European Stocks, Commodities Drop on China GDP; Won Strengthens (Bloomberg)
2012-04-13 07:11:04.585 GMT
By Lynn Thomasson and Saeromi Shin
April 13 (Bloomberg) -- European stocks fell for the first time in three days, commodities slid and Australia’s dollar weakened as China reported slower-than-expected economic growth. Asian shares rallied and South Korea’s won strengthened after a failed rocket launch by North Korea.
The Stoxx Europe 600 Index retreated 0.5 percent as of 8:05 a.m. in London, while Standard & Poor’s 500 Index futures declined 0.3 percent. The MSCI Asia Pacific Index climbed 0.9 percent, the biggest gain in almost three weeks. Australia’s dollar lost 0.5 percent and the won rose against all 16 major counterparts. Ten-year Treasury yields fell two basis points to 2.03 percent. The S&P GSCI Index of 24 raw materials fell 0.3 percent and copper sank 1 percent.
China said its gross domestic product increased 8.1 percent in the first quarter, the smallest gain since mid-2009 and less than the 8.4 percent growth predicted in a Bloomberg survey. North Korea launched a rocket, which broke up and fell into the sea, in defiance of international pressure including U.S. warnings that doing so would nullify a food aid deal. Reports on U.S. consumer confidence and inflation are due later today.
“The market’s skew was definitely looking for a stronger number,” Jonathan Cavenagh, a Singapore-based currency strategist at Westpac Banking Corp., Australia’s second-biggest lender, said of China’s GDP figure. “The knee-jerk reaction has been to sell risk currencies,” including the Aussie dollar.
Earnings Season
JPMorgan Chase & Co. and Wells Fargo & Co. are scheduled to report earnings today and 91 companies in the S&P 500 will announce results next week. Per-share profit growth for companies in the U.S. equity benchmark is projected to have slowed to 0.8 percent in the first quarter, according to analyst estimates compiled by Bloomberg.
Infosys Ltd., India’s second-largest software services exporter, plunged 9.1 percent in Mumbai after forecasting sales that trail analyst estimates.
Taiwan’s Taiex Index rallied 1.6 percent, its best performance since February. The Nikkei 225 Stock Average rallied 1.2 percent, while Australia’s S&P/ASX 200 Index added 1 percent. All 10 industries in the MSCI Asia Pacific Index advanced. The regional equity gauge gained 0.2 percent this week.
The Hang Seng China Enterprises Index jumped 2.5 percent, the most in two months, and the Shanghai Composite Index gained 0.4 percent. Chinese lenders added 1.01 trillion yuan ($160.1 billion) of new loans in March, the most since January 2011, the central bank reported yesterday.
Fast Retailing, Sony
Fast Retailing Co. surged 8.6 percent in Tokyo for the biggest advance since 2009. Asia’s largest clothing retailer raised its annual profit forecast, saying record earnings will be driven by increased sales of Uniqlo apparel. Sony Corp. fell 5.5 percent. Japan’s biggest consumer-electronics exporter said it will cut 10,000 jobs.
The won gained 0.5 percent to 1,135 per dollar. South Korea’s central bank will closely monitor stocks, bonds and currency markets following North Korea’s rocket launch, Deputy Governor Park Won Shik said at an emergency meeting in Seoul.
The U.S. military said it tracked the rocket, which was “assessed to have failed” and fell harmlessly into the sea. North Korea state media confirmed the failure and said it was under investigation.
“Investors are just shrugging off this launch,” said Im Jeong Jae, a Seoul-based fund manager at Shinhan BNP Paribas Asset Management Co., which oversees about $28 billion. “The news came out before the market opened that the rocket launch failed, so investors didn’t have to worry about it.”
Bond Risk
The cost of insuring Asia-Pacific bonds from non-payment decreased, according to traders of credit-default swaps. The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan fell five basis points to 161 basis points, Credit Agricole SA prices show. The gauge is on course for its lowest close since April 4 and biggest daily drop since March 15, according to data provider CMA.
Crude oil for May delivery retreated 0.5 percent to $103.10 a barrel in electronic trading on the New York Mercantile Exchange. Three-month copper dropped as much as 1.1 percent to $8,126 a metric ton on the London Metal Exchange.
The dollar headed for a weekly loss versus most of its major peers before data today forecast to show gains in U.S. consumer prices slowed, fueling speculation the Federal Reserve will keep an accommodative policy. The greenback traded near a six-week low against the yen on prospects Fed Bank of New York President William C. Dudley may reiterate that he supports a pledge to hold interest rates low through late 2014.
