Copper collapsed below $8,000 a tonne level on Thursday to hit one-year lows as economic fears escalated after news of manufacturing contraction in top consumer China combined with a grim outlook for the U.S. economy.
Other industrial metals followed, hitting 2011 lows. Aluminium touched $2,275.50 a tonne, zinc $1,987, lead $2,145, tin $19,700 and nickel $19,400 a tonne.
METALS-LME copper falls to 1-yr low as sell-off grows
MANILA, Sept 23 (Reuters) - London copper extended losses to hit its lowest in a year and is on course for its steepest weekly loss since December 2008 as a lethargic global economy fueled another round of selling.
"At this stage it's very sentiment driven, and sentiment right now is bearish. The market is focusing on the macroeconomic environment, which is not very positive," said Natalie Robertson, an analyst at Australia and New Zealand Bank.
PRECIOUS-Gold heads for third weekly drop on firm dollar
SINGAPORE, Sept 23 (Reuters) - Gold edged up 0.4 percent after the previous day's drop, but remains on track for a third straight week of decline as investors worried about grim global growth outlook piled into the dollar, which weighs on bullion prices.
"The dollar has strengthened in all of this and everyone is de-risking and putting money into the dollar because of the deteriorating economic outlook," said Soozhana Choi, head of commodity research in Asia at Deutsche Bank in Singapore.
Copper, Nickel, Tin Extend Tumbles in London on Debt, U.S. Growth Concerns
Copper dropped to the lowest in more than a year while nickel and tin plunged as the deepening European debt crisis and threat of a U.S. recession spurred investor concerns that demand for raw materials will slow. Copper for delivery in three months fell as much as 7.3 percent to $7,115.75 per metric ton on the London Metal Exchange, the lowest price since August 2010, before trading at $7,329.75 a ton by 3:56 p.m. in Singapore. The metal has lost 16 percent this week, the most since October 2008. Tin plunged as much as 14.3 percent to $17,000 a ton and nickel by as much as 11 percent to $16,800 a ton. The world is poised for a financial crisis, Mohamed El- Erian, chief executive officer of Pacific Investment Management Co., said in Washington yesterday. The Federal Reserve said Sept. 21 that there are “significant downside risks” in the U.S. economy, prompting the central bank to announce a $400 billion plan to spur growth as the recovery from the worst contraction since the Great Depression falters.
Gold heads for third weekly drop on firm dollar
SINGAPORE, Sept 23 (Reuters) - Gold edged up 0.4 percent after the previous day's drop, but remains on track for a third straight week of decline as investors worried about grim global growth outlook piled into the dollar, which weighs on bullion prices.
"The dollar has strengthened in all of this and everyone is de-risking and putting money into the dollar because of the deteriorating economic outlook," said Soozhana Choi, head of commodity research in Asia at Deutsche Bank in Singapore.
FOREX-Euro up on profit-taking; no surprise from G20
SINGAPORE, Sept 23 (Reuters) - The euro rose on profit-taking on Friday after slipping to an eight-month low the previous day, but its gains could prove fleeting after market players were unimpressed by a G20 pledge to preserve financial stability.
"There is nothing new, nothing substantial where we can grasp and say 'this is good, now we can put on some risk again.' I don't think it changes the bigger picture," said Jesper Bargmann, Asia head of G11 spot FX for RBS in Singapore.
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