Bloomberg News

Australia Futures Fall on U.S Data, Metal Prices

May 03, 2012

Australian stock futures dropped after U.S. service industries expanded less than projected and as falling commodity prices weakened the outlook for earnings at raw-material producers. New Zealand stocks retreated.

American depositary receipts of BHP Billiton Ltd. (BHP), the world’s largest mining company, fell 1.3 percent from the closing share price in Sydney. ADRs of Cnooc Ltd. (883), China’s largest offshore oil producer, dropped 0.7 percent as crude oil retreated. Qantas Airways Ltd. (QAN), Australia’s biggest airline, may be active after saying it will reduce capital expenditure.

Futures on Australia’s S&P/ASX 200 Index (AS51) fell 0.3 percent today. New Zealand’s NZX 50 Index slid 0.2 percent in Wellington. Japanese equity markets are closed today for a public holiday.

“The U.S. data was quite disappointing and it seems like it’s now catching up with the rest of the world,” said Stan Shamu, a market strategist at IG Markets in Melbourne, a provider of trading services in stocks, bonds and commodities. “Commodities prices have weakened, so the likes of BHP will be negatively affected.”

Futures on the Standard & Poor’s 500 Index rose 0.1 percent today. The index declined 0.8 percent in New York yesterday.

U.S. service industries grew at a slower pace than projected in April, a sign the largest part of the economy may struggle to accelerate. The report overshadowed data showing jobless claims fell to 365,000 in the week ended April 28, a one-month low. A Labor Department report today may say the U.S. added 160,000 jobs in April, compared with a gain of 120,000 the previous month, according to a Bloomberg survey of economists.

Chinese Stocks

The MSCI Asia Pacific Excluding Japan Index (MXAPJ) rose 12.6 percent this year through yesterday, compared with a 10.7 percent gain by the S&P 500 and a 5.3 percent advance by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 12 times estimated earnings on average, compared with a multiple of 13.2 for the S&P 500 and 10.8 times for the Stoxx 600.

The Bloomberg China-US Equity Index of the most-traded Chinese shares in the U.S. lost 1.4 percent to 103.44 in New York yesterday, after reaching the highest level since March 27 on May 2.

The London Metal Exchange Index of prices for six industrial metals including copper and aluminum fell 0.9 percent yesterday. The Thomson Reuters/Jefferies CRB Index of raw materials also retreated 0.9 percent.

Oil tumbled the most this year as European Central Bank President Mario Draghi said the euro area’s economic outlook has become “more uncertain.” Crude for June delivery fell $2.68 to settle at $102.54 a barrel on the New York Mercantile Exchange, the biggest percentage decline since Dec. 14.

To contact the reporter on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net

To contact the editor responsible for this story: John McCluskey at j.mccluskey@bloomberg.net


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