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Commodities declined, the euro weakened against the dollar and European stocks headed for the first weekly drop in 12 weeks after disappointing U.S. economic reports amid sluggish progress in fixing Europe’s debt crisis.
The S&P GSCI gauge of 24 raw materials lost 0.5 percent at 8:21 a.m. in London, falling for a second day, as oil declined 0.9 percent and copper slid 0.9 percent. Most companies in the Stoxx Europe 600 Index retreated, with the gauge set for a 1.9 percent drop this week. Futures on the Standard & Poor’s 500 Index were little changed. The MSCI Asia Pacific Index (MXAP) lost 1.3 percent, erasing a weekly gain. The euro slipped 0.2 percent against the greenback.
Reports yesterday signaled that the jobs market and consumer confidence remain weak in the world’s largest economy. German Chancellor Angela Merkel and French President Francois Hollande will meet with Greece’s prime minister today and tomorrow to discuss the pace of reform. China may expand measures to contain the property market, Xinhua News Agency reported yesterday, citing a housing ministry official.
“Clearly economic data has been pretty poor,” said Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State Global Asset Management, which oversees about $150 billion. “The practicalities of what needs to be done to address this are huge. The rally seems to have been a bit more about hope over reality.”
About four stocks fell for each that rose on the MSCI Asia Pacific Index, which climbed to the highest since May yesterday. Whitehaven Coal Ltd. (WHC) slumped 11 percent on volume about nine times the 5-day average for the time of day in Sydney after a group led by billionaire shareholder Nathan Tinkler said it isn’t proceeding with a takeover offer. Makita Corp. (6586), a Japanese maker of power tools that gets more than 40 percent of its sales in Europe, slid 1.1 percent.
Shares of Samsung Electronics Co., the world’s largest mobile-phone maker, fell 0.9 percent in Seoul after a South Korean court said the company and rival Apple Inc. Co. must stop selling some mobile devices in South Korea and pay damages as they infringed on each other’s patents.
HSBC Holdings Plc, Europe’s largest bank, slumped 1.7 percent in Hong Kong. The lender is in talks to settle an investigation by U.S. regulators for laundering funds of sanctioned nations including Iran and Sudan, two people with knowledge of the case said.
U.S. jobless claims rose by 4,000 for a second week to reach 372,000 in the period ended Aug. 18, Labor Department figures showed yesterday. Consumer confidence dropped last week to the lowest level since January, according to the Bloomberg Consumer Comfort Index. Data today is forecast to show durable goods orders climbed the most this year. Britain’s economy may have shrunk less than previously estimated in the second quarter, the statistics office is forecast to report today.
“We remain quite cautious,” said Daphne Roth, Singapore- based head of Asia equity research at ABN Amro Private Banking, where she helps oversee about $207 billion. “In Europe, while they are moving in the right direction, the pace is slower than the market expects.”
The yen gained versus most of its 16 major peers this week as weakening global economic data boosted demand for haven assets. It was at 78.61 per dollar from 78.49 yesterday, and 98.60 per euro from 98.62. Australia’s dollar slid to a one- month low against its New Zealand counterpart after Reserve Bank of Australia Governor Glenn Stevens said the nation’s currency would probably fall if a mining boom ends.
China’s yuan retreated from a seven-week high as People’s Bank of China Governor Zhou Xiaochuan said the country’s growth is under pressure after a report showed manufacturing may contract at a faster pace in August.
China may have overstated 2012 industrial production data to mask the economy’s weakness, according to Dallas Federal Reserve economists. HSBC Holdings Plc lowered China’s 2012 growth forecast to 8 percent from 8.4 percent on stronger-than- expected “global headwinds.”
Copper for delivery in three months fell 0.9 percent on the London Metal Exchange. Oil in New York dropped 0.9 percent to $95.42 a barrel, while gold declined 0.4 percent to $1,663.85 an ounce, snapping a seven-day advance which was its longest rally since June.
The cost of insuring corporate bonds from non-payment in the Asia-Pacific region rose, headed for a second weekly increase. The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan climbed 2 basis points to 149, Royal Bank of Scotland Group Plc prices show. The gauge is set for the biggest daily gain since Aug. 13, and second consecutive weekly increase, according to data provider CMA.
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