Australian Stocks Slip as Europe Talks Continue on Greek Bailout

Australian Stocks Slip as Europe Talks Continue on Greek Bailout
Pedestrians look at electronic stock boards at the Australian Securities Exchange headquarters in Sydney, Australia. Photographer: Sergio Dionisio/Bloomberg

Australian stocks fell, paring yesterday’s biggest surge in the benchmark index in eight weeks, as European officials continue work on an updated aid package for Greece.

Ausdrill Ltd. sank 8.9 percent after saying profit will be impacted by losses related to foreign exchange. Ivanhoe Australia Ltd. dropped 8.5 percent after the mining company controlled by Rio Tinto Group raised about A$75 million ($78 million) at an 8.8 percent discount to its most recent closing price.

Australia’s S&P/ASX 200 Index slipped 0.2 percent to 4,405.20 at 10:15 a.m. in Sydney. The gauge yesterday rose the most since Oct. 2. New Zealand’s NZX 50 Index climbed 0.2 percent in Wellington. Futures on the Standard & Poor’s 500 Index rose 0.2 percent today. Equity markets were closed yesterday in the U.S. for the Thanksgiving holiday. Japan’s stock markets are shut today.

“It is looking like a fairly subdued day,” said Cameron Peacock, Melbourne-based analyst at IG Market Ltd., a provider of trading services for equities, bonds and currencies. “European leaders will be tied up with Greece and European budget discussions for the next few days.”

The MSCI Asia Pacific Excluding Japan Index gained 12 percent in 2012 through yesterday as central banks added stimulus to spur economic growth, data showed a slowdown in China may be ending and concern about Europe’s debt crisis eased. The Asian benchmark traded at 12.6 times estimated earnings on average, compared with 13.4 for the S&P 500 and 12.3 for the Stoxx Europe 600 Index.

Debt Crisis

The region’s debt crisis and a deadlock over Greek aid raise the stakes for European Union budget talks that began in Brussels last night, testing whether the 27-nation bloc is heading for more integration. The main obstacle to unlocking international loans for Greece is a plan to reduce the interest rates charged by euro-area creditors, a Greek official said.

A cut in interest rates would put them below the cost of funding for some euro-area countries, the official told reporters in Brussels on the condition of anonymity. European officials will continue work on an updated aid package for Greece into this weekend in preparation for a Nov. 26 meeting of euro-area finance ministers, said the official.

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