20120216 0937 Global Market Related News.

Asia Stocks Fall on Bailout Delay Concern (Source: Bloomberg)
Asian stocks fell, with the regional benchmark index retreating from a six-month high, after a decision on a second bailout for Greece was postponed, rekindling concern that Europe’s sovereign-debt crisis will crimp global demand. Canon Inc. (7751), the world’s biggest camera maker that gets 32 percent of its revenue in Europe, fell 1.1 percent. Westpac Banking Corp. (WBC), Australia’s second-largest lender, fell 3.8 percent after reporting fist-quarter profit that was lower then a year earlier. BHP Billiton Ltd. (BHP), the world’s No. 1 mining company, lost 1.6 percent after metal prices dropped. The MSCI Asia Pacific Index dropped 0.7 percent to 126.48 as of 9:14 a.m. in Tokyo. The measure yesterday rose 1.9 percent to 127.34, the highest level since Aug. 4.

Japanese Stocks Decline as Greek Bailout Delay Sparks Debt Crisis Concern (Source: Bloomberg)
Japanese stocks fell for the first time in four days after European policy makers postponed a second bailout for Greece, reigniting concern the region’s debt crisis will hurt exporters’ earnings outlook. Kyocera Corp. (6971), an electronics maker that gets almost 20 percent of its sales in Europe, lost 1 percent. Mitsubishi UFJ Financial Group Inc. (8306), Japan’s top lender by market value, slid 1.2 percent. Olympus Corp. (7733), a camera maker still reeling from an accounting scandal, fell 1.3 percent on a report prosecutors will question former top executives. The Nikkei 225 Stock Average fell 0.2 percent to 9,245.37 as of 9:06 a.m. in Tokyo. The broader Topix Index lost 0.2 percent to 801.25, with twice as many shares declining as advancing.
“There’s a persistent concern that creditors may have to pardon parts of debt not only for Greece, but also for other southern European nations,” said Toshiaki Iwasaki, an analyst at Mito Securities Co. “Technical indicators show Japan’s stocks are being overbought, and we should see a sell-off as investors take profits.”

Stocks in U.S. Fall Amid Concern Greece May Be Closer to Default on Debt (Source: Bloomberg)
U.S. stocks fell, sending the Standard & Poor’s 500 Index lower for a second day, as concern grew that Greece was moving closer to default and the Federal Reserve said policy makers were divided on buying more assets. Apple Inc. (AAPL) decreased 2.3 percent, reversing a 3.3 percent rally and snapping an eight-day advance. Industrial shares had the biggest decline in the S&P 500 among 10 groups as Deere & Co. tumbled 5.4 percent after lowering its 2012 U.S. farmer revenue forecast. The Dow Jones Transportation Average, a proxy for the economy, slumped 2 percent as CSX Corp. (CSX) and Union Pacific Corp. (UNP) retreated more than 2.8 percent. The S&P 500 declined 0.5 percent to 1,343.23 at 4 p.m. New York time, reversing an earlier increase of as much as 0.4 percent. The Dow Jones Industrial Average decreased 97.33 points, or 0.8 percent, to 12,780.95 today.

European Stocks Advance on China Help; BNP, Heineken Gain After Earnings (Source: Bloomberg)
European stocks rose as China said it will help resolve the region’s debt crisis and companies from BNP Paribas SA (BNP) to Heineken (HEIA) NV reported earnings that beat analysts’ estimates. BNP Paribas, France’s largest bank, climbed 4.1 percent and and Heineken, the world’s third-biggest brewer, rose 3.7 percent. Clariant (CLN) AG advanced 5.7 percent after earnings exceeded projections and the chemical maker said it may sell its textile and paper units. The Stoxx Europe 600 Index added 0.6 percent to 264.16 at the close of trading, paring an earlier gain of 1 percent amid speculation a Greek aid package could be delayed until after April elections. The gauge has rallied 8 percent this year as U.S. economic data improved and optimism grew that the euro area will contain its sovereign-debt crisis.
“China has pledged to contribute to the bailout fund, which not only could increase the firepower available but might also persuade other countries like Japan, Russia, oil-rich states and possibly even the U.S. to actively take part in combating the crisis,” said Markus Huber, head of German sales trading at ETX Capital in London.

