Japan, Australian Stock Futures Fall Amid China Concerns
Japanese and Australian stock futures fell after a Chinese central bank adviser said growth in the world’s second-biggest economy may slow and Germany’s Vice Chancellor said he’s skeptical European leaders will be able to rescue debt-ridden Greece.
American Depositary Receipts of BHP Billiton Ltd. (BHP), the world’s largest mining company, dropped 1.4 percent as investors sold shares of companies with profits closely tied to economic growth. ADRs of Canon Inc. (7751), a Japanese camera maker that gets 80 percent of its sales outside Japan, slid 1.2 percent. Those of Komatsu Ltd. (6301), which generates a quarter of its revenue in China and Europe, declined 0.5 percent.
Futures on Japan’s Nikkei 225 Stock Average expiring in September closed at 8,610 in Chicago July 20, down from 8,670 in Osaka, Japan. They were bid in the pre-market at 8,570 in Osaka at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index declined 0.5 percent today. New Zealand’s NZX 50 Index was little changed in Wellington. Futures on the Standard & Poor’s 500 Index fell 0.2 percent.
“There are many global macro headwinds,” said George Boubouras, Melbourne-based head of investment strategy at UBS AG’s Australian unit. The Swiss bank has about $1.5 trillion in assets under management. “Risk aversion persists for many investors. Cautious corporate guidance remains, given the many different macro and political challenges.”
Song Guoqing, an academic member of the People’s Bank of China monetary policy committee, predicted the nation’s expansion may cool to 7.4 percent this quarter, adding to concern that the world’s second-biggest economy has yet to bottom out. The adviser to the central bank also warned that a decline in producer prices in tandem with consumer inflation may hurt investment returns of industrial companies, damping their desire to expand.
German Vice Chancellor Philipp Roesler said he’s “very skeptical” that European leaders will be able to rescue Greece. Roesler, who is Germany’s economy minister, told broadcaster ARD that Greece was unlikely to be able to meet its obligations under a euro-area bailout program as its international creditors hold talks this week in Athens. Should that be the case, the country won’t receive more bailout payments, Roesler said.
Concern that growth in China’s economy will slow as Europe’s debt crisis deepens has dragged down the MSCI Asia- Pacific Index by 9.5 percent from this year’s peak in February through July 20. The regional benchmark trades at 11.8 times estimated earnings, compared with a multiple of 13.2 for the S&P 500 Index and 10.8 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Of the 1,671 companies on Japan’s Topix Index, 209 are scheduled to report earnings this week, according to data compiled by Bloomberg News.
The Thomson Reuters/Jefferies CRB Index (CRY) of raw materials retreated 0.1 percent on July 20. The London Metal Exchange Index of prices for six industrial metals including copper and aluminum fell 2.2 percent.
Chinese stocks fell for a third week in New York before Internet companies from Baidu Inc. to Ctrip.com International Ltd. report second-quarter earnings that analysts estimate will show slower profit growth. The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese shares in the U.S. sank 0.6 percent to 86.11 on July 20.
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