Japanese and Australian stock futures fell, indicating benchmark gauges will extend this week’s losses, amid increasing concern that Greece will exit the euro and after disappointing economic data in the U.S.
American depositary receipts of BHP Billiton Ltd. (BHP), the world’s largest mining company, fell 2 percent from the closing share price in Sydney as investors sold stocks with profits tied to economic growth. ADRs of Canon Inc. (7751), a Japanese camera maker that depends on Europe for almost a third of its sales, lost 2 percent. Those of Sony Corp. (6758), Japan’s biggest consumer electronics exporter, declined 2.7 percent.
Futures on Japan’s Nikkei 225 Stock Average expiring in June closed at 8,680 in Chicago yesterday, down from 8,850 in Osaka, Japan. They were bid in the pre-market at 8,690 in Osaka at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index dropped 1.8 percent today. New Zealand’s NZX 50 Index slid 0.6 percent in Wellington.
“If policy makers don’t step in, the costs will be even higher to find a real solution in Europe,” said Diane Lin, a fund manager who helps manage $1 billion in equities at Pengana Capital Ltd. in Sydney. “We remain very cautious. The politicians have still not got the message.”
More than $3 trillion has been erased from the value of equities worldwide this month as concern Greece will exit the euro curbed demand for riskier assets. The country faces another election on June 17 that may boost parties opposed to the conditions of its international bailouts.
Greece’s credit rating was downgraded one level by Fitch Ratings on concerns the country won’t be able to muster the political support needed to sustain its membership in the euro area.
Banco Santander SA (SAN) was among 16 Spanish banks whose credit ratings were cut by Moody’s Investors Service, which cited economic weakness and the government’s mounting budget strain.
Economic reports yesterday showed U.S. jobless claims were unchanged at 370,000 in the week ended May 12, compared with the median forecast of 48 economists surveyed by Bloomberg News for a drop in claims to 365,000. The Bloomberg Consumer Comfort Index fell in the week ended May 13 to minus 43.6, a level associated with recessions or their aftermaths, from minus 40.4 in the previous period.
Futures on the Standard & Poor’s 500 Index gained 0.1 percent today. The index dropped 1.5 percent in New York yesterday, a fifth day of declines to a four-month low.
The MSCI Asia Pacific Index (MXAP) has tumbled 10 percent from this year’s high in February, a retreat some traders call a correction, as Greece’s failure to form a government returned investors’ focus to Europe’s debt crisis and amid signs China’s economic growth was slowing. That limited the advance this year on the gauge to 1.4 percent, compared with a 3.8 percent gain by the S&P 500. The Stoxx Europe 600 Index (SXXP) has fallen 1.2 percent in 2012.
Stocks in the Asian benchmark are valued at 11.8 times estimated earnings on average, compared with a multiple of 12.4 for the S&P 500 and 10.1 times for the Stoxx 600.
Crude oil for June delivery declined 25 cents to $92.56 a barrel on the New York Mercantile Exchange, the lowest settlement since Nov. 2.
The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese shares in the U.S. extended its record streak of declines to an 11th day, losing 2.5 percent to 91.97.
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