Bloomberg News

Japan, Australia Stock Futures Fall Before Fed’s Decision

July 31, 2012

Japanese and Australian stock futures fell as investors await monetary policy decisions by the Federal Reserve and the European Central Bank.

American depositary receipts of carmaker Honda Motor Co. (7267) fell 3.5 percent from the closing share price in Tokyo after reporting profit that missed analyst estimates. Those of Komatsu Ltd. (6301), Japan’s largest construction machinery maker, declined 3.7 percent after cutting its annual earnings forecast. ADRs of BHP Billiton Ltd. (BHP), Australia’s biggest oil producer, lost 1 percent as crude prices dropped.

Futures on Japan’s Nikkei 225 Stock Average (NKY) expiring in September closed at 8,590 in Chicago yesterday, down from 8,680 in Osaka, Japan. They were bid in the pre-market at 8,600 in Osaka at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index slid 0.4 percent today. New Zealand’s NZX 50 Index was little changed in Wellington.

“Investors have been in wait-and-see mode for the last two days ahead of key central bank announcements and that will continue today,” said Prasad Patkar, who helps manage about $1 billion at Platypus Asset Management Ltd. in Sydney.

Shares of companies that do business in China may be active as reports on the nation’s manufacturing are due today. “The market may be looking for evidence of growth-supportive policy starting to show in the numbers,” said Prasad.

Fed, ECB

Futures on the Standard & Poor’s 500 Index (SPXL1) fell 0.2 percent today. The index dropped 0.4 percent in New York yesterday as economists surveyed by Bloomberg News forecast the Fed may forgo announcing a third round of large-scale asset purchases today, and is more likely to wait until September to unveil plans to buy $600 billion in housing and government debt.

The European Central Bank meets tomorrow, with President Mario Draghi pledging policy makers will do whatever is needed to preserve the euro.

The MSCI Asia Pacific Index (MXAP) fell 8 percent from this year’s high on Feb. 29 through yesterday amid concern Europe’s sovereign-debt crisis will worsen as the U.S. and Chinese economies slow.

The regional benchmark index traded at 12.1 times estimated earnings, compared with 13.4 for the Standard & Poor’s 500 Index and 11.2 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

In China, the Purchasing Managers’ Index may haven risen to 50.5 in July from 50.2 in June, economists surveyed by Bloomberg News forecast ahead of the release of government figures today. HSBC Holdings Plc. (5) also is scheduled to report its data on manufacturing.

The Bloomberg China-US Equity Index of the most-traded Chinese companies dropped 0.2 percent to 86.77 yesterday in New York for a monthly retreat of 4.9 percent.

Oil for September delivery fell as much as 31 cents to $87.75 a barrel in electronic trading on the New York Mercantile Exchange.

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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