Japanese, Australian Futures Fall on Recovery Concerns; Panasonic Declines
Futures on Japan’s Nikkei 225 Stock Average expiring in September closed at 9,680 in Chicago yesterday, compared with 9,730 in Singapore. Photographer: Tomohiro Ohsumi/Bloomberg
Japanese and Australian stock futures fell as a government report showed durable goods orders unexpectedly dropped in the U.S. and the Federal Reserve said the nation’s economic recovery slowed.
American depositary receipts of Nissan Motor Co., a carmaker that counts North America as its largest market, retreated 2 percent from the closing share price in Tokyo. Those of Woodside Petroleum Ltd., Australia’s second-largest oil and gas producer, dropped 0.4 percent after oil prices fell. ADRs of Panasonic Corp. tumbled 3.6 percent on concern the Japanese electronics maker will raise capital for acquisitions. The Federal Reserve’s Beige Book business survey showed U.S. growth was slowing in some areas.
Futures on Japan’s Nikkei 225 Stock Average expiring in September closed at 9,680 in Chicago yesterday, compared with 9,730 in Singapore. They were bid in the pre-market at 9,680 in Osaka, Japan, at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index sank 0.5 percent today. New Zealand’s NZX 50 Index dropped 0.3 percent in Wellington.
“Durable goods orders and the Beige Book confirmed business sentiment is worsening and economic growth is slowing,” said Mitsushige Akino, who oversees the equivalent of $450 million in assets in Tokyo at Ichiyoshi Investment Management Co. “People are waiting for the Fed’s next step.”
Futures on the Standard & Poor’s 500 Index were almost unchanged at 1,102.00. In New York, the index lost 0.7 percent to 1,106.13.
Durable Goods Orders
The U.S. Commerce Department reported yesterday that orders for durable goods dropped 1 percent, depressed by a decrease in demand for aircraft which is often volatile. Economists forecast total orders would climb 1 percent, according to the median estimate in a Bloomberg News survey.
The Fed’s Beige Book showed commercial real estate and the expiration of a tax credit for homebuyers were weighing on the economy in some areas.
“Economic activity has continued to increase, on balance, since the previous survey,” the Fed said yesterday in its Beige Book business survey, while noting that two of the Fed’s 12 districts reported the economy “held steady” and two said the expansion slowed.
Valuations, Yen
The MSCI Asia Pacific Index has lost 0.9 percent in 2010, compared with a 0.8 percent drop by the S&P 500 and a 1.3 percent gain by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 14.4 times estimated earnings, compared with 13.4 times for the S&P and 11.9 times for the Stoxx.
The yen appreciated to 87.34, compared with 87.83 against the dollar at the close of stock trading in Tokyo yesterday. Against the euro, Japan’s currency strengthened to 113.44 from 114.24. The stronger yen reduces income when overseas revenue is converted into local currency.
Crude oil for September delivery dropped 0.7 percent to $76.99 a barrel in New York.
Panasonic may buy the shares of Sanyo Electric Co. and Panasonic Electric Works Co. this year at a combined cost of about 900 billion yen ($10.3 billion), Nikkei English News reported, without saying how it obtained the information. Panasonic wants to unify management and focus on such areas as rechargeable batteries and household goods, Nikkei reported. Shares of Sanyo, Panasonic and Panasonic Electric Works were suspended from trading.
“The news is negative in the short term because of concerns about a capital increase,” Ichiyoshi’s Akino said. “But in the long term, the strategy is positive for the company because it should help it use its management resources more efficiently and boost shareholder value.”
To contact the reporter for this story: Akiko Ikeda in Tokyo at iakiko@bloomberg.net.
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