Japan Stock Futures, Australia Shares Fall on Fed, Retail Sales

Japanese stock (MXAP) futures and Australian equities fell after the Federal Reserve refrained from taking new measures to spur growth and U.S. retail sales rose at the slowest pace in five months, clouding the earnings outlook for Asian exporters.

American depositary receipts of Sony Corp. (6758), which generates 20 percent of its sales in the U.S., fell 1.5 percent from the closing share price in Tokyo. Those of Mitsubishi UFJ Financial Group Inc. (8306), Japan’s biggest lender by market value, lost 1.9 percent. BHP Billiton Ltd. (BHP), an Australian mining company, dropped 1.5 percent in Sydney after metal prices fell.

Futures (TPX) on Japan’s Nikkei 225 Stock Average (NKY) expiring in March closed at 8,500 in Chicago yesterday, down from 8,570 in Osaka, Japan. They were bid in the pre-market at 8,530 in Osaka, at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index dropped 0.2 percent today. New Zealand’s NZX 50 Index lost 0.2 percent in Wellington.

“The Fed didn’t say anything about a third round of quantitative easing, which some in the market had expected,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc. “That disappointment led to a selloff in the U.S. and should also be a negative factor for Japanese stocks.”

Futures on the Standard & Poor’s 500 Index (SPXL1) rose 0.1 percent today. The index dropped 0.9 percent in New York yesterday after the Fed stopped short of offering another large-scale asset purchases to boost the economy. Stocks also fell as a report showed U.S. retail sales gained last month at the slowest pace since June.

‘Market Strains’

The Fed said in a statement that the U.S. economy continues to expand even as global growth slows. The statement reiterated a warning from the Fed’s two previous meetings that “strains in global financial markets continue to pose significant downside risks to the economic outlook.”

The MSCI Asia Pacific Index declined 17 percent this year through yesterday, compared with a 2.5 percent drop by the S&P 500 and a 14 percent loss by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 12.7 times estimated earnings on average, compared with 12.4 times for the S&P 500 and 10.3 times for the Stoxx 600.

The London Metal Exchange Index of prices for six industrial metals including copper and aluminum fell 0.4 percent yesterday.

To contact the reporters on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net; Satoshi Kawano in Tokyo at skawano1@bloomberg.net.

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

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