By Michael P. Regan and Rita Nazareth - Dec 8, 2011 11:20 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)
Dec. 8 (Bloomberg) -- David Roche, president of Independent Strategy and a former Morgan Stanley global strategist, talks about the impact of the European sovereign debt crisis on financial markets and the outlook for the global economy. Roche speaks with John Dawson, Angie Lau, Zeb Eckert and David Ingles on Bloomberg Television's "Asia Edge." (Source: Bloomberg)
Stocks slid, while the euro weakened and Spanish and Italian bonds tumbled, as the European Central Bank damped speculation it would boost debt purchases and regulators said the region’s lenders need to raise more capital than previously estimated.
The Standard & Poor’s 500 Index lost 1.3 percent to 1,244.92 at 11:18 a.m. in New York. The Stoxx Europe 600 Index retreated 1.4 percent, reversing a 1 percent advance. The euro slid 0.9 percent to $1.3295. Yields on 10-year Italian and Spanish bonds jumped at least 35 basis points. The S&P GSCI Index of commodities lost 1.2 percent, erasing a gain of as much as 0.9 percent. Ten-year U.S. Treasury yields fell four basis points to 1.99 percent after gaining six points earlier.
European equities and the euro headed lower as ECB President Mario Draghi said he did not necessarily signal the central bank would step up government bond purchases when he spoke last week, adding that the program was not eternal or infinite. Stocks extended losses as the European Banking Authority said the region’s banks will need to raise 114.7 billion euros ($152.7 billion) in fresh capital, up from a previous estimate of 106 billion euros.
“The pessimism is coming from the fact that the ECB didn’t go any further on the possibility of buying debt,” Peter Jankovskis, who helps manage about $2.4 billion at Oakbrook Investments in Lisle, Illinois, said in a telephone interview. “They continue to do things to Band-Aid the banking sector, but they aren’t getting at the fundamental issue here, which is that some of these underlying countries are nearing insolvency.”
EU Summit
Stocks and the shared euro currency had rallied earlier as Draghi said the ECB was pursuing more non-standard measures to fight the crisis, including unlimited three-year loans to banks and looser collateral criteria.
The Frankfurt-based ECB also today reduced its benchmark rate by a quarter percentage point to 1 percent, matching a record low. Investors also awaited for more announcements from Europe as leaders prepared to meet in Brussels to lay the foundations for a fiscal union. Euro-area leaders may agree to provide 150 billion euros ($201 billion) in loans through the International Monetary Fund to shore up European finances, a European Union diplomat said.
The S&P 500 snapped a three-day rally (SPX) as concern about European efforts to fight the debt crisis overshadowed a bigger- than-forecast decrease in jobless claims. Initial claims dropped by 23,000 to 381,000 in the week ended Dec. 3, the fewest since February, Labor Department figures showed. The median forecast of 47 economists in a Bloomberg News survey called for a drop to 395,000.
‘Made a Mess of It’
“Nobody wants to commit capital ahead of the summit,” Michael Shaoul, chairman of Marketfield Asset Management in New York, which oversees $1 billion, said in a telephone interview. “Most of the good news that the ECB delivered was expected. You have the concern that the last few times Europe leaders have sat down and talked about this they made a mess of it. People are preparing for the worst.”
JPMorgan Chase & Co., Alcoa Inc., DuPont Co. and Bank of America Corp. lost more than 2 percent to lead declines in 26 of 30 stocks in the Dow average, which lost more than 100 points.
Silver, cocoa, oil and zinc slid more than 1.7 percent to lead declines in 17 of 24 commodities tracked by the S&P GSCI. Crude tumbled 1.9 percent to $98.58 a barrel.
Automobile producers, banks and construction and material companies led losses in 18 of 19 industries in the Stoxx 600.
European Yields
Italy’s 10-year bond yield surged 45 basis points to 6.44 percent, sending their spread above benchmark German bunds up 44 basis points to 4.43 percentage points. Spain’s 10-year yield climbed 35 basis points to 5.78 percent, trading 3.77 percentage points above bunds.
The MSCI Asia Pacific Index retreated 0.7 percent as Australia’s S&P/ASX 200 slid 0.3 percent and Japan’s Nikkei 225 fell 0.7 percent. Australian employment fell by 6,300 after a revised increase of 16,800 in October, compared with the median estimate of a 10,000 advance in a in a Bloomberg survey of 22 economists. Japanese machinery orders unexpectedly slipped 6.9 percent from a month earlier, the Cabinet Office said in Tokyo.
The MSCI Emerging Markets Index tumbled 1.4 percent. The Hang Seng China Enterprises Index dropped 0.9 percent in Hong Kong. India’s Sensex slumped 2.3 percent, the most since Nov. 21, after the central bank signaled it may not lower reserve requirements for lenders. Russia’s Micex Index rose 0.6 percent after losing 4 percent in the preceding two sessions following protests against the results of parliamentary elections. Brazil’s Bovespa slumped 1.9 percent.
To contact the reporters on this story: Michael P. Regan in New York at mregan12@bloomberg.net; Rita Nazareth in Sao Paulo at rnazareth@bloomberg.net
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net
Posts
No comments:
Post a Comment