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Japan Stocks Fall, Sending Nikkei Down 10% From January Peak; Nikon Drops

by on February 8, 2010

By Masaki Kondo Feb. 9 (Bloomberg) — Japanese stocks fell, driving the Nikkei 225 Stock Average down 10 percent from its peak in January, on renewed concern ballooning budget deficits will worsen Europe’s economy. Nikon Corp., a camera maker that gets 25 percent of its sales from Europe, lost 1.9 percent. Toshiba Corp., the nation’s biggest supplier of nuclear reactors, fell 1 percent after the Nikkei newspaper said the company and its partners lost a bid for Vietnam’s power project. Sumitomo Mitsui Financial Group Inc. jumped 1 percent after posting higher-than-estimated earnings. The Nikkei 225 Stock Average declined 0.5 percent to 9,905.57 as of 9:08 a.m. in Tokyo. The broader Topix index fell 0.4 percent to 879.41. The Nikkei opened at 9,876.61, compared with this year’s high of 10,982.10 reached on Jan. 15. A 10 percent decline from a recent peak is a so-called correction. “Investors are concerned budget deficits will trigger a slowdown in Europe’s economy and that will spread worldwide,” said Fumiyuki Nakanishi , a senior strategist at SMBC Friend Securities Co. “People are looking not into earnings but into the global economy and selling Japanese shares. We have no strong catalyst for individual stocks that can resist a decline in the broad market.” Credit-default swaps, or the cost of insuring against losses on sovereign debt, for Spain and Portugal jumped to a record, according to CMA DataVision. Those for Greece also hovered around an all-time high. The costs were driven up amid concern those nations’ governments will not be able to impose spending cuts to reduce budget deficits. To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net .

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Japan Stocks Fall, Sending Nikkei Down 10% From January Peak; Nikon Drops

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Stocks Rise as Commodities Rally; Australian Dollar Falls on Rate Surprise

by on February 2, 2010

By Justin Carrigan Feb. 2 (Bloomberg) — The Australian dollar dropped after the central bank unexpectedly left interest rates unchanged. European stocks and U.S. futures rose, while German bunds led government bonds lower. Australia’s currency weakened against all 16 of its most- traded peers tracked by Bloomberg as of 10:10 a.m. in London. Europe’s Dow Jones Stoxx 600 Index advanced 0.5 percent. Futures on the Standard & Poor’s 500 Index climbed 0.3 percent. The Reserve Bank of Australia left its key rate at 3.75 percent, defying the forecasts of all 20 analysts in a Bloomberg survey and signaling policy makers want to gauge the strength of the recovery before raising borrowing costs again. Economists anticipate that the European Central Bank and the Bank of England will keep borrowing costs unchanged when they meet later this week. “The fact that the Bank of Australia kept rates on hold against all expectations should be seen as a reality check that central banks are not in to strangle economies even if they are pushing banks to lend,” Simon Quijano-Evans , a strategist at Credit Agricole Cheuvreux in Vienna, wrote in a research note. The Aussie dropped 1.3 percent versus the U.S. dollar and the yen. The dollar was little changed near a seven-month high against the euro. Stimulus Withdrawal Central banks around the world are weighing how soon to withdraw economic-stimulus measures and raise interest rates from record lows. The Bank of England will decide Feb. 4 whether to increase a 200 billion-pound ($319 billion) program of asset purchases designed to revive the economy. The MSCI World Index of 23 developed nations’ stocks added 0.5 percent. The MSCI Asia Pacific Index gained the most in two weeks after U.S. manufacturing expanded more than estimated. Canon Inc., a camera maker that gets about 28 percent of revenue from the Americas, climbed 2.7 percent in Tokyo. Toyota Motor Corp. gained 4.5 percent after the automaker said it will resume some production operations that were halted after recalling 2.3 million cars to fix faulty accelerator pedals. European oil and gas shares fell after BP Plc plunged 4.2 percent. The region’s biggest oil company reported fourth- quarter earnings that missed analysts’ estimates and predicted the recovery from last year’s recession will be “slow and gradual.” Declines were limited as Rio Tinto led a rally in basic resources shares, climbing 2.3 percent. The world’s third- biggest mining company was raised to “buy” from “hold” at Citigroup Inc., which cited upgrades to iron-ore prices. Home Sales U.S. stock-index futures gained 0.2 percent, after the S&P 500 yesterday posted its biggest jump in a month. The number of contracts to buy previously owned U.S. homes was probably little changed in December after a record plunge a month earlier, indicating a renewed tax credit will take time to revive sales, economists said before a report due at 10 a.m. in Washington. A record nine-quarter earnings slump for S&P 500 companies is projected to have ended in the final three months of 2009 with a 76 percent increase in profits. Almost 80 percent of the results released since Jan. 11 topped the average forecasts of Wall Street estimates, data compiled by Bloomberg show. United Parcel Service Inc. and Dow Chemical Co. are among companies reporting earnings today. Paul Volcker, head of the U.S. Economic Recovery Advisory Board, is likely to repeat his call to prohibit commercial banks from owning hedge funds and limit their ability to trade for their own accounts when he testifies to the Senate Banking Committee. Romanian Rates The MSCI Emerging-Markets Index climbed 0.3 percent as Russia’s Micex Index gained 1 percent and Abu Dhabi’s ADX Index advanced 0.8 percent. Taiwan’s Taiex Index dropped 1.3 percent, leading Asian gauges lower. Romania’s BET index rose 0.4 percent as economists predict the central bank will lower its interest rate by half a percentage point tomorrow. Russia is likely to cut its rate by 1 percentage point in “coming months,” Barclays Capital said in a report today. Government bonds fell, with the yield on the U.S. 10-year Treasury rising 2 basis points to 3.67 percent. The yield on the German bund increased 3 basis points to 3.31 percent. Copper for delivery in three months fell 0.1 percent to $6,783.75 a metric ton on the London Metal Exchange. Gold for immediate delivery retreated 0.1 percent to $1,104.80 an ounce. Crude oil added 0.5 percent to $74.76 a barrel in New York. To contact the reporter on this story: Justin Carrigan in London at jcarrigan@bloomberg.net

