By Lynn Thomasson and Weiyi Lim - Dec 2, 2011 12:40 PM GMT+0700
Dec. 2 (Bloomberg) -- Mikio Kumada, a global strategist at LGT Capital Management in Singapore, talks about the global economy and stock markets. Kumada also discusses Europe's sovereign debt crisis, China's economy and central bank monetary policy. He speaks with John Dawson on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)
Asian stocks (MXAP) swung between gains and losses, while Australia’s dollar weakened, amid concern China’s economy is slowing and before a report that may show the U.S. unemployment rate stayed at 9 percent last month.
The MSCI Asia Pacific Index rose less than 0.1 percent as of 1:51 p.m. in Tokyo, after earlier falling as much as 0.4 percent. The Shanghai Composite Index lost 1.5 percent. Australia’s currency retreated 0.2 percent to $1.0226 and the Dollar Index (DXY) tracking the greenback halted a four-day slide. Futures on the Standard & Poor’s 500 Index gained 0.4 percent.
About $3 trillion was added to the value of global stocks this week after central banks took steps to ease Europe’s debt crisis and support economic growth. European Central Bank President Mario Draghi signaled yesterday that the ECB could do more to fight the debt crisis as long as governments push the euro area toward a fiscal union. U.S. data today may show payrolls climbed by 125,000 in November after rising 80,000 in October, according to economists surveyed by Bloomberg.
“Investors remain concerned about the weak economy again after yesterday’s one-day rally,” said Wei Wei, an analyst at West China Securities Co. in Shanghai. “There’s nothing spectacular that will really push stocks up.”
The MSCI Asia Pacific Index has climbed 7.6 percent in the past five days, its second-best weekly performance since May 2009. South Korea’s Kospi index was little changed and Hong Kong’s Hang Seng Index retreated 0.5 percent. The Nikkei 225 Stock Average gained 0.3 percent.
China Economy
The Shanghai Composite (SHCOMP) rose 2.3 percent yesterday after the central bank cut lenders’ reserve requirements for the first time since 2008. Manufacturing contracted last month for the first time in two years, a purchasing managers’ index showed yesterday. Shanghai home transactions slumped 53 percent last month from a year earlier, Shanghai Securities News reported, citing data from Shanghai Deovolente Realty.
Pacific Investment Management Co. has been buying shares of raw-materials producers and Chinese industrial companies as policy makers in Asia’s biggest economy take steps to bolster growth, said Masha Gordon, the head of emerging markets equity portfolio management. The People’s Bank of China said Nov. 30 it would lower banks’ reserve-requirement ratios by half a percentage point and Masha said she expects cuts totaling as much as three percentage points in the next 12 months. Pimco oversees about $1.35 trillion.
Samsung Electronics Co. slumped 1.6 percent in Seoul. Apple Inc. won an extension of a ban on Samsung’s sales of its latest tablet computer in Australia, delaying pre-Christmas sales.
Fuji Heavy Industries Ltd., maker of Subaru-branded cars, retreated 1.4 percent in Japan. Subaru halted sales of three of its four 2012 models in the U.S. as it recalls the cars for a brake defect.
U.S. Optimism
S&P 500 futures expiring in December rose to 1,248.9. The U.S. equity benchmark has jumped 7.4 percent in the last four sessions. The Institute for Supply Management’s factory index increased to 52.7 last month from 50.8 in October, the Tempe, Arizona-based group said yesterday.
“The focus has shifted temporarily away from Europe and toward the U.S., while investors wait for Europe to come up with policies,” said Kenji Sekiguchi, general manager at Mitsubishi UFJ Asset Management Co., which oversees the equivalent of $75 billion. “The U.S. isn’t as weak as investors feared it was.”
Benchmark 10-year Treasury yields were little changed at 2.08 percent. The yield reached 2.14 percent yesterday, the highest since Nov. 14.
Copper in London was poised for a 7.7 percent gain this week, the first advance since October, on signs that demand is still strong amid falling global inventories. Three-month delivery copper on the London Metal Exchange was little changed at $7,787.50 a metric ton.
Palladium Jumps
Palladium for immediate delivery was set for an 11 percent gain this week, the most in a year. The metal rose 0.3 percent to $632.75 an ounce today, the fifth day of gains.
The euro was little changed at $1.3455. European Central Bank policy makers will meet on Dec. 8 to review borrowing costs. All but one of the 33 economists in a Bloomberg survey predict the ECB will cut its benchmark interest rate by at least 25 basis points from the current 1.25 percent. The monetary authority unexpectedly lowered the rate at its November meeting.
The cost of insuring corporate bonds in Japan and Australia against non-payment declined. The Markit iTraxx Japan index dropped three basis points to 197 basis points, Deutsche Bank AG prices show. The benchmark is on course for its lowest close since Nov. 21, according to data provider 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: Lynn Thomasson in Hong Kong at lthomasson@bloomberg.net; Weiyi Lim in Singapore at wlim26@bloomberg.net
To contact the editor responsible for this story: James Regan in Hong Kong at jregan19@bloomberg.net.
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