Japanese and Australian stock futures fell as commodities entered a bear market and disappointing housing and labor market data in the U.S. added to signs the global economy is slowing.
American Depositary Receipts of BHP Billiton Ltd. (BHP), the world’s largest mining company, fell 2.4 percent. ADRs of Komatsu Ltd., a Japanese construction machinery maker, slid 1.5 percent. Those of Nomura Holdings Inc. (8604), Japan’s largest brokerage, retreated 3.3 percent.
Futures on Japan’s Nikkei 225 Stock Average expiring in September closed at 8,740 in Chicago yesterday, down from 8,820 in Osaka, Japan. They were bid in the pre-market at 8,750 in Osaka at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index declined 1.2 percent today. New Zealand’s NZX 50 Index retreated 0.3 percent in Wellington.
“The data shows a continuation of a trend of deteriorating data out of the U.S.,” said Peter Esho, chief market strategist at City Index Ltd., a provider of equities, bonds and currency trading in Sydney. “Traders and investors need to conserve capital. I wouldn’t be buying equities at the moment. You have to be cautious. The market’s now caught in a rip current and I don’t recommend trying to fight it.”
Futures on the Standard & Poor’s 500 Index advanced 0.3 percent today after bank credit downgrades announced by Moody’s Investors Service matched expectations. The gauge fell 2.2 percent yesterday after the release of reports on housing, manufacturing and employment.
More Americans than forecast filed claims for jobless benefits, manufacturing in the Philadelphia region shrank and sales of existing homes fell. The releases came a day after the Federal Reserve cut its U.S. growth forecast and a survey showed manufacturing in China may shrink for an eighth month.
The MSCI Asia-Pacific Index (MXAP) lost 10 percent through yesterday from this year’s highest level in February amid signs global economic growth was slowing as Europe struggled to contain its debt crisis.
HSBC Holdings Plc may be active in Hong Kong trading after it was among banks named by Moody’s Investors Service that have stronger buffers than many of their peers in the form of earnings from other, generally more stable businesses.
Spain, the largest euro-zone nation to seek a bailout, will have to seek funds of as much as 100 billion euros ($125 billion) by July 25, according to Luxembourg Prime Minister Jean-Claude Juncker, who chairs a group of euro region finance ministers. The loans will be paid for from the euro-region’s temporary aid fund if the permanent rescue mechanism, due to come into effect on July 9, isn’t ready, he said.
Declines in stocks left the Asian benchmark gauge trading at 1.2 times book value through yesterday, compared with 2.1 times for the S&P 500 and 1.4 times for the Stoxx 600, according to data compiled by Bloomberg. A number below one means companies can be bought for less than value of their assets.
The Thomson Reuters/Jefferies CRB Index of raw materials retreated 2.1 percent yesterday. The S&P GSCI commodities gauge slid to the lowest level since 2010 and is down 22 percent from a February peak. Oil fell below $80 a barrel for the first time in eight months.
The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese companies in New York dropped 3.5 percent to 89.90 yesterday, the steepest slump since Nov. 21.
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