Bloomberg News

Japan Futures Fall as Greek Impasse Talks Fail

May 15, 2012

Japanese and Australian stock futures fell as talks to form a new government in Greece failed, increasing concern the country will be forced to leave the single European currency and derail efforts to contain the region’s debt crisis.

American depositary receipts of Sony Corp. (6758), Japan’s largest consumer electronics exporter that gets a fifth of its sales in Europe, fell 1.1 percent from the closing share price in Tokyo. Mizuho Financial Group Inc. (8411), Sumitomo Mitsui Financial Group Inc. (8316) and Mitsubishi UFJ Financial Group Inc., the three biggest banks in Japan, may be active after forecasting profit that exceeded analysts’ estimates as lending rebounds. ADRs of BHP Billiton Ltd., the world’s No. 1 mining company, declined 2.3 percent as metals prices dropped.

Futures on Japan’s Nikkei 225 Stock Average expiring in June closed at 8,845 in Chicago yesterday, down from 8,910 in Osaka, Japan. They were bid in the pre-market at 8,860 in Osaka at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index dropped 0.7 percent today. New Zealand’s NZX 50 Index slid 0.2 percent in Wellington.

“As the pressure builds in Europe, you need to see another mini crisis before policy makers will step in, and we’re not there yet,” said Andrew Pease, Sydney-based chief investment strategist for the Asia-Pacific region at Russell Investment Group, which manages about $150 billion. “Markets and economies in Asia are at the mercy of the export story.”

Second Election

The MSCI Asia Pacific Index (MXAP) has fallen for the past five trading days amid concern a political impasse in Greece will destabilize austerity plans in Europe. Greek leaders said a second election will be held after political gridlock left the nation without a government since elections on May 6. Greeks have withdrawn as much as 700 million euros ($893 million) from the nation’s banks, President Karolos Papoulias told party leaders.

German Chancellor Angela Merkel and French President Francois Hollande said they would consider measures to spur economic growth in Greece as long as voters there committed to the austerity demanded to stay in the euro.

Futures on the Standard & Poor’s 500 Index (SPX) rose 0.2 percent today. The index slid 0.6 percent in New York yesterday, a third day of declines.

The MSCI Asia Pacific Index rose 2.9 percent this year through yesterday, compared with a 5.8 percent gain by the S&P 500 and a 0.5 percent advance by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 11.9 times estimated earnings on average, compared with a multiple of 12.7 for the S&P 500 and 10.2 times for the Stoxx 600.

The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese shares in the U.S. extended its nine-day slump to 9.2 percent, closing at 95.24.

The London Metal Exchange Index of prices for six industrial metals including copper and aluminum slid 0.6 percent yesterday.

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

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


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