European stocks fell from a 15- month high, the euro snapped a four-day rally and Spanish bonds dropped after finance chiefs deadlocked over plans for the banking system and Spain debated whether to seek a bailout. Chinese shares slumped, along with copper and soybeans.
The Stoxx Europe 600 Index lost 0.3 percent at 6 a.m. in New York, while Standard & Poor’s 500 Index futures slipped 0.2 percent. China’s Shanghai Composite Index (SHCOMP) sank 2.1 percent amid concern the world’s second-largest economy is slowing and as tensions with Japan escalated. The euro weakened 0.2 percent to $1.3107. Spain’s two-year note yield climbed as much as 15 basis points to 3.29 percent, the highest since Sept. 6. Copper slid 0.4 percent and soybeans retreated 1.6 percent.
European Union finance ministers failed to agree on a timetable for a more unified banking sector and clashed over terms of bailout requests and the role of the European Central Bank at a meeting Sept. 14 in Cyprus. Spanish Prime Minister Mariano Rajoy travels to Rome for talks with Italian Prime Minister Mario Monti this week after 65,000 people marched in Madrid over the weekend protesting austerity measures. At least 13 banks and brokerages cut their 2012 economic growth forecasts for China this month, while a dispute with Japan over islands led to public protests.
“The euro area finance ministers meeting has come and gone, and despite the indication of willingness by the ECB to buy bonds, we are still no closer to what many in the market consider the ultimate endgame,” said Brian Barry, an analyst at Investec Bank Plc in London. “Until we reach a position where their resolve to contain yields can be tested, yields could continue to drift higher.”
Two shares fell for every one that advanced in the Stoxx 600, which closed at the highest level since June 2011 last week. SSAB (SSABA) sank 8.6 percent, the most in seven months, as the Swedish steelmaker said demand for strip products has been much weaker than expected.
The decline in S&P 500 futures suggested the U.S. gauge will retreat from the highest level since December 2007. A report today may show manufacturing in the New York area contracted for a second month in September. The Fed Bank of New York’s general economic index rose to minus 2 this month from minus 5.9 in August, according to the median estimate in a Bloomberg survey of economists.
The euro declined against most of its 16 major counterparts, losing 0.2 percent versus the yen. Japan’s currency gained against 12 of its 16 peers.
Spanish 10-year bonds declined, with the yield rising 10 basis points to 5.88 percent, while the rate on similar-maturity Italian debt increased six basis points to 5.08 percent. Yields on 10-year bunds fell three basis points to 1.68 percent, and Treasuries were little changed at 1.86 percent.
The cost of insuring European corporate debt using credit- default swaps rose from a 13-month low. The Markit iTraxx Crossover Index of contracts tied to 50 mostly junk-rated companies climbed three basis points to 464, gaining from the lowest level since Aug. 1, 2011.
Zinc and aluminum fell more than 0.9 percent. New York oil declined 0.3 percent to $98.68 a barrel. The S&P GSCI gauge of 24 commodities declined 0.5 percent after jumping 1 percent on Sept. 14 to the highest settlement since April 2.
The MSCI Emerging Markets Index (MXEF) swung between gains and losses after climbing for a seventh day on Sept. 14, the longest run of gains in 11 months. The Hang Seng China Enterprises Index of mainland companies traded in Hong Kong decreased 0.5 percent today. Russia’s Micex Index slid 0.1 percent, led by OAO Sberbank, the nation’s biggest lender, declining 1.5 percent on a share-sale plan. The BSE India Sensitive Index climbed 0.5 percent after the government approved plans to allow overseas retailers such as Wal-Mart Stores Inc. to own 51 percent of supermarket chains.
To contact the reporter on this story: Stephen Kirkland in London at firstname.lastname@example.org; Richard Frost in Hong Kong at email@example.com;
To contact the editor responsible for this story: Stuart Wallace at Swallace6@bloomberg.net