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European Stocks Drop From 15-Month High, Cadbury Falls; Asian Shares Climb

January 5, 2010

By Daniela Silberstein Jan. 5 (Bloomberg) — European stocks declined after the Dow Jones Stoxx 600 Index rose to a 15-month high yesterday. Asian shares climbed. Cadbury Plc slipped 1.7 percent after Nestle SA agreed to buy a pizza business from Kraft Foods Inc. and said it has no interest in acquiring the U.K. confectioner. Tesco Plc led retailers lower after BofA Merrill Lynch Global Research downgraded the shares. Europe’s Stoxx 600 declined 0.4 percent to 256.64 as of 8:40 a.m. in London. The measure surged 28 percent last year, its biggest annual gain since 1999, boosted by record-low interest rates in the U.S. and Europe and about $12 trillion of commitments from governments worldwide to revive credit markets and stimulate growth. The International Monetary Fund this month will boost its forecast for global economic growth partly because government efforts to prevent a wider financial crisis were successful, Deputy Managing Director John Lipsky said. The gains in equities “could last into January and February this year but at some point we’re going to have to face up that monetary stimulus is going to be withdrawn,” Andy Lynch , who manages $1.8 billion at Schroder Investment Management Ltd. in London, said in a Bloomberg Television interview. “The juice we’ve all been benefiting from is going to be turned off.” The Standard & Poor’s 500 Index rallied the most in almost two months yesterday after the Institute of Supply Management said its factory index climbed more than estimated. Futures on the benchmark gauge for U.S. equities fell 0.1 percent today. Asian Stocks The MSCI Asia Pacific Index advanced 1 percent to a 16- month high, led by companies that rely on the U.S. for growth. Nikon Corp., a camera maker that counts North America as its biggest market by revenue, rose 1.9 percent to 1,868 yen. Cadbury retreated 1.7 percent to 791.5 pence after Nestle, the world’s largest food company, said it won’t make or join an offer for the chocolate maker. Kraft, which is attempting to buy the U.K. company, extended its bid deadline to Feb. 2 and offered more cash in place of stock. Nestle slipped 0.2 percent to 50.85 Swiss francs after the maker of Nescafe coffee and KitKat chocolate bars agreed to buy Kraft’s U.S.-based frozen pizza business for $3.7 billion. Tesco slid 1.9 percent to 420.1 pence after BofA Merrill Lynch downgraded the world’s third-largest retailer to “neutral” from “buy.” Marks & Spencer Group Plc, which was also cut to “neutral” from “buy,” dropped 2 percent to 404 pence. Air Liquide Air Liquide SA fell 1.6 percent to 83.15 euros. The world’s biggest maker of industrial gases has suspended its medium-term target of boosting annual sales by 8 percent to 10 percent because of the economic crisis, La Tribune reported, citing an unidentified person at the company. A report today may show the number of contracts to buy previously owned U.S. homes probably fell in November for the first time in 10 months. The index of signed purchase agreements, or pending home sales, dropped 2 percent after October’s 3.7 percent increase, according to the median estimate in a Bloomberg News survey of 35 economists before today’s release from the National Association of Realtors at 10 a.m. Washington time. Factory orders rose for a third straight month in November, data from the Commerce Department at the same time may show. To contact the reporter on this story: Daniela Silberstein in Zurich at dsilberstei2@bloomberg.net .

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