Bloomberg News

Japanese, Australian Stock Futures Fall as G-8 Discusses Greece

May 20, 2012

Japanese and Australian stock futures fell after a gathering of the leaders of the Group of Eight nations failed to deliver a unified strategy to quell the European debt crisis.

American depositary receipts of Sony Corp. (6758), Japan’s No. 1 exporter of consumer electronics that depends on Europe for a fifth of its revenue, slid 0.9 percent from the closing share price in Tokyo. Those of Mizuho Financial Group Inc. (8411), Japan’s third-largest bank by market value, lost 3.3 percent. Shares of James Hardie Industries SE (JHX), an Australian building-materials supplier, may be active after reporting profit that beat analysts’ estimates.

Futures on Japan’s Nikkei 225 Stock Average (NKY) expiring in June closed at 8,555 in Chicago on May 18, down from 8,600 in Osaka, Japan. They were bid in the pre-market at 8,560 in Osaka at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index fell 0.2 percent today. New Zealand’s NZX 50 Index dropped 0.3 percent in Wellington.

“It’s very important that a clear way forward is established” for the European debt crisis, said Tim Schroeders, a portfolio manager who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “Given we had a number of false starts until we reached this juncture, people will await a lot more clarity before reverting to a risk-on stance.”

Futures on the Standard & Poor’s 500 Index (SPXL1) lost 0.1 percent today after the index slid 0.7 percent in New York on May 18.

G-8 Meeting

The G-8 leaders who met at Camp David over the weekend pushed for Greece to stay in the euro area and supported boosting growth, even as Germany said Europe can’t spend its way out of the debt crisis. They concurred at U.S. President Barack Obama’s retreat outside Washington “that the right measures are not the same for each of us.”

The MSCI Asia Pacific Index (MXAP) fell 5.1 percent last week, capping the biggest weekly loss since September 2011, as political chaos in Greece stoked risks the nation will exit the euro zone and other debt-stricken nations such as Portugal and Italy may follow.

The Asia Pacific Index dropped 1.1 percent this year through last week, compared with a 3 percent gain by the S&P 500 and a 2.3 percent loss by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 11.5 times estimated earnings on average, compared with 12.3 times for the S&P 500 and 10 times for the Stoxx 600.

Chinese companies traded in the U.S. fell to the lowest valuations versus the biggest emerging markets in a year. The Bloomberg China-US Equity Index of the most-traded Chinese shares in the U.S. dropped 7.2 percent in New York last week to 90.7, the biggest five-day decline since September.

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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