Emerging Market Stocks Climb Most in a Week on China’s Pledge to Europe (Source: Bloomberg)
Emerging-market stocks rose the most in a week after China said it will get more involved in resolving Europe’s debt crisis, boosting demand for riskier assets. The MSCI Emerging Markets Index (MXEF) advanced 1.1 percent to 1,058.47 at the close in New York, the most since Feb. 8. Russia’s Micex Index (INDEXCF) rose to a six-month high as OAO OGK-3 surged on speculation it will merge its power assets in a share swap. India’s BSE Sensitive Index, or Sensex, also advanced to the highest level since August, led by Tata Motors (TTMT) Ltd., while Brazil’s Bovespa added 0.5 percent in Sao Paulo as homebuilders jumped. People’s Bank of China Governor Zhou Xiaochuan said the nation will invest in Europe’s bailout funds and keep holdings of euro-denominated assets, bolstering the debt-stricken region that is China’s biggest trading partner. China is ready to get “more deeply involved” in helping Europe, Premier Wen Jiabao said on Feb. 14.

Some Fed Officials Saw a Need for Additional Asset Purchases ‘Before Long’ (Source: Bloomberg)
A few members of the Federal Open Market Committee meeting said the central bank may soon have to consider more asset purchases, while others said the economic outlook would have to deteriorate first. A few members said economic conditions “could warrant the initiation of additional securities purchases before long,” according to minutes of their Jan. 24-25 meeting released today in Washington. “Other members indicated that such policy action could become necessary if the economy lost momentum or if inflation seemed likely to remain” below 2 percent in the medium run. The central bank said at its meeting last month that it plans to hold interest rates near zero at least through late 2014 to spur growth and reduce unemployment, extending a previous date of mid-2013. Fed Chairman Ben S. Bernanke has since repeated the pledge, which was made before a report this month showing that the jobless rate fell to a three-year low of 8.3 percent in January.

Factories Churning Out More Goods Buoy U.S. Growth: Economy (Source: Bloomberg)
Factories in the U.S. boosted production in January, capping the biggest back-to-back increases in more than two years, showing manufacturing will remain at the forefront of the expansion. Output (IPMGCHNG) rose 0.7 percent after a revised 1.5 percent gain in December, the best two-month performance since July and August 2009, when the world’s largest economy was emerging from the recession, according to figures issued by the Federal Reserve today in Washington. Other reports showed homebuilders turned less pessimistic in February and manufacturing in the New York region grew. Business investment in new equipment and the need to rebuild inventories as sales improve will probably keep factory assembly lines rolling at the start of 2012. Additionally, a more stable residential real-estate market would remove an impediment to the recovery after declines in home construction subtracted from economic growth in each of the past six years.

New York Area Factories Unexpectedly Expand at Fastest Pace Since June ’10 (Source: Bloomberg)
Manufacturing in the New York region expanded in February at the fastest pace since June 2010, a sign factories are propelling the expansion. The Federal Reserve Bank of New York’s general economic index increased to 19.5 this month from 13.5 in January. The index exceeded all forecasts in a Bloomberg News survey of economists. Readings greater than zero signal expansion in the so-called Empire State Index, which covers New York, northern New Jersey, and southern Connecticut. Investment in new equipment and inventory restocking this quarter will help keep American factories expanding even as slower global growth limits exports. A pickup in job creation that helps drive bigger gains in consumer spending may further fuel production.

China Capital Flow May Limit Reserve Ratio Cuts (Source: Bloomberg)
Capital flows into China have rebounded this year, the central bank said, adding to the case for officials refraining from making more cuts in banks’ reserve requirements. Expectations for a decline in the value of the yuan against the U.S. dollar have also reversed, with non-deliverable forward contracts now forecasting no change or some appreciation, the People’s Bank of China said in a quarterly monetary policy report posted on its website yesterday. It didn’t specify when the document was prepared. China reduced the amount of money banks must set aside as reserves for the first time in three years in December as capital inflows dried up amid Europe’s debt crisis, exacerbating a domestic credit crunch. UBS AG and Nomura Holdings Inc. have scaled back forecasts for cuts after liquidity increased and the trade surplus surged.

