By Shiyin Chen and Wes Goodman - Dec 28, 2011 12:30 PM GMT+0700
Dec. 28 (Bloomberg) -- Steve Bernstein, an advisor with Primus Capital, talks about the outlook for Asian markets in 2012, the European debt crisis and his investment strategy. Bernstein spoke with Rishaad Salamat, John Dawson, Mia Saini and David Ingles in Hong Kong on Dec. 23 on Bloomberg Television's "Asia Edge." (Source: Bloomberg)
Asia stocks (MXAP) fell, extending the MSCI Asia Pacific Index’s annual loss, while copper snapped a four- day rally amid concern economic growth in the region is slowing and before Italy sells debt today and tomorrow.
The MSCI Asia Pacific Index declined 0.7 percent at 2:22 p.m. in Tokyo. Standard & Poor’s 500 Index futures retreated 0.3 percent. Copper lost 1.5 percent in London, soybeans slid for the first time in nine days and gold sank to a one-week low. The euro weakened against 12 of its 16 major peers. Treasury 30-year yields slipped one basis point to 3.01 percent.
Economic reports today showed Japan’s industrial production dropped and confidence among South Korean manufacturers sank to a 30-month low. U.S. home prices fell more than projected in October even as consumer confidence gained in December to an eight-month high, data showed yesterday. Italy is scheduled to sell 9 billion euros ($12 billion) of 179-day bills and as much as 2.5 billion euros of zero-coupon 2013 bonds today.
“We haven’t seen any resolution from the European area, and the situation is going to be the same next year,” said Chungkeun Oh, a debt trader in Seoul at Industrial Bank of Korea, South Korea’s largest lender to small- and medium-sized companies.
About three shares slid for every one that rose on the MSCI Asia Pacific Index. The measure has fallen 18 percent this year, compared with a 12 percent drop on the Stoxx Europe 600 Index and a 0.6 percent gain in the Standard & Poor’s 500 Index.
Australia’s S&P/ASX 200 Index declined 1.3 percent and Hong Kong’s Hang Seng Index retreated 0.7 percent as the markets open after a two-day holiday. South Korea’s Kospi Index slipped 0.9 percent. SK Telecom Co. (017670) led losses among companies that trade without the right to the year’s final dividend payments.
U.S. Economy
The S&P 500 was little changed yesterday following last week’s 3.7 percent rally. The Conference Board’s index of consumer confidence rose to 64.5, exceeding all estimates in a Bloomberg News survey, and the highest reading since April, figures from the New York-based private research group showed.
The S&P/Case-Shiller index of home values in cities dropped 3.4 percent from October 2010 after decreasing 3.5 percent in the year ended September, the New York-based group said yesterday. The median forecast of 27 economists in a Bloomberg survey projected a 3.2 percent decline.
“The U.S. housing market has yet to get on a firm recovery path because we don’t know if prices will actually come back,” said Naoteru Teraoka, general manager at Tokyo-based Chuo Mitsui Asset Management Co., which oversees about $29.6 billion. “Market participants are in vacation mode and aren’t doing much.”
Italian Sales
Treasury 10-year yields fell one basis point to 2 percent today. Treasuries of all maturities have returned 9 percent this year, according to Bank of America Merrill Lynch indexes.
The euro was little changed at $1.3066 and weakened 0.2 percent to 101.62 yen. In addition to today’s sales, Italy is scheduled to sell bonds maturing in 2014, 2018, 2021 and 2022 tomorrow. The nation’s 10-year bond yields climbed two basis points yesterday to 7 percent, the level that spurred Greece, Ireland and Portugal to seek bailouts.
A report tomorrow may show Italian business confidence dipped to the lowest in almost two years.
The won traded at 1,156.95 per dollar, near a one-week low, after the Bank of Korea said an index of manufacturers’ expectations for January was 79, the least since July 2009. Thailand’s baht weakened after government data showed today the nation’s industrial output sank the most in more than a decade in November.
Copper, Gold
Three-month copper fell to $7,525 a metric ton in London after gaining 4 percent last week. The metal is down 22 percent this year, set for the first annual fall since 2008. Soybean futures dropped 1 percent to $11.97 a bushel, halting an eight- day, 9 percent jump. Corn declined 0.2 percent to $6.32 a bushel after prices rose 9.4 percent in the past seven days.
Gold for immediate delivery slid as much as 0.5 percent to $1,586.13 an ounce, the lowest prices since Dec. 19, on concern that an escalation of Europe’s debt crisis may weigh on global growth amid slowing demand in India and China. Futures were on course for the longest losing streak since 2009.
Oil traded near the highest level in six weeks after Iran threatened to block crude transportation through the Strait of Hormuz, increasing concern that global supplies will be curbed amid shrinking U.S. stockpiles. Crude for February delivery retreated 0.1 percent to $101.24 a barrel in New York. Futures have climbed 11 percent this year increasing 15 percent in 2010.
The cost of insuring corporate bonds against non-payment fell in Australia and Japan. The Markit iTraxx Australia index decreased two basis points to 179 basis points, Westpac Banking Corp. prices show. The index is headed for its lowest close since Nov. 8 and at those levels would have risen 75.5 basis points this year, according to data provider CMA.
The Markit iTraxx Japan index declined 1 basis point to 186, Deutsche Bank AG prices show. The gauge is set for its lowest close since Dec. 27, according to CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market.
To contact the reporters on this story: Shiyin Chen in Singapore at schen37@bloomberg.net; Wes Goodman in Singapore at wgoodman@bloomberg.net
To contact the editor responsible for this story: Shiyin Chen in Singapore at schen37@bloomberg.net
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