Stocks, Euro Drop on Government Debt Concern; Oil Declines
May 5 (Bloomberg) -- Asian stocks fell, extending the biggest slump in global equities in three months, and the euro and oil dropped on concern Europe’s debt crisis is worsening. Corporate bond spreads<http://www.bloomberg.com/apps/quote?ticker=GOBC%3AIND>widened the most in 13 months. The MSCI Asia Pacific excluding Japan Index<http://www.bloomberg.com/apps/quote?ticker=MXAPJ%3AIND>dropped 1 percent to 413.90 as of 9:53 a.m. in Hong Kong. The euro extended declines after weakening below $1.30 for the first time since April 2009. The extra yield investors demand to own company debt instead of U.S. Treasuries climbed 4 basis points as investors shunned higher-yielding assets. More than $1.1 trillion was wiped from the value of global stocks yesterday on concern a rescue package for Greece will need to be extended to Spain and Portugal, even as Spanish Prime Minister Jose Luis Rodriguez Zapatero<http://search.bloomberg.com/search?q=Jose+Luis+Rodriguez+Zapatero&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1>called the speculation “complete madness.” Westpac Banking Corp., Australia’s second- biggest bank, said the global economy is still uncertain and the lender “remains cautious.” “Investors have clearly shifted their focus from strengthening corporate earnings and an improving macroeconomic backdrop to the problem of sovereign debt,” said Nader Naeimi<http://search.bloomberg.com/search?q=Nader+Naeimi&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1>, a strategist at AMP Capital Investors Ltd. who helps oversee $90 billion for the Sydney-based mutual-funds manager. The MSCI World Index fell 2.6 percent yesterday, the most since Feb. 4. China Declines China’s Shanghai Composite Index declined 1.5 percent and Taiwan’s Taiex lost 2.8 percent. Australia’s S&P/ASX 200 Index<http://www.bloomberg.com/apps/quote?ticker=AS51%3AIND>sank 1.6 percent. New Zealand’s NZX 50 Index <http://www.bloomberg.com/apps/quote?ticker=NZSE50FG%3AIND> fell 1.3 percent. Markets in Japan, South Korea and Thailand are closed today. Futures on the Standard & Poor’s 500 Index fell 0.2 percent. The gauge declined 2.4 percent yesterday as Portuguese and Spanish bonds fell on concern the countries will struggle to cut budget deficits that are among the highest in the euro area. “There is no dispute that risk appetite has come right off with the European worries,” said Prasad Patkar<http://search.bloomberg.com/search?q=Prasad+Patkar&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1>, who helps manage $1.7 billion at Platypus Asset Management Ltd. in Sydney. “Damage caused by contagion is so firmly etched in people’s mind from the dark days of the financial crisis that no one wants to be caught long risk whilst this sword is hanging over our heads.” Commodity producers’ shares sank after the Reuters/Jefferies CRB Index of 19 raw materials fell 2.3 percent yesterday, the biggest slide since Feb. 4. Nickel, silver and gasoline led the declines. Crude oil in New York dropped the most in three months. Miners Slide BHP Billiton Ltd. <http://www.bloomberg.com/apps/quote?ticker=BHP%3AAU>, the world’s largest mining company, fell 2.3 percent to A$37.71, while Rio Tinto Group <http://www.bloomberg.com/apps/quote?ticker=RIO%3AAU>, the world’s third-biggest mining company, lost 2.7 percent to A$65.25. Woodside Petroleum Ltd. <http://www.bloomberg.com/apps/quote?ticker=WPL%3AAU> lost 1.7 percent to A$44.48. New Zealand Oil & Gas Ltd.<http://www.bloomberg.com/apps/quote?ticker=NZO%3ANZ>dropped 3.9 percent to NZ$1.50. Westpac dropped 2.6 percent to A$26.62 in Sydney and slumped 4.7 percent to NZ$33.37 in Wellington even after saying first-half net income climbed 32 percent to A$2.88 billion ($2.6 billion). “We’ll be living with the effects and the consequences of this crisis for many years to come,” said Chief Executive Officer Gail Kelly<http://search.bloomberg.com/search?q=Gail+Kelly&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1>. Taiwan’s Taiex index <http://www.bloomberg.com/apps/quote?ticker=TWSE%3AIND>fell 2.3 percent, declining for the seventh day. Taiwan Semiconductor Manufacturing Co.<http://www.bloomberg.com/apps/quote?ticker=2330%3ATT>, the world’s largest custom-chip maker, retreated 1.6 percent to the lowest since March 23. United Microelectronics Corp.