20111130 1150 Global Market Related News.

Most Asian Stocks Decline as S&P Cuts U.S. Banks’ Credit Ratings (Source: Bloomberg)
Most Asian stocks (MXAP) fell after Standard & Poor’s cut credit ratings for lenders including Bank of America Corp., Goldman Sachs Group Inc. and Citigroup Inc. Sumitomo Mitsui Financial Group Inc. (8316) Japan’s second-biggest lenders by market value, fell 1.2 percent. Honda Motor Co., a Japanese carmaker that gets more than 80 percent of its sales abroad, slid 0.2 percent in Tokyo. BHP Billiton Ltd. (BHP), the largest global mining company, fell 0.5 percent in Sydney after metal prices declined. Japanese power producers advanced after the Nikkei newspaper said Kansai Electric Power Co. added 12 banks to its ranks of lenders. The MSCI Asia Pacific Index fell 0.1 percent to 113.07 as of 10:16 a.m. in Tokyo, headed for a 7.3 percent drop for the month. Six of 10 industry groups on the measure declined, with seven stocks retreating for each that advanced.

Stock Futures in U.S. Decline After Bank Ratings Cut by Standard & Poor’s (Source: Bloomberg)
U.S. stock futures fell, indicating the Standard & Poor’s 500 Index will end a two-day rally, after S&P cut credit ratings for lenders including Bank of America Corp. (BAC), Goldman Sachs Group Inc. (GS) and Citigroup Inc. (C). The Financial Select Sector SPDR Fund (XLF) lost 0.7 percent as Bank of America and Citigroup both slumped 0.6 percent. Goldman Sachs decreased 0.2 percent. Morgan Stanley (MS), which was also downgraded, retreated 1.1 percent as JPMorgan Chase & Co. dropped 0.2 percent. S&P 500 futures expiring in December declined 0.6 percent to 1,189.40 at 8:26 a.m. Tokyo time. Dow Jones Industrial Average futures slid 51 points, or 0.4 percent, to 11,514. “Banks are in a difficult position,” Matt McCormick, a money manager at Cincinnati-based Bahl & Gaynor Inc., which oversees $4.1 billion, said in a telephone interview. “There are so many unknowns for the industry, including Europe. The reward is not worth the risk right now.”

European Stocks Climb as Euro-Area Finance Ministers Meet on Debt Crisis (Source: Bloomberg)
European stocks advanced for a third day as euro-area finance ministers met to discuss insuring a portion of bonds issued by debt-stricken countries and U.S. consumer confidence unexpectedly rose in November. BASF SE and K+S AG pulled a gauge of chemical makers higher, rising more than 2 percent. IG Group Holdings Plc rallied the most since 2010. Colruyt SA, Belgium’s biggest discount-food retailer, plunged to a four-year low after reporting worse-than-estimated fiscal first-half profit. The Stoxx Europe 600 Index gained 0.8 percent to 231.68 at the close. The Stoxx 600 rallied 3.8 percent yesterday amid speculation the euro area’s policy makers are intensifying their efforts to contain the region’s debt crisis.

China Stocks Fall, Head for Monthly Drop as Export Slump May Hurt Economy (Source: Bloomberg)
China’s stocks fell for the first time in three days, driving the benchmark index towards a monthly loss, on concern exports and industrial output will slump as the economy slows and European demand falters. Baoshan Iron & Steel Co. (600019) and Anhui Conch Cement Co., the biggest makers of steel and cement, slid after Shenyin & Wanguo Securities Co. forecast the export growth rate will be halved this month. Jiangxi Copper Co. and Zhuzhou Smelter Group Co. paced a decline for metal producers after Morgan Stanley said further gains for commodities may be limited next year. Yanzhou Coal Mining Co. dropped 1 percent after BOC International cut its share-price estimate by 17 percent amid earnings concerns. “There’s a consensus view that economic growth will slow next year and companies related to investment will suffer,” said Dai Ming, fund manager at Shanghai Kingsun Investment Management & Consulting Co. “The key is whether the economy is poised for a soft landing as is expected by the market.”

