Japanese stock futures and Australian shares fell as concern heightened that Europe’s bailout of debt- ridden Greece will unravel and a report showed U.S. manufacturing slowed, damping the earnings outlook for Asian exporters.
American depositary receipts of Honda Motor Co., Japan’s second-largest carmaker by market value that gets 83 percent of its sales abroad, slid 1.9 percent from the closing share price in Tokyo. Those of Nomura Holdings Inc. (8604) slumped 5.9 percent after Japan’s largest brokerage said it will consider firing workers as part of a plan to triple cost cuts to $1.2 billion following its first quarterly loss in more than two years. Woodside Petroleum Ltd. (WPL), an Australian oil and gas producer, sank 1.1 percent after crude prices fell.
Futures on Japan’s Nikkei 225 (NKY) Stock Average expiring in December closed at 8,765 in Chicago yesterday, down from 8,850 in Osaka, Japan. They were bid in the pre-market at 8,750 in Osaka at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index fell 1.9 percent today. New Zealand’s NZX 50 Index slid 1 percent in Wellington.
“The Greek bailout plan may go back to where it started and U.S. ISM manufacturing was weaker than market estimates,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc. “The market environment is deteriorating fast.”
Greek Prime Minister George Papandreou told his ministers in Athens today that his plans for a referendum on accepting the bailout terms would also ask voters to confirm if Greece should remain a member of the European Union and the euro area.
“The dilemma isn’t ‘this or another government’,” Papandreou told his ministers, according to an e-mailed transcript of his statements. “The dilemma is ‘yes or no to the loan accord’, ‘yes or no to Europe’, ‘yes or no to the euro’.”
Futures on the Standard & Poor’s 500 Index fell 0.6 percent today. In New York, the index dropped 2.8 percent yesterday, extending its two-day retreat to 5.3 percent, the biggest decline since Oct. 3. Stocks retreated on concern a Greek referendum may threaten Europe’s bailout.
Papandreou’s announcement threatens to overshadow a Nov. 3- 4 Group of 20 summit in Cannes, France. German Chancellor Angela Merkel and French President Nicolas Sarkozy held emergency talks on Greece yesterday and called on Europe to implement the package of measures thrashed out in Brussels last week. The plan, designed to aid Greece and stem the wider debt crisis, is “more necessary than ever today,” they said in a joint statement issued in Berlin and Paris.
The U.S. Institute for Supply Management’s factory index dropped to 50.8 last month from 51.6 in September, the Tempe, Arizona-based group’s data showed yesterday. A reading of 52 was the median forecast in a Bloomberg News survey of economists. Fifty is the dividing line between growth and contraction.
The MSCI Asia Pacific Index declined 14 percent this year through yesterday, compared with a 3.1 percent drop by the S&P 500 and a 15 percent loss by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 12.4 times estimated earnings on average, compared with 12.3 times for the S&P 500 and 10.1 times for the Stoxx 600.
Crude for December delivery slid as much as 75 cents, or 0.8 percent, to $91.44 a barrel in electronic trading on the New York Mercantile Exchange.
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