No More Valentines for Xi as Chinese Leader Faces a Bad-Cop U.S. Congress (Source: Bloomberg)
Chinese Vice President Xi Jinping, in line to become the country’s top leader next year, met congressional leaders amid criticism of China’s record on human rights, trade and currency issues. Xi’s third day in Washington included sessions with Senate Majority Leader Harry Reid and his Republican counterpart Mitch McConnell, and with House Speaker John Boehner and House Majority Leader Eric Cantor, who raised questions on human rights and religious freedom and criticized intellectual property protections. “The rhetoric out of the Congress on China is much more muscular and confrontational because they know they’re not running China policy; the White House is running China policy,” Robert Kapp, a business consultant focused on China and former president of the U.S.-China Business Council, said in a phone interview. “It’s a bad cop, good cop situation.”

Singapore Budget Seen Aiding Poor as 14-Year Low Unemployment Spurs Costs (Source: Bloomberg)
Singapore’s 2012 budget will probably feature assistance for the poor even after the island reported its lowest unemployment rate since the late 1990s, as policy makers seek to address the soaring cost of living. The government may improve a program to supplement the income of low-wage earners and give them rebates on municipal service fees, Singapore-based lenders Oversea-Chinese Banking Corp. (OCBC) and United Overseas Bank Ltd. predict. Citigroup Inc. said the budget may prioritize middle- and lower-income households over businesses in the short run. Prime Minister Lee Hsien Loong has signaled a shift toward addressing public discontent over rising prices and an influx of foreigners, after his ruling party suffered its weakest electoral win since independence in 1965. Efforts to boost the economy by allowing casinos and luring pharmaceutical companies have stoked jobs growth while propelling transportation and housing costs higher, making life harder for the city’s poorest.

Singapore Economy Shrinks Less Than Estimated (Source: Bloomberg)
Singapore’s economy shrank less than initially estimated last quarter as a surge in pharmaceutical production supported manufacturing at the year end. Gross domestic product fell an annualized 2.5 percent in the fourth quarter of 2011 from the previous three months, less than an initial estimate of a 4.9 percent decline, the trade ministry said in a report today. Non-oil domestic exports will probably rise 3 percent to 5 percent in 2012, the trade promotion agency said in a separate statement, reiterating an earlier forecast. Asian nations from China to India have seen an improvement in manufacturing this year based on purchasing managers indexes, while Malaysia reported growth that slowed less than economists estimated last quarter, suggesting the region is withstanding the impact of the European debt crisis. The gains may wane as Europe faces its second recession in less than three years, and pressure on Singapore’s central bank to support expansion may persist after it eased its policy stance last quarter.

Juncker Says He’s Confident Ministers to Decide on Greek Rescue on Feb. 20 (Source: Bloomberg)
Luxembourg Prime Minister Jean- Claude Juncker said he’s confident euro-area finance ministers will make a decision on a bailout for Greece at their next meeting on Feb. 20. Juncker, chairman of the group, issued a statement after the ministers held a conference call today on the Greek package.

Europe Demands More Greek Budget Controls (Source: Bloomberg)
Europe’s creditor countries struggled to bridge divisions over a rescue of Greece, seeking more control over how future aid is spent as the clock ticked toward a possible default next month. In a replay of the brinkmanship that marked the early stages of the Greek crisis two years ago, euro-area finance ministers extracted concessions from political leaders in Athens intended to pave the way for the endorsement of a 130 billion- euro ($171 billion) aid package next week. While “further considerations are necessary regarding the specific mechanisms to strengthen the surveillance of program implementation,” Europe is set to make “all the necessary decisions” on Feb. 20, Luxembourg Prime Minister Jean-Claude Juncker said in an e-mailed statement after chairing a conference call of finance chiefs late yesterday.

Greek Talks Hit Snag as EU Seeks Assurances (Source: Bloomberg)
Greece said that Europe’s wealthier countries are “playing with fire” by toying with the idea of expelling it from the 17-nation euro area as talks over a second aid program ran into new obstacles. Finance Minister Evangelos Venizelos leveled the accusation after a decision slated for tonight on aid totaling 130 billion euros ($171 billion) was postponed until at least Feb. 20 and possibly until after a full-time Greek government emerges from elections later in the year. “We are continually faced with new terms,” Venizelos told reporters in Athens today. “In the euro area, there are plenty who don’t want us anymore. There are some playing with fire, domestically and abroad. Some are playing with torches and some are playing with matches. But the risk is equally great.”