Topix Declines First Time in Four Days After S&P Cuts Banks’ Ratings (Source: Bloomberg)
Japanese stocks fell, with the Topix index headed for its first drop in four days, after Standard & Poor’s cut credit ratings for U.S. lenders including Bank of America Corp. and a European official said the region’s bailout fund is falling short of its goal. Sumitomo Mitsui Financial Group Inc. (8316), the Japan’s No. 2 bank by market value, fell 1.5 percent. Sony Corp., the country’s biggest exporter of consumer electronics, lost 3 percent. Nippon Electric Glass Co. sank 4 percent after industry leader Corning Inc. cut its earnings forecast. Kawasaki Kisen Kaisha Ltd. (9107) and other shipping lines slid, ending a three-day streak of gains. The Topix lost 0.6 percent to 725.28 at the 11:30 a.m. trading break in Tokyo, with almost two stocks (TPX) falling for each that gained. The Nikkei 225 Stock Average (NKY) dropped 0.8 percent to 8,406.56. The gauge has declined 6.5 percent this month, erasing October’s gains, as signs emerged that Europe’s debt crisis is spreading to major economies.

U.S. Consumer Sentiment Tops Forecasts at Start of Holiday Season: Economy (Source: Bloomberg)
Consumer confidence snapped back more than forecast in November as Americans turned less pessimistic on the outlook for jobs and wages, one reason why spending has jumped at the start of the holiday season. The Conference Board’s index increased to 56 from a revised 40.9 reading in October, the biggest monthly gain since April 2003, figures from the New York-based private research group showed today. The gauge exceeded the most optimistic forecast in a Bloomberg News survey. The improvement in sentiment may help sustain household purchases, which account for about 70 percent of the economy, after sales climbed on Nov. 25 and Nov. 28, so-called Black Friday and Cyber Monday. Another report showing home prices continue to drop raises the risk that, without a pickup in hiring, consumers will retreat in early 2012.

Fed’s Lockhart Is ‘Skeptical’ More Bond-Buying Will Help Stimulate Economy (Source: Bloomberg)
Federal Reserve Bank of Atlanta President Dennis Lockhart said expanding securities purchases is unlikely to give a sufficient boost to U.S. growth, without ruling out the strategy or other easing options. “I am skeptical that further asset purchases will produce much gain in terms of increased economic activity,” Lockhart, who votes on monetary policy next year, said in a speech in Atlanta. “I don’t believe further bond purchasing by the Fed is a potent policy option given the set of circumstances we currently face.” Fed policy makers are discussing whether to increase record monetary stimulus through a third round of securities purchases or being more specific about how long interest rates will remain close to zero. Lockhart has supported the use of unconventional policy instruments in August and September to revive a recovery that has left the unemployment rate stuck near 9 percent or higher for more than 30 months.

Home Prices in 20 U.S. Cities Fall More Than Forecast, Case-Shiller Says (Source: Bloomberg)
Residential real estate prices dropped more than forecast in the year ended September, showing the industry at the center of the 2008 financial crisis continues to struggle. The S&P/Case-Shiller index of property values in 20 cities dropped 3.6 percent in September from the same month in 2010 after decreasing 3.8 percent in the year ended August, the group said today in New York. The median forecast of 32 economists in a Bloomberg News survey projected a 3 percent decrease. Unemployment at 9 percent, tight lending standards and a looming supply of distressed properties that may drag down home values further will probably keep hurting housing demand into next year. Sliding prices have left some people with loans that exceed the value of their properties, preventing them from boosting spending on other goods and services.

