Japanese Stock Futures Fall on Economic Concern, Australian Index Declines

Japanese stock futures fell as Japan’s strongest earthquake clouded the economic outlook and increased concern that corporate earnings will fall. Australian stocks dropped.

American depositary receipts of Hitachi Ltd., Japan’s second-largest manufacturer by revenue, slumped 1.4 percent from the closing share price in Tokyo. Those of Sony Corp., Japan’s biggest exporter of consumer electronics, declined 0.4 percent. Both said yesterday they halted production at some factories. Macquarie Group Ltd., Australia’s largest investment bank, sank 1.1 percent in Sydney today.

Futures on Japan’s Nikkei 225 (NKY) Stock Average expiring in June closed at 9,375 in Chicago yesterday, compared with 9,460 in Osaka, Japan. They were bid in the pre-market at 9,360 in Osaka at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index dropped 0.5 percent today. New Zealand’s NZX 50 Index was little changed in Wellington.

“There are increasing signs of damage from the earthquake on factories, and more and more companies are stopping production, so some impact on earnings is unavoidable,” said Takero Inaizumi, head of equity research in Tokyo at Mizuho Investors Securities Co.

Futures on the Standard & Poor’s 500 Index fell 0.2 percent today. The index slid 0.6 percent yesterday in New York as investors struggled to assess how much damage Japan’s worst earthquake on record will do to the global economy.

Raised Magnitude

The MSCI Asia Pacific Index declined 4.5 percent this year through yesterday, compared with a gain of 3.1 percent by the S&P 500 and a drop of 1.2 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 13.2 times estimated earnings on average, compared with 13.4 times for the S&P 500 and 10.9 times for the Stoxx 600.

The U.S. Geological Survey increased the magnitude of the March 11 earthquake that hit Japan to 9 from 8.9. The death toll from the earthquake and tsunami rose to 1,833 at 4 p.m. yesterday, according to the National Police Agency in Tokyo.

Tokyo Electric Power Co. said it resumed efforts to inject seawater into a nuclear reactor in Fukushima, north of Tokyo, after the temporary failure of the cooling system heightened the risk of a meltdown. Japan’s Chief Cabinet Secretary Yukio Edano later said the cooling function is working, though it’s not stable.

Tokyo Electric Power started power outages in parts of the greater Tokyo area yesterday, and it will continue rolling blackouts today, with the first to begin before 7 a.m. local time.

The yen appreciated to 81.54 against the dollar, compared with 82.18 at the close of stock trading in Tokyo yesterday. A stronger yen reduces income at Japanese companies when overseas revenue is converted into their home currency.

To contact the reporters on this story: Akiko Ikeda in Tokyo at iakiko@bloomberg.net; Toshiro Hasegawa in Tokyo at thasegawa6@bloomberg.net.

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.

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