Bloomberg News

Japanese Futures Slip After U.S. Confidence Unexpectedly Drops

January 31, 2012

Feb. 1 (Bloomberg) -- Japanese stock futures and Australian equities edged lower after U.S. consumer confidence trailed economists’ projections and home prices fell more than expected, dimming the earnings outlook for Asian exporters.

American depositary receipts of Canon Inc., a camera maker that gets almost 30 percent of its sales from the Americas, slid 0.7 percent from the closing share price in Tokyo. Those of Honda Motor Co., Japan’s second-largest carmaker by sales, sank 2.6 percent after cutting its profit forecast in the wake of Thailand’s floods. BHP Billiton Ltd., Australia’s top oil producer, lost 0.2 percent in Sydney after oil prices declined.

“There’s less confidence that the U.S. economy gaining momentum,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc. Europe’s debt crisis and the yen’s continued strength against the Euro “is weighing on investor sentiment”

Futures on Japan’s Nikkei 225 Stock Average expiring in March closed at 8,800 in Chicago yesterday, compared with 8,810 in Osaka, Japan. They were bid in the pre-market at 8,800 in Osaka at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index slipped 0.1 percent today. New Zealand’s NZX 50 Index was little changed in Wellington.

Futures on the Standard & Poor’s 500 Index slid 0.1 percent today. The gauge fell 0.1 percent in New York yesterday after reports showed that consumer confidence unexpectedly dropped in January and separate report showed home prices fell more than forecast in November.

Chinese Stocks

Chinese stocks in the U.S. slid from a four-month high, led by Aluminum Corp of China Ltd., on speculation policy makers are reluctant to undertake monetary easing required to bolster the economy and company earnings. The Bloomberg China-US 55 Index of the most-traded Chinese equities in the U.S lost 1.5 percent to 102.61 in New York.

In Europe, a deal between Greece and its creditors continued to be elusive. Greek Prime Minister Lucas Papademos said he would try to meet German-led demands for a bigger debt writedown by investors and deeper budget cuts by his government.

The euro weakened to as low as 99.55 yen today in Tokyo, compared with 100.54 yen at the close of stock trading yesterday after European leaders left a Brussels summit with no accord over how to plug Greece’s widening budget hole. A weaker euro cuts the value of income at Japanese companies that do business in the region.

Oil, Metals

Crude oil for March delivery dropped 0.3 percent to settle at $98.48 a barrel in New York yesterday, falling for a third day. The London Metal Exchange Index of prices for six industrial commodities including copper and aluminum declined 1.4 percent, the biggest drop since Jan. 4.

The MSCI Asia Pacific Index gained 8 percent this year through yesterday, compared with increases of 4.4 percent by the S&P 500 and 4 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 1.3 times book value. That compares with 2.1 times for the Standard & Poor’s 500 Index in the U.S. and 1.4 times for the Europe Stoxx 600 Index in Europe.

--Editor: Jason Clenfield.

To contact the reporters on this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net; Masaaki Iwamoto in Tokyo at miwamoto4@bloomberg.net

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


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