U.S. consumer prices rose 0.3 percent last month after climbing 0.4 percent in February, according to the median estimate of a Bloomberg News survey taken before the Labor Department releases the figure. The Thomson Reuters/University of Michigan’s preliminary index of consumer sentiment probably held at 76.2 in April, the highest since February 2011, projections show.
Shares trim gains on lower-than-expected Q1 China GDP
TOKYO, April 13 (Reuters) - Asian shares pared early gains after China's first-quarter growth was slower than expected, clouding the outlook for demand, but a better-than-expected outcome for Italy's sovereign debt sale helped investors retain some risk appetite.
"The launch itself has very limited impact to broad financial markets," said Yuji Saito, director of the foreign exchange division at Credit Agricole Bank in Tokyo.
FOREX-Euro, Aussie fall after China growth data disappoints
TOKYO, April 13 (Reuters) - The euro and the Australian dollar eased on Friday after Chinese growth data disappointed traders already positioning for a strong showing, but other Chinese data came mostly in line with expectations, limiting the downside.
The currency markets showed no immediate reaction to news that North Korea's much hyped long-range rocket apparently crashed into the sea a few minutes after launch on Friday.
US wheat extends gains on cold weather, firm equities
SYDNEY, April 13 (Reuters) - Chicago wheat edged higher, building on the previous session's nearly 2 percent rally driven by cold weather threatening U.S. crop yields and optimism over global economic growth.
"Traders and analysts said it was too early to know how much, if any, damage was done by cold weather to the rapidly growing domestic winter wheat crop as well as the emerging corn and spring wheat crops."
Viterra sees bigger Canada canola plantings
WINNIPEG, Manitoba, April 12 (Reuters) - Canada's biggest grain handler, Viterra Inc , said on Thursday that Western Canadian canola plantings look to reach 20 million to 21 million acres this spring, smashing last year's record high of 18.5 million acres.
Farmers are set to expand canola's area due to the oilseed's high price and a return to dry spring conditions after two years of flooding that took millions of acres out of production, said Doug Wonnacott, chief operating officer of agri-products for Viterra.
Argentina soy crop estimate cut again-exchange
BUENOS AIRES, April 12 (Reuters) - One of Argentina's key grains exchanges cut its forecast for soy production on Thursday, saying the full extent of damage done to Pampas farm areas by a December-January drought is becoming clearer.
The harvest is now seen at 44.0 million tonnes in the 2011/12 crop year, down from a previous estimate of 45.0 million, the Buenos Aires Grains Exchange said, citing lingering effects of a six-week dry spell that parched hundreds of fields during the dog days of the Southern Hemisphere summer.
Brazil sugar crop struggles with drought, age-Unica
SAO PAULO, April 12 (Reuters) - Brazil's sugar cane sector expects the main center-south crop to yield 5.7 percent more sugar this season, as it grapples to reverse the effects of ageing crops and persistent drought that reduced the region's output last year, its first decline in more than a decade.
Sugar output from the center-south, which accounts for 90 percent of Brazil's cane, will reach 33.1 million tonnes this April-March season, up from 31.3 million last year, industry association Unica said in its first forecast of the season.
Frost, drought hit EU winter grain outlook-analyst
PARIS, April 12 (Reuters) - Analyst Strategie Grains on Thursday cut again its forecasts for winter grain crops in the European Union this year due to the impact of both frost and drought, raising the prospect of tight wheat supply in Europe next season.
The analyst lowered by 4.3 million tonnes its forecast of the EU's main soft wheat crop to 126.8 million tonnes, now putting production below last year's 129.1 million tonnes.
Brent crude slips towards $121 as China growth lags forecast
SINGAPORE, April 13 (Reuters) - Brent crude futures slipped towards $121 as demand growth worries resurfaced after China's economic expansion lagged expectations, while caution ahead of talks between Iran and world powers and North Korea's missile launch capped losses.
"We do expect prices to come off a bit because the market had expected China's growth to top forecasts," said Ben Le Brun, market analyst at OptionsXpress.
US natgas storage crunch may hammer prices by July
NEW YORK, April 12 (Reuters) - U.S. natural gas markets bracing for an autumn price crash caused by overflowing storage may be in for a shock this summer.
Some regions unable to cope with rocketing production are set to fill up by July, leaving a glut of stranded gas that could send already depressed prices into an unprecedented tailspin much earlier than expected.
COLUMN-Aluminium, who pays the price of success?
--Andy Home is a Reuters columnist. The opinions expressed are his own--
LONDON, April 12 (Reuters) - Aluminium sank to a fresh 2012 low on Tuesday, London Metal Exchange (LME) three-month metal closing at $2,065 per tonne. The last 24 hours have seen a minor bounce, although the words "dead" and "cat" spring to mind.
