Japan Stock Futures, Australian Shares Fall on U.S. Deficit, Europe Crisis

Japanese stock futures fell on speculation a U.S. congressional committee will struggle to reach an agreement on deficit-cutting measures and on concern that Europe’s debt crisis will linger, damping investor appetite for riskier assets. Australian stocks declined.

American depositary receipts of Sumitomo Mitsui Financial Group Inc. (8316), Japan’s second-biggest lender by market value, fell 1.4 percent from the closing share price in Tokyo. Those of Tokio Marine Holdings Inc. (8766), a non-life insurer, slid 4.2 percent after cutting its full-year net-income forecast, citing the impact of floods in Thailand. Santos Ltd. (STO), an Australian oil and gas producer, fell 0.9 percent after oil dropped.

Futures on Japan’s Nikkei 225 (NKY) Stock Average expiring in December closed at 8,390 in Chicago on Nov. 18, down from 8,410 in Osaka, Japan. They were bid in the pre-market at 8,400 in Osaka at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index fell 0.6 percent today. New Zealand’s NZX 50 Index gained 0.5 percent in Wellington.

“There’s likely to be a continuing impasse and people will focus on the stability of the U.S. politically,” said Tim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “People will probably sit on the sideline and wait for clarity.”

Futures on the Standard & Poor’s 500 Index fell 0.8 percent today. The index was little changed in New York on Nov. 18.

‘Daunting Challenge’

The U.S. congressional committee faces a “daunting challenge” as its 12 members seek to bridge gulfs over taxes and spending by a Nov. 23 deadline, Texas Representative Jeb Hensarling, the Republican co-chairman, said yesterday. Time is running out for a plan to carve at least $1.2 trillion out of the federal budget, he said.

German Economy Minister Philipp Roesler said the European Central Bank isn’t responsible for buying the region’s debt because the European Financial Stability Facility was put in place to help countries reduce interest rates on their debt. Roesler made the comments in an interview with German newspaper Schleswig-Holstein am Sonntag, according to an e-mailed statement.

The MSCI Asia Pacific Index declined 17 percent this year through Nov. 18, compared with a 3.3 percent drop by the S&P 500 and a 16 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 oil for December delivery declined $1.41, or 1.4 percent, to settle at $97.41 a barrel on the New York Mercantile Exchange on Nov. 18.

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

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

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