Japanese and Australian stock
futures fell as initial optimism over Spain’s bailout plan gave
way to skepticism that the rescue will succeed in taming the
European debt crisis.
American Depositary Receipts of BHP Billiton Ltd. (BHP), the
world’s largest mining company, lost 1.2 percent from the most
recent closing price in Sydney as investors sold shares of
companies with earnings closely tied to economic growth. ADRs of
Canon Inc. (7751), a Japanese camera maker that depends on Europe for
almost a third of its sales, fell 2.7 percent. Those of Sony
Corp. (6758), Japan’s biggest consumer electronics exporter, sank 3.4
percent.
Futures on Japan’s Nikkei 225 Stock Average expiring in
September closed at 8,465 in Chicago yesterday, down from 8,610
in Osaka, Japan. They were bid in the pre-market at 8,470 in
Osaka at 8:05 a.m. local time. Futures on Australia’s SP/ASX
200 Index declined 1.1 percent today. New Zealand’s NZX 50 Index
retreated 0.7 percent in Wellington.
“There appears to be plenty of cynicism,” said George Boubouras, Melbourne-based head of investment strategy at UBS
AG’s Australian wealth-management unit. The Swiss bank has about
$1.5 trillion in assets under management. “Spain will remain
the focus for a few days as markets review all possible outcomes
and implications for other troubled euro-zone members. More
firewalls will be required for other euro-zone countries.”
The MSCI Asia-Pacific Index (MXAP) climbed 1.8 percent yesterday,
its biggest gain since February. The gauge dropped 12 percent
from its peak this year on Feb. 29. through yesterday amid
concern economic growth is slowing in China and the U.S. and as
Europe’s debt crisis intensified.
Spain Bailout
European officials have failed to control the debt crisis
that began in Greece at the end of 2009. Spain two days ago
became the fourth euro-area nation to seek a bailout since the
start of the crisis with a request for as much as 100 billion
euros ($125 billion) to rescue its banks. Premier Mariano Rajoy,
who as recently as May 28 said he wouldn’t seek a rescue,
characterized the deal as a credit line for lenders.
Polls show a June 17 election in Greece may be a close
race. An election on May 6 failed to produce a viable governing
majority. Syriza party leader Alexis Tsipras has pledged to keep
Greece in the euro while scrapping bailout terms in order to end
the hardship brought on by austerity. Meanwhile, pro-bailout
proponents, such as New Democracy leader Antonis Samaras, have
framed the contest as a decision on whether to leave the euro
area.
U.S. Futures
Futures on the Standard Poor’s 500 Index fell 0.1 percent
today. The gauge lost 1.3 percent yesterday in New York after
climbing as much as 0.7 percent in the first minutes of trading.
The MSCI Asia Pacific Index dropped 0.3 percent this year
through yesterday, compared with a 4.1 percent advance by the
SP 500 and a 1.1 percent drop by the Stoxx Europe 600 Index.
Stocks in the Asian benchmark are valued at 1.2 times book
value, compared with 2.1 times for the SP 500 and 1.3 times for
the Stoxx 600, according to data compiled by Bloomberg. A number
below one means companies can be bought for less than value of
their assets.
The Bloomberg China-US Equity Index of the most-traded
Chinese companies in the U.S. dropped 0.3 percent to 90
yesterday.
To contact the reporter on this story:
Adam Haigh in Sydney at
ahaigh1@bloomberg.net
To contact the editor responsible for this story:
Nick Gentle at
ngentle2@bloomberg.net
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