Bloomberg News

Japanese Stock Futures Fall on Italian Yields, Australia Rises

November 15, 2011

Nov. 16 (Bloomberg) -- Japanese stock futures fell after Italian bond yields surged amid concern the nation’s new government will struggle to secure enough support to ease Europe’s debt crisis. Australian stocks rose.

American depositary receipts of Mitsubishi UFJ Financial Group Inc., Japan’s biggest lender by market value, dropped 1.5 percent from the closing share price in Tokyo. Those of Panasonic Corp., a Japanese electronics company, slid 1.1 percent. BHP Billiton Ltd., the Australian oil producer, rose 1.2 percent after oil approached $100 a barrel.

Futures on Japan’s Nikkei 225 Stock Average expiring in December closed at 8,545 in Chicago yesterday, compared with 8,560 in Osaka, Japan. They were bid in the pre-market at 8,550 in Osaka, at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index added 0.2 percent today. New Zealand’s NZX 50 Index fell 0.2 percent in Wellington.

“Italy is not terminal yet, but it will need evidence of concrete steps toward reform,” said Prasad Patkar, who helps manage about $1 billion at Platypus Asset Management Ltd. in Sydney. “The market will create risk-on and risk-off until evidence emerges one way or another.”

The MSCI World Index dropped 0.3 percent yesterday. Italy’s 10-year yield rose again above the 7 percent threshold that prompted other nations to seek bailouts. Italy’s prime minister designate Mario Monti prepares to meet President Giorgio Napolitano today to present his new government.

U.S. Retail Sales

Futures on the Standard & Poor’s 500 Index were little changed today. The index rose 0.5 percent in New York yesterday after a report showed U.S. retail sales beat estimates.

“The U.S. seems to be back on the recovery path, which is very helpful because it’s the biggest economy in the world and it fixes sentiment in a big way as well,” Platypus Asset’s Patkar said. “Investors around the world would be happy if Europe doesn’t export its toxicity.”

The MSCI Asia Pacific Index declined 14.5 percent this year through yesterday, compared with a 14.1 percent loss by the Stoxx Europe 600 Index. The S&P 500 is little changed for the year. Stocks in the Asian benchmark are valued at 12.7 times estimated earnings on average, compared with 12.7 times for the S&P 500 and 10.3 times for the Stoxx 600.

Crude oil for December delivery rose $1.23, or 1.3 percent, to $99.37 a barrel on the New York Mercantile Exchange, the highest settlement since July 26.

MSCI Inc. , which operates Asia’s benchmark index, will reshuffle the gauge’s members after the close on Nov. 30, it said in a report on its website dated yesterday. Japan’s Sanrio Co., the maker of Hello Kitty products, will be added. Bearing- maker Minebea Co. and Mitsui Engineering & Shipbuilding Co. will be removed from the benchmark.

--Editor: Jason Clenfield

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

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


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