Bloomberg News

Japan Stock Futures Drop Amid Europe Debt-Crisis Concern

August 23, 2012

Japanese and Australia stock futures fell amid concern that European leaders aren’t making progress in solving the region’s debt crisis, curbing the earnings outlook for exporters.

Japan Tobacco Inc. (2914), Asia’s largest listed cigarette maker by market value, may be active after BNP Paribas SA advised selling the stock. Shares of Sony Corp. (6758) may move after the consumer electronics maker said it’s eliminating about 15 percent of the workers at its mobile-phone unit to reduce costs. QR National Ltd. (QRN), Australia’s No. 1 rail-freight operator, may climb as Royal Bank of Scotland Plc upgraded its recommendation on the shares.

Futures on Japan’s Nikkei 225 Stock Average expiring next month closed at 9,080 in Chicago yesterday, down from 9,180 in Osaka. They were bid in the pre-market at 9,090 in Osaka at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index declined 0.6 percent today. New Zealand’s NZX 50 Index retreated 1 percent in Wellington.

“Most of the risk still comes from Europe,” said Stan Shamu, a market strategist at IG Markets Ltd. in Melbourne, a provider of trading services for stocks, bonds, currencies and commodities. “There’s still skepticism that European leaders can come up with a solution.”

Futures on the Standard & Poor’s 500 Index advanced 0.1 percent today. The gauge slid 0.8 percent yesterday, the biggest drop in a month.

Leaders Meet

German Chancellor Angela Merkel said Europe is in one of its deepest crises, and while the path to a solution is “arduous,” the euro region will emerge stronger. She hosted French President Francois Hollande yesterday as the leaders of Europe’s two biggest economies seek common ground on Greece and the wider debt crisis. Greek Prime Minister Antonis Samaras will follow Hollande to Berlin today and travel on to Paris tomorrow.

The European Union said yesterday it is focused on its aid program for Spain’s banks and hasn’t received a request for a full bailout from the nation. German Finance Minister Wolfgang Schaeuble said that allowing Greece more time to meet its debt obligations would not solve the country’s problems and would increase costs for creditors.

In the U.S., a report showed the number of applications for unemployment benefits climbed last week to a one-month high. Jobless claims rose for a second week to 372,000, beating the 365,000 median forecast of economists surveyed by Bloomberg.

The MSCI Asia Pacific (MXAP) Index rose more than 12 percent from a June low through yesterday on bets monetary authorities in the U.S., Europe and China would take action to boost slowing economic growth.

Stocks on Asia’s benchmark index were valued at 12.6 times estimated earnings on average, compared with 13.7 for the S&P 500 and 11.6 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

The Thomson Reuters/Jefferies CRB Index of raw materials retreated 0.3 percent yesterday.

The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese companies in the U.S. slid 0.2 percent to 89.87 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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