Asia Stock Futures Indicate Weekly Fall on Fed, China ConcernAdam Haigh
Stock futures in Japan, Hong Kong and Australia declined, indicating the regional equities benchmark will extend this week’s slide, amid concern the Federal Reserve will reduce stimulus and as China’s cash crunch worsened.
American Depositary Receipts of Canon Inc., a Japanese camera maker that gets 80 percent of sales abroad, slid 2 percent. ADRs of Cathay Pacific Airways Ltd., the world’s largest cargo and freight carrier, sank 3 percent. Those of BHP Billiton Ltd., the No. 1 mining company, declined 1.6 percent.
Futures on Japan’s Nikkei 225 Stock Average expiring in September closed at 12,805 in Chicago, down from 13,030 at the close in Osaka, Japan. They were bid in the pre-market at 12,830 in Osaka at 8:05 a.m. local time. Futures Australia’s S&P/ASX 200 Index retreated 1.7 percent and New Zealand’s NZX 50 Index fell 1.3 percent. Futures on Hong Kong’s Hang Seng Index slid 1 percent.
“The exit from easy monetary policy has begun,” Salman Ahmed, a London-based global strategist at Lombard Odier Investment Managers, which oversees $46 billion, said in an e-mail. “The eventual exit path is uncertain as it will depend on how the U.S. economy evolves from here.”
Futures contracts on the Hang Seng China Enterprises Index of mainland Chinese companies trading in Hong Kong retreated 0.7 percent. The Bloomberg China-US Equity Index of the most-traded Chinese shares in the U.S. dropped 3.6 percent in New York yesterday. The Hang Seng Index yesterday erased all gains since Sept. 13, when the Fed pledged to keep buying assets until it saw “ongoing, sustained improvement” in the U.S. labor market.
Fed Chairman Ben S. Bernanke said this week the central bank may start reducing stimulus measures this year if the economy achieves the sustainable growth the Fed has sought since the recession ended in 2009.
Markets across the Asia-Pacific region tumbled yesterday, with declines deepening after China’s interbank lending rates soared as the monetary authority refrained from using open-market operations to address a cash crunch in the world’s second-largest economy and a preliminary survey showed a slump in manufacturing.
The People’s Bank of China added 50 billion yuan ($8.2 billion) to the financial system yesterday after a cash squeeze drove money-market rates to record highs, said Hao Hong, chief China strategist at Bank of Communications Co.
The sum was supplied to a single lender through short-term liquidity operations and more banks were in talks to obtain financing, Hong said in a telephone interview, adding that this is “proper and appropriate” use of the mechanism. A PBOC press official said he was unaware of the matter, requesting anonymity in keeping with bank policies.
The MSCI Asia Pacific Index, the benchmark regional equities gauge, lost 1.4 percent this year through yesterday. That left the gauge trading at 12.3 times average estimated earnings compared with 14.4 for the Standard & Poor’s 500 Index and 12.6 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Futures on the Standard & Poor’s 500 Index were little changed. The S&P 500 fell 2.5 percent yesterday, posting its biggest loss since November 2011, as global equities tumbled after the Federal Reserve said it may phase out stimulus and China’s cash crunch worsened.
About 9.4 billion shares changed hands yesterday in the U.S., the highest volume of the year, according to data compiled by Bloomberg.