Goldman Ends Bet on China Stocks as Growth Estimates Cut by UBS, Citigroup (Source: Bloomberg)
Goldman Sachs Group Inc. said clients should exit a bet that Hong Kong-listed companies in China will gain as UBS AG and Citigroup Inc. cut growth forecasts for the world’s second-biggest economy. “We are closing our recommended long position in Chinese equities” after the trade lost 5 percent, Goldman analysts including Noah Weisberger wrote in an e-mailed report dated yesterday. In a Nov. 6 report, the analysts favored shares in the Hang Seng China Enterprises Index. (HSCEI). Premier Wen Jiabao’s crackdown on property speculation is damping home sales and construction just as Europe’s soveriegn- debt crisis threatens exports. The central bank triggered speculation that monetary policy may be further loosened to spur growth by allowing reserve requirements for some rural credit cooperatives to fall this month.

S&P Rates China Banks Higher Than U.S. Rivals (Source: Bloomberg)
Bank of China Ltd. and China Construction Bank Corp. (939) were upgraded by Standard & Poor’s after the ratings firm revised its criteria, giving the Chinese lenders higher grades than most of their largest U.S. rivals. Bank of China and Construction Bank were raised to A from A-, and Industrial & Commercial Bank of China (601398) Ltd.’s rating was maintained at A by S&P, according to a statement issued today. The changes reflect the “very high” likelihood of China’s government providing help for the lenders in the event of financial distress, S&P wrote in separate statements. Bank of America Corp., Goldman Sachs Group Inc. and Citigroup Inc. had their long-term credit ratings cut to A-, while UBS AG and Barclays Plc were downgraded to A and HSBC Holdings Plc to A+. The Chinese banks’ elevation underscores their turnaround since a decade-long overhaul of the state-run lenders that had cost the Asian nation $650 billion by 2008.

Japan Factory Output Rises 2.4% on Automakers (Source: Bloomberg)
Japan’s industrial production increased more than analysts expected in October, gains that may not be sustained as overseas demand cools. Factory output increased 2.4 percent from September, rebounding from a 3.3 percent drop, the trade ministry said in Tokyo today. The median estimate of 28 economists surveyed by Bloomberg News was for output to increase 1.1 percent. Manufacturers are contending with a yen near postwar highs against the dollar that has eroded profits and prompted Toyota Motor Corp. (7203) President Akio Toyoda to say this month that his company “will collapse” unless the currency weakens. Thailand’s worst flooding in almost 70 years has also caused parts shortages that may force companies to cut output.

South Korean Output Grows at the Slowest Pace Since August on Europe Woes (Source: Bloomberg)
South Korea’s industrial production rose in October at the slowest pace since August as Europe’s debt crisis and a global economic slowdown damped domestic and overseas demand. Output rose 6.2 percent from a year earlier after gaining a revised 6.9 percent in September, Statistics Korea said today. The median estimate of 14 economists in a Bloomberg News survey was for a 5.4 percent rise. Production fell 0.7 percent last month from September, when it expanded by revised 1.2 percent. Finance Minister Bahk Jae Wan said sustaining growth will be the government’s policy priority next year as the economy shows signs of slowing due to Europe’s financial woes and global weakness. The Bank of Korea refrained from raising interest rates for a fifth month on Nov. 11, pausing its fight against inflation to support the nation’s expansion.
“We’re bombarded with bad news from outside everyday and many economists are rushing to cut their growth forecasts,” Oh Suk Tae, an economist at SC First Bank Korea Ltd. in Seoul, said before the release. “We expect a further slowdown in GDP growth in the fourth quarter and the BOK may have to cut interest rates.”

ECB Fails to Attract Sufficient Bids to Mop Up Liquidity From Buying Bonds (Source: Bloomberg)
The European Central Bank failed to fully offset the extra liquidity created by its bond purchases for the first time in seven months, a sign of mounting tensions among euro-area banks. The Frankfurt-based ECB said today that 85 banks bid a total of 194.2 billion euros ($259 billion) for seven-day term deposits. It had aimed to drain 203.5 billion euros, the amount its bond purchases have created since the program began in May last year. It last fell short of its intended total on April 26. “It’s just another indication of how uncertain the situation is,” said Michael Schubert, an economist at Commerzbank AG in Frankfurt. “At the moment, banks are holding more cash than necessary. There’s a lot of caution.”