<http://www.bloomberg.com/apps/quote?ticker=2303%3ATT>lost 2.9 percent to a seven-month low. Philippine Poll Philippine bonds, stocks and the peso fell after vote- counting machines malfunctioned in tests this week, raising concern there will be a delay in choosing a new leader to replace President Gloria Arroyo<http://search.bloomberg.com/search?q=Gloria+Arroyo&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1>. The Philippine Stock Index dropped 3.3 percent, the most in almost 11 months, and the peso fell as much as 0.8 percent. Malaysia’s benchmark FTSE Bursa Malaysia KLCI Index<http://www.bloomberg.com/apps/quote?ticker=FBMKLCI%3AIND>fell 0.7 percent, the most since April 8. Sime Darby Bhd. led declines by plantation stocks after palm oil futures fell 1.5 percent yesterday, the most since April 19. The euro slipped against 12 of 16 major counterparts before German Chancellor Angela Merkel<http://search.bloomberg.com/search?q=Angela+Merkel&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1>speaks to parliament on the bailout. Her coalition has stepped up calls for allowing the “orderly” default of region members burdened with debt to avoid a repeat of the Greek crisis. “A renewed wave of pessimism is sweeping markets,” said Mike Jones<http://search.bloomberg.com/search?q=Mike+Jones&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1>, a currency strategist at Bank of New Zealand Ltd. in Wellington. “Fresh concerns over contagion from the Greek fiscal crisis are seeing risk aversion soar. This is causing investors to ditch the euro in favor of ‘safe haven’ currencies such as the yen and the dollar.” Euro Declines The euro traded at $1.2963 as of 10:38 a.m. in Singapore from $1.2987 in New York yesterday, after earlier falling to $1.2938, the weakest since April 20, 2009. The currency was at 122.92 yen from 122.78 yen yesterday, when it slipped to 122.65, the lowest since April 28. The dollar climbed to 1.1041 Swiss francs from 1.1029 francs, after earlier rising to 1.1052 francs, the strongest since May 2009. The greenback bought 94.82 yen from 94.54 yen. Financial markets are shut today in Japan for a holiday. Corporate bond spreads rose 4 basis points to 153 basis points, Bank of America Merrill Lynch’s Global Broad Market Corporate Index shows, the biggest one-day increase since March 2009. The cost of protecting corporate bonds from default surged in Australia and Asia. The Markit iTraxx Australia index of credit-default swaps jumped 14 basis points to 99 basis points as of 8:32 a.m. in Sydney, on course for its biggest one-day increase since June 23, according to Nomura Holdings Inc. and CMA DataVision in New York. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan climbed 7 basis points to 111 as of 8:30 a.m. in Singapore, Royal Bank of Scotland Group Plc prices show. A basis point is 0.01 percentage point. Crude Extends Drop Crude oil dropped for a second day, having plunged the most in three months yesterday, to trade at $82.41 a barrel at 10:30 a.m. in Singapore. Copper for three-month delivery increased 0.4 percent to $7,055 per metric ton after plunging 5.4 percent yesterday, the biggest drop since Jan. 27, 2009. The extra yield <http://www.bloomberg.com/apps/quote?ticker=GDBR10%3AIND>investors demand to hold Spanish debt rather than German equivalents has risen this week as the European Union’s rescue plan for Greece failed to insulate other euro-area nations from the crisis. Even as Spain’s debt burden, at 53 percent of output, is lower than the EU average, its budget deficit is the euro region’s third-largest. International Monetary Fund spokesman Bill Murray<http://search.bloomberg.com/search?q=Bill+Murray&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1>, in a statement released in Washington yesterday, said there’s “no truth” to rumors about Spain. S&P last week cut Greece’s credit rating to the junk level of BB+, lowered Spain by one level to AA and cut Portugal by two steps to A-. To contact the reporters on this story: Shani Raja<http://search.bloomberg.com/search?q=Shani+Raja&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1>in Sydney at [email protected]; Ron Harui<http://search.bloomberg.com/search?q=Ron+Harui&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1>in Singapore at [email protected] http://www.bloomberg.com/apps/news?pid=20601087&sid=a65ILpqEsXQc&pos=1 -- You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en.
