Japan Futures, Australia Stocks Fall on U.S., Greek Debt Concern

Japanese stock futures and Australian equities fell amid concern Greece’s bailout will be delayed and that President Barack Obama’s re-election endangers U.S. tax breaks for investors.

American Depositary Receipts of Canon Inc. (7751), a Japanese camera maker that gets almost a third of its sales in Europe, fell 1.4 percent from the closing price in Tokyo. Shares of Mitsui O.S.K. Lines Ltd. may be active after Moody’s cut the Japanese shipping line’s issuer rating by two levels. BHP Billiton Ltd. (BHP), the world’s No. 1 mining company by market value, dropped 1 percent in Sydney.

Futures on Japan’s Nikkei 225 Stock Average expiring in December closed at 8,770 in Chicago yesterday, down from 8,840 in Osaka, Japan. They were bid in the pre-market at 8,770 in Osaka at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index fell 0.9 percent today. New Zealand’s NZX 50 Index (NZSE50FG) slid 0.2 percent in Wellington.

“Investors have just gotten nervous,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has almost $100 billion under management. “You’ve got residual concern about the U.S. fiscal cliff and this delay in payments to Greece. The worries were there before. It sounds a bit irrational, but that’s the way markets often work. Once they start going down, the falling momentum triggers more selling.”

The MSCI Asia Pacific (MXAP) Index gained about 12 percent through yesterday from this year’s low on June 4 as stimulus measures in Europe, the U.S., Japan and China boosted market sentiment amid a global economic slowdown and Europe’s debt crisis. The Asian benchmark traded at 13.4 times estimated earnings on average, compared with 13.2 for the Standard & Poor’s 500 Index and 12.1 for the Stoxx Europe 600 Index.

U.S. Futures

Futures on the Standard & Poor’s 500 Index added 0.1 percent today. U.S. stocks fell yesterday, sending the Dow Jones Industrial Average to the lowest level since July.

Stocks have tumbled since the re-election of Obama and a split Congress on concern they’ll be unable to compromise and avoid a series of changes that have become known as the fiscal cliff. The Congressional Budget Office released a report yesterday reaffirming its previous projections that allowing scheduled tax increases and automatic spending cuts to take effect would lead to a recession in the first half of 2013. Congress returns to Washington next week for a post-election session that will focus on the fiscal cliff.

Greece Bailout

In Europe, finance ministers may not make a decision on unlocking Euro-area funds for Greece until late November as they await a full report on the country’s compliance with the terms of its bailout, a European Union official said. Finance chiefs won’t make the call to release 31.5 billion euros ($40.1 billion) of aid for Greece that has been frozen since June when they meet in Brussels on Nov. 12, the official said yesterday on condition of anonymity because the deliberations are private.

The Bloomberg China-US 55 Index (CH55BN) of the most-traded Chinese equities in the U.S lost 1.6 percent to 92.42 yesterday in New York, the lowest close since Oct. 10, on concern the country’s incoming leadership may struggle to boost domestic demand as growth ebbs in its export markets.

China’s central bank governor and statistics chief signaled October data to be published from today will show growth improving this quarter in the world’s second-largest economy.

Some indicators are rebounding and the economy is stabilizing, Zhou Xiaochuan, head of the People’s Bank of China, said yesterday in Beijing at a briefing during the Communist Party’s 18th Congress. Ma Jiantang, head of the National Bureau of Statistics, said separately that people will be “more confident” about the fourth-quarter expansion.

The ruling party yesterday started a weeklong meeting to choose its fifth generation of leaders amid signs that the economy is recovering from a seven-quarter slowdown.

To contact the reporters on this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net; Jason Clenfield in Tokyo at jclenfield@bloomberg.net

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

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