Oil Declines; Asia Stocks Pare Losses

By Lynn Thomasson - Nov 17, 2011 1:24 PM GMT+0700
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The euro, the Australian dollar and New Zealand’s dollar declined for a fourth day versus the greenback. Photographer: Chris Ratcliffe/Bloomberg

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Nov. 17 (Bloomberg) -- Khiem Do, Hong Kong Kong-based head of multi-asset strategy at Baring Asset Management Ltd., talks about Europe's sovereign debt crisis and its implications for Asian financial markets. Do speaks with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)

Oil fell from a five-month high as concern increased that Europe’s debt crisis may spread and China’s central bank said it’s not ready to loosen inflation controls. Asian stocks swung between gains and losses and U.S. equity futures climbed.

Crude slid 0.4 percent to $102.23 a barrel as of 3:05 p.m. in Tokyo, after reaching $102.89 yesterday. The MSCI Asia Pacific Index swung between a loss of 0.8 percent and a gain of 0.3 percent. A gauge of Chinese shares lost 0.4 percent. Standard & Poor’s 500 Index futures climbed 0.5 percent ahead of data that that may show increased manufacturing in the Philadelphia region.

The MSCI China (MXCN) Index fell for a third day, the longest streak of losses in almost seven weeks. While inflation may continue to moderate, “the foundation of price stability is not yet solid,” the People’s Bank of China said yesterday in its third-quarter monetary policy report. The spread of the euro zone’s debt woes to “core countries” in the 17-nation group may cause “systemic risks” in the global economy, the central bank said.

The euro gained 0.3 percent to $1.3503. France auctions as much as 8.2 billion euros of debt today after yields on the nation’s 10-year bonds rose yesterday to a euro-era record relative to benchmark German bunds. Spain is issuing as much as 4 billion euros of a new benchmark security maturing in January 2022. The nation’s 10-year yield reached the highest since August yesterday.

Futures on the S&P 500 rose to 1,236.50. The U.S. equity benchmark fell 1.7 percent yesterday, the most in a week, after Fitch Ratings said that while American lenders have “manageable direct exposures” to Greece, Ireland, Italy, Portugal and Spain, further turmoil in those markets poses a “serious risk.”

Economic reports later today may show manufacturing in the Philadelphia region expanded in November at the fastest pace in seven months, a sign U.S. factories may provide more support for the recovery. U.S. housing starts fell 7.3 percent in October from a month ago, the biggest drop since April, based on economists’ estimates from a Bloomberg survey.

To contact the reporter on this story: Lynn Thomasson in Hong Kong at lthomasson@bloomberg.net

To contact the editor responsible for this story: Shelley Smith at ssmith118@bloomberg.net