By Lynn Thomasson and Norie Kuboyama - Dec 8, 2011 1:41 PM GMT+0700
Dec. 8 (Bloomberg) -- Michael Kurtz, chief Asian equity strategist at Nomura Holdings Inc., talks about the outlook for Asian financial markets and his investment strategy. Kurtz speaks with John Dawson on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)
Dec. 8 (Bloomberg) -- Wilfred Sit, Asia chief investment officer for Baring Asset Management, talks about the outlook for Asian financial markets in 2012 and his investment strategy. Sit speaks in Hong Kong with Susan Li on Bloomberg Television's "First Up" .(Source: Bloomberg)
Asia stocks (MXAP) and the South Korean won fell as Europe’s leaders struggle to resolve the sovereign-debt crisis and reports showed unexpected declines in Japanese machinery orders and Australian employment.
The MSCI Asia Pacific Index retreated 0.7 percent as of 3:31 p.m. in Tokyo. The Nikkei 225 Stock Average dropped from a one-month high and Australia’s currency fell against most of its 16 major counterparts. The won sank 0.5 percent to 1,131.43 per dollar. The yield on 10-year benchmark Treasuries was little changed at 2.03 percent following the biggest decrease in almost a month yesterday. Gold for immediate delivery slid 0.2 percent.
The European Central Bank may announce a range of measures today to fight off a recession as leaders in the region meet to lay the foundations for a fiscal union. The Bank of Korea and the Reserve Bank of New Zealand cited risks of slowing economic growth after leaving borrowing costs unchanged. A Bloomberg poll of global investors showed 61 percent of respondents predict China (MXCN) will face a banking crisis in the next five years.
“As the meetings get closer, investors have turned cautious,” said Masaru Hamasaki, who helps oversee the equivalent of $24 billion as chief strategist at Toyota Asset Management Co. in Tokyo. “There’s been a switch from a feeling that we were going to get some visibility on the situation to a cooler stance, where people are in a wait-and-see mood.”
Euro Area Lending
The euro was little changed at $1.3409. The ECB will cut the benchmark interest rate by a quarter percentage point to 1 percent, according to 53 of 58 economists in a Bloomberg News survey. Policy makers may also loosen collateral criteria to give banks greater access to cheap cash and offer longer-term loans, said three euro-area officials with knowledge of the deliberations.
More than two shares fell for each that rose in the MSCI Asia Pacific Index today. The gauge jumped 8 percent last week, the most since August 2007, after the Federal Reserve and five other central banks lowered the cost of dollar funding and China cut the proportion that banks need to hold as reserve capital.
Futures on the Standard & Poor’s 500 Index slipped 0.1 percent to 1,262.80. Jobless claims in the U.S. probably fell to 395,000 last week from 402,000 the prior week, economists in a Bloomberg News survey estimated before a Labor Department report today.
Singapore’s Straits Times Index (FSSTI) slumped 1.7 percent as developers tumbled. The government imposed additional taxes on purchases of private residential property to curb excessive investment after home prices rose for nine quarters.
‘More Cautious’
“People are somewhat more cautious,” said Terrace Chum, Hong Kong-based managing director of greater China equities for Manulife Asset Management, which oversees $199 billion. “Europe will continue to be a drag as problems there aren’t going to be resolved so soon.”
Australia’s S&P/ASX 200 slid 0.3 percent. The so-called Aussie weakened 0.3 percent to $1.0266. The number of people employed fell by 6,300 after a revised increase of 16,800 in October, the statistics bureau said in Sydney today. The median estimate in a Bloomberg News survey of 22 economists was for a 10,000 advance.
The Nikkei 225 (NKY) fell 0.7 percent, paring an earlier drop of 1.1 percent. Machinery orders, an indicator of capital spending, slipped 6.9 percent from a month earlier, the Cabinet Office said in Tokyo. The median forecast of 27 economists surveyed by Bloomberg News was for a 0.5 percent gain.
Tepco Slumps
Tokyo Electric Power Co. tumbled for a fifth day, losing 11 percent. The company whose power plant is at the center of the worst nuclear emergency in 25 years will be taken over by the government and most of the management replaced, the Mainichi newspaper said, without giving the source of the information.
Prime Minister Yoshihiko Noda’s Cabinet is debating Tokyo Electric Power Co.’s situation, and it is “too early” for ministers to discuss whether to nationalize the utility, Chief Cabinet Secretary Osamu Fujimura told reporters in Tokyo.
The cost of insuring Asian corporate and sovereign bonds against non-payment increased, with the Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan rising 3 basis points to 191 basis points, Royal Bank of Scotland Group Plc prices show. That’s the highest since Dec. 6, according to data provider CMA.
Copper gained for the first time in three days, adding 0.2 percent to $7,833 a metric ton. Oil gained 0.3 percent to $100.74 a barrel.
Gold ETFs
Gold for immediate delivery declined 0.2 percent to $1,738.6 an ounce. Holdings in bullion-backed exchange-traded funds dropped to 2,356.716 metric tons yesterday from the all- time high of 2,358.206 tons on Dec. 6, according to Bloomberg data.
The Shanghai Stock Exchange Composite Index was little changed after erasing an earlier decline of 1.3 percent on speculation that China may further loosen monetary policy to combat slowing growth. Hong Kong’s Hang Seng Index (HSI) fell 0.9 percent.
Data tomorrow may show China’s industrial output increased 12.6 percent last month, the slowest pace since August 2009, based on the median forecast of economists surveyed by Bloomberg. Consumer prices probably increased 4.5 percent from a year ago, compared with a 5.5 percent rise in October, according to the Bloomberg survey.
To contact the reporters on this story: Lynn Thomasson in Hong Kong at lthomasson@bloomberg.net; Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net.
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net
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