Japan Stock Futures Drop on Sony Loss, Europe Recovery Concern

Japanese stock futures fell after Sony Corp. posted an unexpected loss and European Central Bank President Mario Draghi said the euro’s strength could hamper an economic recovery, damping the profit outlook for exporters.

American Depositary Receipts of Sony lost 7.4 percent as Japan’s largest consumer-electronics maker posted an eighth straight quarterly loss and cut sales targets for TVs, gaming devices and compact cameras. ADRs of Fujitsu Ltd., a Japanese maker of computers, network equipment and mobile phones, gained 5.1 percent after saying it will eliminate 5,000 jobs and merge its LSI chip business with that of Panasonic Corp. to boost global competitiveness.

Futures on Japan’s Nikkei 225 Stock Average expiring in March closed at 11,335 in Chicago yesterday, down from 11,390 at the close in Osaka, Japan. They were bid in the pre-market at 11,320 in Osaka at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index retreated 0.1 percent and New Zealand’s NZX 50 Index advanced 0.5 percent.

“Europe looks like being the scapegoat once more for the market’s pullback,” said Evan Lucas, Melbourne-based market strategist at IG Markets Ltd., a provider of trading services. “The current rally has been going for over seven months and investors are looking for any reason to justify a pullback.”

The MSCI Asia Pacific Index, the benchmark regional equities gauge, rallied 13 percent in the past seven months through yesterday. That left the gauge trading at 14.8 times average estimated earnings compared with 13.6 for the Standard & Poor’s 500 Index and a multiple of 12.2 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Asian Earnings

Of the 275 firms on the MSCI Asia Pacific index that have reported earnings so far this quarter and for which Bloomberg has estimates, 52 percent have exceeded profit expectations. Some 53 percent have missed sales projections, the data compiled by Bloomberg show.

Hong Kong’s market will be shut three days next week for the Chinese New Year holidays, while mainland markets will be closed all week. The Bloomberg China-US Equity Index of the most-traded Chinese shares in the U.S. dropped 1.8 percent to 96.04 in New York yesterday.

January inflation data is due to be released by China’s statistics bureau today. Consumer prices probably rose 2 percent from a year earlier, decelerating from a 2.5 percent pace a month earlier, according to the median estimate of 35 analysts in a Bloomberg survey.

In Europe, Draghi told reporters growth risk continues to be on the “downside,” accommodative ECB policy will support the economy and the recent strength of the euro creates risks that inflation will slow. An economic recovery should begin later this year as an absence of inflation risks allows the ECB to maintain record-low interest rates, he said yesterday.

Futures on the Standard & Poor’s 500 Index were little changed. The gauge slid 0.2 percent yesterday. The S&P 500 has rallied almost 6 percent in 2013 as U.S. lawmakers reached a budget compromise and companies reported better-than-estimated earnings. The benchmark U.S. equity gauge is about 3.7 percent below its record high reached in October 2007 after more than doubling since bottoming in March 2009.

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