Japanese and Australian stock futures fell as the U.S. Federal Reserve said the world’s largest economy continued to expand “gradually,” damping speculation Chairman Ben S. Bernanke may announce a third round of quantitative easing.
American Depositary Receipts of BHP Billiton Ltd., the world’s largest mining company, slid 0.5 percent as metals prices retreated. ADRs of Komatsu Ltd. (6301), the world’s second- biggest construction-equipment maker, gained 0.4 percent after U.S. rival Joy Global Inc. (JOY:US) said China’s coal markets show signs of stabilizing. Shares of Nissin Electric Ltd. may move after the Japanese utility cut its full-year profit forecast.
Futures on Japan’s Nikkei 225 Stock Average expiring next month closed at 9,065 in Chicago yesterday, down from 9,080 in Osaka, Japan. They were bid in the pre-market at 9,070 in Osaka at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index declined 0.2 percent today. New Zealand’s NZX 50 Index rose 0.3 percent in Wellington.
“Investors who expect Bernanke to deliver a clear commitment to QE3 might be disappointed, which could trigger some sort of sell-off in so-called risky assets,” said Mikio Kumada, a Singapore-based global strategist for LGT Capital Management, which oversees more than $20 billion. “This is still not a time to bet against major central banks’ ability to intervene in markets -- particularly when income-generating alternatives to equities and corporate bonds are not exactly plentiful.”
Futures on the Standard & Poor’s 500 Index were little changed today. The gauge gained 0.1 percent yesterday as a report showed the economy grew more than first estimated and investors awaited a speech by Bernanke to a meeting of central bankers in Jackson Hole, Wyoming, at the end of this week. Gross domestic product expanded at a 1.7 percent annual rate from April through June, up from an initial estimate of 1.5 percent.
The U.S. economy continued to expand “gradually” in July and early August as improving housing and retail sales helped outweigh a weakness in manufacturing, the Fed said yesterday in its Beige Book business survey based on reports from its 12 districts. The report reflects information collected on or before Aug. 20 and summarized by the Boston Fed.
Pacific Investment Management Co.’s Bill Gross said the Fed will add to monetary stimulus even if Bernanke fails to indicate additional measures later this week. Policy makers will announce more so-called quantitative easing “relatively soon,” Gross, who runs the world’s biggest bond fund, said in an interview yesterday on Bloomberg Television’s “Street Smart” with Trish Regan.
The MSCI Asia Pacific (MXAP) Index gained 9.4 percent from this year’s lowest level in June through yesterday amid speculation central banks across the world will act to stimulate economic growth. Stocks on Asia’s benchmark index were valued at 12.5 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 London Metals Exchange Index of six industrials metals fell 0.8 percent yesterday.
The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese companies in the U.S. retreated 0.7 percent to 88.90 at the close of trading in New York.
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