Euro-Region Economic Confidence Falls to Two-Year Low: Economy (Source: Bloomberg)
European confidence in the economic outlook dropped more than economists forecast in November as the 17-nation euro region edged closer to a recession and the fiscal crisis started to hit larger countries. An index of executive and consumer sentiment in the euro area fell to 93.7 from 94.8 in October, the European Commission in Brussels said today. That’s the lowest since November 2009. Economists forecast a drop to 93.9, the median of 31 estimates in a Bloomberg survey showed. Euro-area finance chiefs meeting in Brussels today are under increasing pressure to step up their crisis response as the two-year sovereign debt crisis spreads from the periphery to core countries, clouding growth prospects. Services and manufacturing contracted in November and the European Central Bank this month unexpectedly trimmed borrowing costs.

Euro Region’s Boost to Bailout Fund Falls Short of 1 Trillion-Euro Target (Source: Bloomberg)
Euro-area finance ministers approved enhancements to their bailout fund while backing off from setting a target for its firepower and seeking a greater role for the International Monetary Fund in fighting the debt crisis. The finance chiefs of the 17 nations using the euro agreed to work on boosting the resources of the IMF so it can “cooperate more closely” with the European Financial Stability Facility, Luxembourg’s Jean-Claude Juncker told reporters late yesterday in Brussels after leading the meeting. “It’s very important that the IMF globally will increase its resources either by raising its capital or by bilateral loans so that it can lend more money to euro-zone countries in need,” Dutch Finance Minister Jan Kees de Jager said in an interview with Bloomberg Television after the meeting. “If we open the IMF effort, that will be sufficient together with the leverage options in the EFSF.”

EFSF Gets Ministers’ Approval for Expansion (Source: Bloomberg)
Euro-area finance ministers approved enhancements to their bailout fund while backing off setting a target for how much firepower they plan to muster to stem a growing debt crisis. After a series of stop-gap accords failed to protect Italy and Spain from widening bond yield, the ministers met in Brussels under growing pressure from U.S. leaders and financial markets to find ways to boost the European Financial Stability Facility’s effectiveness. They agreed to create certificates that could guarantee up to 30 percent of new issues from troubled euro-area governments and to create investment vehicles that would boost the EFSF’s firepower to intervene in primary and secondary bond markets. “It’s impossible to give one number; it’s a process,” EFSF Chief Executive Officer Klaus Regling told a press conference in Brussels, backing off an earlier goal of 1 trillion euros ($1.3 trillion). “We will need money if countries make a request, and market conditions change over time.”

Hungary May Face More Rate Increases as Credit Downgrade Threatens Forint (Source: Bloomberg)
Hungarian interest rates may rise further from the European Union’s highest level as policy makers seek to protect the forint from the effects of the country’s debt being downgraded to junk, the central bank said. The Magyar Nemzeti Bank is ready to increase the two-week deposit rate after boosting it to 6.5 percent from 6 percent yesterday, central bank President Andras Simor told reporters in Budapest yesterday. Forward-rate agreements rose, indicating investor expectations for higher borrowing costs. The first rate increase since January failed to boost the forint, which fell to its weakest ever against the euro this month and helped push the government to seek international aid. Hungary losing its investment grade at Moody’s Investors Service tipped the scale for policy makers, who had balanced shielding the currency against slowing economic growth.

FOREX-Euro consolidates gains; yen edges lower
SINGAPORE, Nov 29 (Reuters) - The euro edged up against the dollar on Tuesday, consolidating the gains made the previous day on hopes that European officials will finally make some progress in tackling their debt crisis this week.
"We remain cautious as the market remains vulnerable to headline risk ahead, with the Eurogroup/Ecofin meetings taking place over the next two days," BNP Paribas analysts said.