Bloomberg News

Japanese Stocks in U.S Rise, Australian Futures Little Changed

June 23, 2011

June 24 (Bloomberg) -- Japanese stocks traded in the U.S. rose after European Union leaders vowed to rescue Greece, easing concern the region’s debt crisis will spread. Australian stocks futures were little changed.

The Bank of New York Mellon Japan ADR Index gained 0.1 percent yesterday. American depositary receipts of Sony Corp., which gets more than 20 percent of its sales in Europe, increased 0.3 percent from the closing share price in Tokyo. Those of Nissan Motor Co., Japan’s No. 3 carmaker by revenue, were little changed even after the company forecast profit will fall this year. ADRs of BHP Billiton Ltd., the world’s largest mining company and Australia’s No. 1 oil producer, lost 0.3 percent after commodity prices dropped.

Futures on Japan’s Nikkei 225 Stock Average expiring in September closed at 9,580 in Chicago yesterday, compared with 9,600 in Osaka, Japan. They were bid in the pre-market at 9,570 in Osaka at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index were little changed today. New Zealand’s NZX 50 Index was little changed in Wellington.

“The fact that Europe is coming to the aid of Greece is a positive for the market,“ said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc. “It means there’s less of chance that the crisis spills over into neighboring countries.”

In Europe, measures proposed by Greek Finance Minister Evangelos Venizelos to complete a 78 billion-euro ($111 billion) austerity package required to win a bailout were endorsed by officials?from the European Union and International Monetary Fund, said a person familiar with the matter.

Debt Levy

A “solidarity levy” of between 1 percent and 5 percent would apply to all Greek wage earners, with members of parliament paying the top rate, Venizelos told reporters in Athens yesterday. Self-employed Greeks will have to pay a separate charge estimated at around 300 euros a year on average, he said.

Futures on the Standard & Poor’s 500 Index advanced 0.4 percent today. In New York, the index declined 0.3 percent to 1,283.50 yesterday after European Central Bank President Jean- Claude Trichet said risk signals for financial stability in the euro area are flashing “red” as the debt crisis threatens to infect banks. An increase in U.S. jobless claims added to signs the world’s biggest economy is slowing.

Applications for unemployment benefits increased 9,000 to 429,000 last week, Labor Department figures showed yesterday, exceeding the highest estimate in a Bloomberg News survey of economists.

Home Sales

Purchases of new homes in the U.S. fell in May for the first time in three months, showing the industry is struggling to gain momentum. Sales dropped 2.1 percent to a 319,000 annual pace, figures from the Commerce Department showed.

“If the number of applicants for jobless benefits remains near the current level, the jobless rate won’t drop and U.S. economic growth may decline further,” Nomura Holdings’s Wako said.

Federal Reserve Chairman Ben S. Bernanke said this week that joblessness above 9 percent and weakness in housing show the economy may be facing stronger “headwinds” than Fed policy makers initially estimated.

The MSCI Asia Pacific Index lost 5.1 percent this year through yesterday, compared with a gain of 2.1 percent by the S&P 500 and a drop of 4.2 percent the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 13.3 times estimated earnings on average, compared with 13 times for the S&P 500 and 10.7 times for the Stoxx 600.

Nissan Profit

Nissan Motor expects its full-year profit will drop 15 percent after the March earthquake and tsunami disrupted production and sales, and as the yen appreciated. Net income may fall to 270 billion yen ($3.36 billion) in the 12 months ending March 31 from 319.2 billion yen a year earlier, the company said in a statement. That would be higher than the 237 billion yen average of five analyst estimates compiled by Bloomberg in the past 28 days.

Crude oil for August delivery tumbled 4.6 percent to $91.02 a barrel in New York yesterday, the lowest settlement since Feb. 18. The London Metal Exchange Index of prices for six industrial metals including copper and aluminum fell 0.7 percent yesterday.

The IEA announced that it will release 60 million barrels of oil from emergency stockpiles to alleviate possible shortages following the loss of Libyan crude. It is the third time the Paris-based agency has coordinated the use of emergency stockpiles since the agency was founded in 1974.

Half of the 60 million barrels of crude from the IEA release will come from the U.S. Strategic Petroleum Reserve. Strategic Petroleum Reserve, according to the IEA and the U.S. Energy Department.

--Editors: John McCluskey, Jason Clenfield.

To contact the reporters on this story: Akiko Ikeda in Tokyo at iakiko@bloomberg.net; Toshiro Hasegawa in Tokyo at thasegawa6@bloomberg.net.

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.


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