By Sarah Jones
Jan. 26 (Bloomberg) -- Stocks in Europe and Asia posted the longest losing streaks in more than six months amid mounting concern China is stepping up measures to cool the world’s fastest growing major economy. U.S. index futures retreated.
BHP Billiton Ltd., the world’s largest mining company, led basic-resource producers lower as metals slid. Bank of China Ltd. and Bank of Communications Co. sank more than 3 percent in Hong Kong after Chinese banks began restricting new loans. Siemens AG rallied the most in a month after Europe’s largest engineering company reported increased profit.
Europe’s Dow Jones Stoxx 600 Index lost 0.4 percent to 247.33 at 9:39 a.m. in London. The measure is falling for a fifth straight day, the longest stretch of declines since July, as U.S. President Barack Obama called for a limit on risk-taking by banks and China started to take steps to avert asset bubbles. The benchmark gauge for European equities is still up 57 percent since March.
“Equity markets are at the moment playing a very pronounced recovery so we think the markets have got a bit ahead of themselves,” Matthias Joerss, head of equity strategy at Sal. Oppenheim Jr. & Cie in Frankfurt, said in a Bloomberg Television interview. “We are more on the cautious side. We don’t think there are any gains to made in the first half.”
Asian stocks fell for a seventh day today, the longest losing streak in two years. The MSCI Asia Pacific Index slid 1.7 percent as Bank of China, the nation’s third-largest lender, retreated 3.4 percent to HK$3.68, and Bank of Communications, the fourth-largest, dropped 3.4 percent to HK$7.90.
Rein In Lending
Bank of China has stopped extending new corporate loans in the Shanghai area and China Construction Bank’s branch in the city has been told to screen applications for personal loans and mortgages more carefully and to stop new lending once a monthly quota is met, according to people familiar with the situation. Liu Mingkang, chairman of the China Banking Regulatory Commission, last week said some banks were asked to rein in lending because they failed to meet regulatory requirements.
Japan’s sovereign credit rating outlook was lowered to “negative” by Standard and Poor’s today because of diminishing “flexibility” to cope with a swelling debt load and concern about the lack of a plan to rein in budget deficits.
Futures on the Standard & Poor’s 500 Index declined 0.5 percent, indicating the benchmark measure for U.S. equities may resume its retreat. The gauge yesterday rebounded from a three- day decline amid signs Ben S. Bernanke will be reconfirmed as Federal Reserve chairman.
Apple Advances
Apple Inc. gained 1.5 percent to $206.20 in German trading after reporting a 50 percent jump in first-quarter profit late yesterday, buoyed by holiday orders for Macintosh computers and iPhones.
Texas Instruments Inc. fell 2.7 percent to $23.05 even after the second-largest U.S. chipmaker forecast earnings and sales that beat analysts’ estimates.
BHP Billiton sank 1.7 percent to 1,882.5 pence and Rio Tinto Group, the third-biggest mining company, fell 1.3 percent to 3,178.5 pence as copper declined on the London Metal Exchange. The metal is heading for the first monthly drop in four months on concern China and the U.S., the world’s two biggest users, may take steps to rein in liquidity.
U.S. Fed policy makers are considering adopting a new benchmark interest rate to replace the federal funds rate, which they’ve used for the last two decades. The central bank needs to have an effective policy rate in place when it starts to raise interest rates from record lows to keep inflation in check, said Marvin Goodfriend, a former Fed economist.
Siemens Surges
Siemens gained 2.6 percent to 66.26 euros after the engineering company reported the highest quarterly profit in more than two years. So-called sector profit, or operating earnings at the main industry, energy, and health care units, rose 11 percent to 2.26 billion euros ($3.2 billion). That beat the average estimate of 1.82 billion euros, according to a Bloomberg survey of economists.
The U.K. economy resumed growth by less than forecast in the fourth quarter as service industries and manufacturing expanded enough to pull Britain out of its longest recession on record. Gross domestic product rose 0.1 percent from the third quarter, the Office for National Statistics said today. The median forecast in a Bloomberg News survey of 33 economists was for a 0.4 percent increase.
German business confidence rose more than economists forecast to an 18-month high in January as the global economic recovery boosted exports. The Ifo institute in Munich said its business climate index increased to 95.8, the highest reading since July 2008.
Novartis, Novo Nordisk
Novartis AG added 1.7 percent to 56.65 Swiss francs. The drugmaker named Joe Jimenez, head of the company’s pharmaceuticals division, as its new chief executive officer and reported a 49 percent increase in fourth-quarter net income.
Novo Nordisk A/S jumped 6.6 percent to 370.5 kroner, the highest level since at least 1991. The world’s largest maker of insulin won U.S. Food and Drug Administration approval for its diabetes drug Victoza after safety concerns delayed the agency’s decision by about 10 months.
K+S AG dropped 1.5 percent to 41.54 euros amid concerns the world´s biggest salt producer may be forced to build a sewer line to the North Sea costing $700 million, about twice its annual operating profit. The state of Thuringia, where K+S operates mines, wants the company to pump its saline waste offshore rather than release it in the Werra River.
To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.
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