The euro weakened for the first time in four days, U.S. equity futures fell and oil slid after Standard & Poor’s cut Spain’s sovereign credit rating. South Korean shares rallied as Samsung Electronics Co. posted higher-than-estimated profit.
The euro lost 0.1 percent to $1.3203 as of 9:27 a.m. in Tokyo. The dollar strengthened against most of its major counterparts. S&P 500 Index futures sank 0.4 percent, while South Korea’s Kospi index rose 0.4 percent. The MSCI Asia Pacific Index was little changed. Oil retreated from near a four-week high, losing 0.4 percent.
Spain’s sovereign credit rating was cut to BBB+ from A by S&P on concern the nation will have to provide further fiscal support to the banking sector as the economy contracts. The Bank of Japan holds a policy meeting today that may result in an expansion of bond purchases, according to all 14 economists surveyed by Bloomberg. More than 100 companies in the MSCI Asia Pacific Index are scheduled to report earnings today, including Industrial & Commercial Bank of China Ltd. and Honda Motor Co.
“It does look as if the Spanish crisis is set to get worse before it gets better,” said Mike Jones, a currency strategist at Bank of New Zealand in Wellington. “The knee-jerk reaction from the euro to the downgrade has been to the downside. It’s also taken some of the heat out of investors’ risk appetite.”
Spain’s Credit Rating
Spain’s short-term rating was lowered to A-2 from A-1, while the outlook on the long-term rating is negative, New York-based S&P said in a statement yesterday. Nobel Prize-winning economist Joseph Stiglitz said that Europe is in a “dire” situation as a focus on austerity pushes the continent toward “suicide.”
Samsung, Asia’s largest consumer-electronics maker, gained 1.3 percent. Japan Tobacco Inc. slid 2.1 percent in Tokyo. Asia’s largest listed cigarette maker by market value forecast this year’s annual profit will fall 1 percent, missing analysts’ estimates.
PetroChina Co. shares may be active after the country’s biggest oil producer reported an unexpected profit increase after it boosted oil and gas production. Bank of China Ltd. shares may move. The nation’s third-biggest lender by assets said profit growth slowed to 10 percent in the first quarter.
Declines in S&P 500 futures suggest the equity index may snap a three-day streak of gains, the longest in a month. The U.S. economy expanded at a 2.5 percent annual rate in the first quarter, after a 3 percent advance in the final three months of 2011, according to the median forecast of economists surveyed by Bloomberg News ahead of a Commerce Department report today.