BL: Japanese, Australia Stock Futures Decline on Spain's Downgrade; BHP Falls
By Akiko Ikeda and Satoshi Kawano - May 30, 2010
Japanese and Australian stock futures fell after Spain had its credit rating reduced and a U.S. business barometer declined.
American depositary receipts of Mizuho Financial Group Inc., Japan’s third-biggest lender by market value, tumbled 2.2 percent from the closing share price in Tokyo. Those of Sharp Corp., Japan’s biggest maker of liquid-crystal displays that gets almost half of its revenue outside Japan, plunged 2.2 percent. Those of BHP Billiton Ltd., the world’s largest mining company, sank 1.4 percent after metals and oil prices fell.
Futures on Japan’s Nikkei 225 Stock Average expiring in June closed at 9,645 in Chicago on May 28, compared with 9,775 in Singapore. They were bid in the pre-market at 9,650 in Osaka, Japan, at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index sank 0.9 percent today. New Zealand’s NZX 50 Index gained 0.1 percent in Wellington.
“A sense of caution is increasing because financial issues in Europe are spreading and lower-than-expected business sentiment in the U.S. weakened hopes for economic recovery,” said Norikazu Kitta, a strategist at Nikko Cordial Securities Inc. “If government data shows industrial production in Japan is heading for recovery, that should support stocks.”
Japan’s Ministry of Economy, Trade and Industry is scheduled to report industrial production in April at 8:50 a.m. in Tokyo. The output grew 27.4 percent from a year earlier compared with 31.8 percent in March, according to a Bloomberg News survey of economists.
Downgrade on Spain
In New York, the Standard & Poor’s 500 Index tumbled 1.2 percent to 1,089.41 as Fitch Ratings stripped Spain of its AAA credit rating. Energy shares sank on President Barack Obama’s moratorium on new deepwater drilling permits.
Fitch Ratings downgraded Spain’s credit rating one step to AA+ from AAA as the country struggles to cut debt amid a fiscal crisis that prompted the European Union to forge an almost $1 trillion loan package for its weakest economies. Spain’s debt burden is likely to weigh on growth, Fitch said.
The Institute for Supply Management-Chicago Inc. said its business barometer fell to 59.7 this month from 63.8 in April, missing the estimate of 61 by 57 economists in a Bloomberg News survey. Figures greater than 50 signal expansion.
The MSCI Asia Pacific Index has lost 5.8 percent in 2010, compared with drops of 2.3 percent by the S&P 500 and 3.9 percent by the Stoxx Europe 600 Index. Stocks in the benchmark are valued at 14.4 times estimated earnings, compared with 13.4 times for the S&P and 11.4 times for the Stoxx.
The London Metals Index, a measure of six metals including copper and zinc, declined 0.8 percent on May 28. Crude oil for July delivery dropped 0.8 percent to settle at $73.97 a barrel in New York.
To contact the reporters for this story: Akiko Ikeda in Tokyo at iakiko@bloomberg.net; Satoshi Kawano in Tokyo at skawano1@bloomberg.net.
_______________________________________________________
If you take anything I say as advice, you're crazier than I am.
