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Japanese Stock Futures, Australian Shares Fall on China Concern

Nov. 17 (Bloomberg) -- Japanese stock futures and Australian shares fell after commodity prices declined on concern that China will take measures to slow its economic growth and that Ireland’s debt crisis is worsening.

American depositary receipts of Mitsubishi Corp., Japan’s largest commodities trader, tumbled 1.9 percent from the closing share price in Tokyo. Those of Komatsu Ltd., a maker of construction equipment which gets about 20 percent of its revenue in China, lost 1.2 percent. BHP Billiton Ltd., the world’s largest mining company, dropped 2 percent in Sydney.

Futures on Japan’s Nikkei 225 Stock Average expiring in December closed at 9,690 in Chicago yesterday, compared with 9,775 in Singapore. They were bid in the pre-market at 9,700 in Osaka, Japan, at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index retreated 0.8 percent today and New Zealand’s NZX 50 Index decreased 0.7 percent in Wellington.

“Pressure to sell stocks, mainly commodity-related shares, will increase,” said Hiroichi Nishi, an equities manager in Tokyo at Nikko Cordial Securities Inc. “There are worries demand will decrease on China’s tightening policies.”

Futures on the Standard & Poor’s 500 Index gained 0.2 percent today. The index decreased 1.6 percent yesterday in New York, the most since Aug. 19.

China will introduce measures to control rising food prices, the China Securities Journal reported before Asian markets closed yesterday, citing an unidentified person.

Commodities Decline

Crude oil for December delivery dropped 3 percent yesterday in New York to $82.34 a barrel, the lowest settlement price since Oct. 29. Copper futures for March delivery tumbled 4.9 percent yesterday, the biggest drop since June 29. The London Metal Exchange Index of prices for six industrial metals including copper and aluminum plunged 6.3 percent yesterday.

Ireland is in talks with European and International Monetary Fund officials about a bailout that would enable the country to inject capital into the country’s banks, said a European official with direct knowledge of the talks. The two-part funding package would mean Ireland wouldn’t have to tap the bond market for an extended period as it tries to cut the budget deficit, said the person, who spoke on condition of anonymity.

The MSCI Asia Pacific Index increased 8.5 percent this year through yesterday, compared with gains of 5.7 percent by the S&P 500 and 4.8 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 14.4 times estimated earnings, compared with 13.9 times for the S&P 500 and 12 times for the Stoxx 600.

The yen depreciated to 83.59 against the dollar about 3 a.m. in Tokyo today, the weakest level since Oct. 5. That boosts the value of overseas income at Japanese companies when converted into their home currency.

“There are hopes that companies will raise their profit forecasts, since the yen is weaker than the level major exporters expect for the second-half period,” said Nikko Cordial’s Nishi. Japan’s fiscal year runs from April to March.

To contact the reporters for this story: Akiko Ikeda in Tokyo at iakiko@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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