You don't need to be an analyst to appreciate the ugliness of the charts right now and unless the light metal can spring some sort of major upside surprise, and soon, technical funds will be massing to inflict further damage.
London copper falls after China GDP disappoints
SHANGHAI, April 13 (Reuters) - London copper fell nearly 1 percent after data showed China's economy grew slower than expected in the first quarter, reviving doubts about second-quarter demand from the world's biggest copper user.
"The GDP figure was low but not devastatingly so. Besides, other figures were better-than-expected. I'm pretty happy with the industrial output and fixed asset investment figures," said a Shanghai-based trader.
Australia to help Glencore/Xstrata stay ahead in zinc
MILAN, April 12 (Reuters) - Expansion of zinc mining operations in Australia will help mining group Xstrata and commodities trader Glencore to keep zinc market leadership after their planned merger, offsetting output cuts in Canada, a senior Xstrata manager said.
A full merger of Glencore and Xstrata, now before shareholders, will make the group the world's biggest zinc producer, with a controlled output of about 1.6 million tonnes and a 16 percent share of global zinc ore production.
Novelis to close aluminum plant in Canada
April 12 (Reuters) - Aluminum products maker Novelis Inc, which has cut its fiscal 2012 earnings estimate because of lower shipments and soft demand, will close its Saguenay Works in Jonquiere, Quebec.
The plant has 157 staff and production employees and makes aluminum coils to supply other Novelis facilities. It will cease production in August, said Novelis, the U.S. unit of India's HindalCo Industries Ltd .
China March crude steel output hits record
BEIJING, April 13 (Reuters) - China's crude steel output hit a new record in March, with mills responding to increasing prices as construction activities recovered from a winter lull.
Production reached 61.58 million tonnes in March, up 10 percent from February, data from the National Bureau of Statistics showed on Friday.
Gold holds onto gains; China data eyed
SINGAPORE, April 13 (Reuters) - Gold held steady, clinging to its 1-percent gains from the previous session, as investors await key China growth data for better understanding of the global growth picture.
Eldorado sees rapid growth in gold output, shares jump
April 12 (Reuters) - Eldorado Gold Corp , the Canadian miner that recently acquired European Goldfields, expects its annual gold production to touch 1.7 million ounces within five years as it brings new mines into production.
The Vancouver, British Columbia-based company said on Thursday it plans to commission five new mines over the next few years, increasing its global footprint to 12 operations by 2016.
Indonesia's industry minister wants mining export tax soon
JAKARTA, April 12 (Reuters) - Indonesia should quickly impose a tax on mining exports, the industry minister said on Thursday in comments likely to worry miners in the world's top exporter of thermal coal and refined tin.
Government officials say a 25 percent tax on mining exports is being considered for this year and a 50 percent tax for next year, though miners and industry analysts have speculated that such plans are likely to be toned down.
China's copper demand seen picking up in September
HONG KONG, April 12 (Reuters) - China's demand for refined copper may revive by September as current heavy stockpiles are depleted and Beijing takes steps to boost the cooling economy, analysts and sources at copper products manufacturing plants said on Thursday.
China is the world's top copper consumer but demand has been lacklustre since January as the global economic slowdown weighs on its exports as Beijing continues to clamp down on the property sector, a major copper user.
India launches WTO case against U.S. steel duties
GENEVA, April 12 (Reuters) - India has launched a trade dispute to challenge U.S. duties on certain steel products, the World Trade Organization said on Thursday.
The WTO gave no details but said India had "requested consultations" with the United States - the first stage of a formal trade dispute - over U.S. countervailing duties
METALS-London copper falls after China GDP disappoints
SHANGHAI, April 13 (Reuters) - London copper fell nearly 1 percent on Friday after data showed China's economy grew slower than expected in the first quarter, reviving doubts about second-quarter demand from the world's biggest copper user.
But the relatively modest decline suggested investors were hoping that the slowdown in China, the world's No. 2 economy, would lead Beijing to roll out further monetary easing, while other better-than-expected Chinese data released on Friday also helped keep bearish sentiment in check.
PRECIOUS-Gold edges down after China data boosts dollar
SINGAPORE, April 13 (Reuters) - Gold edged lower on Friday after weaker-than-expected first-quarter growth data from China prompted a modest rise in the dollar, but the losses were capped as the slower growth fuelled the prospects for further monetary easing.
The world's second-largest economy experienced a fifth consecutive quarter of slowing growth in the first three months of 2012, with the gross domestic product reading at a lower-than-expected 8.1 percent.
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