Bloomberg News

Japanese Stock Futures, Australian Shares Fall on Europe Split

October 19, 2011

Oct. 20 (Bloomberg) -- Japanese stock futures and Australian shares fell as an impasse over European bailout talks sparked concerns about the global economic recovery and the earnings outlook for Asian exporters.

American depositary receipts of Sony Corp., Japan’s No. 1 exporter of consumer electronics that gets 21 percent of its sales in Europe, fell 0.9 percent from the closing share price in Tokyo. Those of Mitsubishi Corp., Japan’s biggest trading company, slid 0.9 percent after commodity prices dropped. BHP Billion Ltd., the world’s largest mining company, dropped 2.1 percent.

Futures on Japan’s Nikkei 225 Stock Average expiring in December closed at 8,755 in Chicago yesterday, down from 8,790 in Osaka, Japan. They were bid in the pre-market at 8,760 in Osaka at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index declined 0.5 percent today. New Zealand’s NZX 50 Index fell 0.3 percent in Wellington.

“We remain pretty nervous about Europe’s crisis because we have yet to see a concrete safety-net being established for the financial system,” said Mitsushige Akino, who oversees about $600 million in Tokyo at Ichiyoshi Investment Management Co. “Pessimism about Europe sets the tone for the market’s sentiment.”

Futures on the Standard & Poor’s 500 Index rose 0.1 percent today. In New York, the index lost 1.3 percent yesterday as France and Germany split on the role of the European Central Bank in leveraging a rescue fund as banks lobbied against forced recapitalizations and larger writedowns of Greek debt.

Leaders’ Summit

French President Nicolas Sarkozy flew to Germany to join the talks as leaders assembled in Frankfurt in an effort to narrow divisions before an Oct. 23 summit.

Losses in U.S. stocks were limited yesterday after data showed that builders began work on more U.S. homes than forecast in September and consumer prices climbed at the slowest pace in three months. The Federal Reserve in its Beige Book survey said consumer spending rose slightly last month and the economy maintained its expansion, even as companies reported more doubt about the strength of the recovery.

The MSCI Asia Pacific Index declined 15 percent this year through yesterday, compared with a 3.8 percent drop by the S&P 500 and a 14 percent loss by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 12 times estimated earnings on average, compared with 12.1 times for the S&P 500 and 10.2 times for the Stoxx 600.

The Thomson Reuters/Jefferies CRB Index of raw materials fell 1.3 percent yesterday. Crude oil for November delivery dropped $2.23 to settle at $86.11 a barrel on the New York Mercantile Exchange.

--Editor: John McCluskey.

To contact the reporters on this story: Yoshiaki Nohara in Tokyo at; Masaaki Iwamoto in Tokyo at

To contact the editor responsible for this story: Nick Gentle at

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