Australian Shares, Japan Stock Futures Drop on Economy Concern

By Masaki Kondo

Nov. 6 (Bloomberg) -- Australian shares and Japanese stock futures dropped as worse-than-expected economic statistics in the U.S. overshadowed expectations President-elect Barack Obama will enact new measures to boost the world's largest economy.

BHP Billiton Ltd., the world's biggest mining company, slid 6.3 percent after prices for copper and crude oil dropped. U.S.- traded receipts of Sony Corp., which gets a quarter of its sales from the U.S., sank 7.1 percent from the closing share price in Tokyo. Those of Toyota Motor Corp. lost 7.5 percent.

``Now that the U.S. election is over, investors' attention has returned to the deteriorating outlook for the global economy,'' Mitsushige Akino, who oversees the equivalent of $468 million at Tokyo-based Ichiyoshi Investment Management Co., said in an interview with Bloomberg Television.

Australia's S&P/ASX 200 Index slumped 3.8 percent to 4,169.90 as of 10:29 a.m. in Sydney. New Zealand's NZX 50 Index fell 1.2 percent to 2,851.18 in Wellington.

Nikkei 225 Stock Average futures expiring in December closed at 9,155 in Chicago, lower than 9,520 in Osaka and 9,550 in Singapore. In New York, the Standard & Poor's 500 Index slumped 5.3 percent, the most in two weeks.

Service industries in the U.S. contracted the most on record to 44.4 last month, below the 47 estimated by economists, according to a report from the Institute for Supply Management. Meanwhile, U.S. companies cut 157,000 jobs in October, the most since November 2002 and bigger than an estimated drop of 102,000, according to ADP Employer Services.

Yesterday, the Nikkei climbed 4.5 percent, extending its rebound to 33 percent from a 26-year low on Oct. 27, as expectations grew that Obama will take additional measures to spur U.S. economic growth.

Steel Production

ArcelorMittal, the world's biggest steelmaker, yesterday forecast an earnings decline of as much as 48 percent in the fourth quarter and said it will cut global output by more than 30 percent. The announcement coincided with a Nikkei English News report that JFE Holdings Inc., Japan's second-largest steelmaker, has proposed a 10 percent price increase in plate steel for ships.

Crude oil for December delivery fell 7.4 percent to $65.30 a barrel in New York yesterday, the biggest drop since Oct. 10, as gasoline inventories rose in the U.S. Copper futures for December delivery fell 7.1 percent.

Meanwhile, the Japanese currency appreciated to as much as 97.77 per dollar from 99.58 at the close of stock trading in Tokyo yesterday, reducing the value of repatriated sales of Japanese companies. The yen strengthened against the euro to as much as 126.35 from 128.14.

To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.