By Shiyin Chen and Saeromi Shin - Dec 19, 2011 3:06 PM GMT+0700
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South Korea's stocks dropped the most in five weeks and the won sank to more than a two-month low after the death of North Korean leader Kim Jong Il. Source: Yonhap News via Bloomberg
Dec. 19 (Bloomberg) -- Nick Maroutsos, co-founder of Sydney-based Kapstream Capital, talks about the impact of Europe's debt crisis on Asian markets and economies. Maroutsos speaks with Zeb Eckert on Bloomberg Television's "First Up." (Source: Bloomberg)
Dec. 19 (Bloomberg) -- Thomas Murphy, managing partner at private wealth-management firm Family Office Research & Management Ltd. in Sydney, talks about China's economy, central bank monetary policy and stock market. Murphy also discusses Europe's sovereign debt crisis and its implications for the region's banking industry. He speaks with Rishaad Salamat on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)
Dec. 19 (Bloomberg) -- Naomi Fink, head of Japan strategy at Jefferies Japan Ltd., talks about Japan stocks, and the outlook for the nation's economy and currency in 2012. Fink speaks with Zeb Eckert on Bloomberg Television's "First Up." (Source: Bloomberg)
Stocks (MXAP) fell for the first time in three days, the dollar rose and the won dropped to a two-month low after North Korean leader Kim Jong Il died and as European finance ministers prepare to discuss the region’s debt crisis.
The MSCI All Country World Index slid 0.7 percent at 8:01 a.m. in London, halting a two-day gain, and South Korea’s Kospi index slumped 3.4 percent. Standard & Poor’s 500 Index futures lost 0.2 percent. The dollar climbed 0.3 percent to $1.3012 against the 17-nation euro and rallied 1.4 percent against the South Korean won. Oil declined for a fourth day in New York and copper dipped 1 percent.
Kim, 70, died on Dec. 17 of exhaustion brought on by a sudden illness, the official Korean Central News Agency said. Euro-area finance ministers are seeking to meet a self-imposed deadline for drawing additional aid to the debt crisis through the International Monetary Fund and put together new budget rules. France is set to sell as much as 7 billion euros ($9.1 billion) of bills after Fitch Ratings last week reduced its outlook for the nation’s credit grade to negative from stable.
“What investors don’t like most is uncertainty,” said Im Jeong Jae, a Seoul-based fund manager at Shinhan BNP Paribas Asset Management Co., which oversees about $28 billion. “Amid very limited information over his death, it’s very tricky to guess what will happen in the communist nation as well as the impact on regional security.”
The Stoxx Europe 600 Index retreated 0.7 percent and The MSCI Asia Pacific Index dropped 1.9 percent. Australia’s S&P/ASX 200 Index sank 2.4 percent, Japan’s Nikkei 225 Stock Average retreated 1.3 percent and Hong Kong’s Hang Seng Index slipped 1.2 percent.
Billabong, Developers
Billabong International Ltd. (BBG) tumbled 44 percent after the Australian surfwear maker said first-half profit may fall as much as 26 percent. Agile Property Holdings Ltd. (3383) dropped 3.2 percent in Hong Kong, pacing losses among developers after China’s new home prices dropped in November from the previous month in 49 of 70 cities.
Speco Co. (013810), a South Korean defense equipment maker, rallied 15 percent in Seoul. The won fell to 1,174.80 per dollar, the lowest closing level since Oct. 7. A government statement called on North Koreans to “loyally follow” his son, Kim Jong Un.
The euro weakened before regional finance ministers hold a conference call at 3:30 p.m. Brussels time to discuss 200 billion euros of additional funding through the IMF. France is selling bills today after Fitch said on Dec. 16 that the country is more exposed to the region’s debt crisis than other top-rated euro-zone countries because of its budget deficit and government debt burden. Spain will auction government securities tomorrow maturing in three and six months.
‘More Pressure’
“There’s not going to be any upside until this situation is fixed,” Nick Maroutsos, who oversees the equivalent of about $3 billion as co-founder of Sydney-based Kapstream Capital, said in a Bloomberg Television interview. “Given that France might get downgraded, or we could see further sovereign defaults in the coming months, ultimately it’s going to put more pressure on the banks in the European region and also more pressure on the global environment.”
The Australian dollar dropped 0.5 percent to 99.30 U.S. cents. The Reserve Bank of Australia releases minutes tomorrow of its Dec. 6 meeting when it cut interest rates for a second- straight month.
Crude for January delivery lost 0.6 percent to $92.95 a barrel on the New York Mercantile Exchange, extending a three- day, 6.6 percent decline. Three-month copper dropped 1 percent to $7,270 a metric ton in London and nickel slipped 1.1 percent to $18,350 a ton. Gold slid 0.3 percent to $1,593.63 an ounce, extending last week’s 6.6 percent slump.
Bond Risk
The cost of insuring corporate bonds in Australia and Japan against non-payment increased, according to credit-default swap traders. The Markit iTraxx Australia index rose two basis points to 195 basis points, according to Westpac Banking Corp, while the Markit iTraxx Japan index climbed 2.5 basis points to 192, Deutsche Bank AG prices show.
S&P 500 futures expiring in March signal the U.S. stocks gauge may snap gains from Dec. 16, when it advanced 0.3 percent. Treasury 10-year yields were little changed at 1.85 percent.
U.S. online spending for the holiday season has jumped 15 percent to $30.9 billion from the year-earlier period, ComScore Inc. said. Consumer purchases probably rose 0.3 percent in November after increasing 0.1 percent in October, according to the median forecast of 62 economists surveyed by Bloomberg before Commerce Department figures Dec. 23.
To contact the reporters on this story: Shiyin Chen in Singapore at schen37@bloomberg.net; Saeromi Shin in Seoul at sshin15@bloomberg.net
To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net.
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