Asia Stocks Drop With Oil in China as Copper, Aussie Fall Asian stocks fell with U.S. equity-index futures, Brent crude oil dropped to a two-year low and copper slid after Chinese factory and retail data added to evidence a slowdown is deepening. Australia’s dollar weakened to a more-than five-month low. The MSCI Asia Pacific excluding Japan Index lost 0.8 percent by 10:18 a.m. in Hong Kong, where the Hang Seng China Enterprises Index dropped 1.7 percent. Standard & Poor’s 500 Index futures fell 0.4 percent after the U.S. gauge dropped 0.6 percent Sept. 12. The Aussie retreated a sixth day while Indonesia’s rupiah weakened to a two-month low versus the dollar. Crude in London and New York sank at least 0.7 percent. Copper fell 0.7 percent. Sweden’s krona weakened as the country faced a hung parliament. Royal Bank of Scotland Group Plc cut its 2014 estimate for Chinese economic expansion to 7.2 percent from 7.6 percent after August industrial output growth was the weakest since the global financial crisis. Factory data is due in the U.S., where the fastest increase in retail sales in four months bolstered speculation the Federal Reserve will signal a move toward interest-rate increases at a meeting this week. The Bank for International Settlements warned international borrowing and low volatility are increasing risk for emerging-market assets. “The Chinese data was not ideal at all,” said Mao Sheng, an analyst at Huaxi Securities Co. in Chengdu. “If the Fed were to raise rates earlier than expected, that wouldn’t be good for Asia stocks as there will be an outflow of funds to the U.S.” All 10 industry groups on the Asia Pacific excluding Japan stocks gauge fell today, led by energy and financial companies. Japanese markets are closed today for Respect for the Aged Day. Hang Seng The gauge of Chinese companies listed in Hong Kong, which fell the most since March last week, is heading for its lowest close in more than a month. The Hang Seng Index dropped 1.1 percent and the Shanghai Composite Index slipped 0.4 percent. Factory production in China rose 6.9 percent in August from a year earlier, the statistics office reported Sept. 13, down from 9 percent in July and below the 8.8 percent growth predicted by economists. It was the slowest pace outside the Lunar New Year holiday period of January and February since December 2008. Growth in fixed-asset investment slowed to 16.5 percent, while retail sales expanded 11.9 percent, trailing the 12.1 percent rate estimate and easing from 12.2 percent in July. The data came after reports showed a second straight monthly decline in imports and a 40 percent drop in the broadest measure of new credit. Growth in gross domestic product may ease to between 6.5 percent and 7 percent in the third quarter should data for September also be weak, according to Australia & New Zealand Banking Group Ltd. Aussie, Won The S&P/ASX 200 Index dropped 0.7 percent in Sydney as the Australian dollar fell to as low as 90 U.S. cents, the lowest since March 20. China is Australia’s largest trading partner. South Korea’s Kospi index retreated 0.3 percent, while the won weakened 0.3 percent. The yuan weakened 0.1 percent and the cost of one-year interest-rate swaps, the fixed payment to receive the floating seven-day repurchase rate, fell four basis points, the most since Aug. 26, to 3.57 percent, according to data compiled by Bloomberg. The seven-day repurchase rate dropped seven basis points, or 0.07 percentage point, to 3.19 percent, according to a weighted average compiled by the National Interbank Funding Center. “We continue to believe that the government will rely on further targeted easing measures rather than a broader policy easing to put a floor under the economy,” Frances Cheung and Dariusz Kowalczyk, Hong Kong-based analysts at Credit Agricole CIB, wrote in a note today. Oil Supply Brent fell 0.7 percent to $96.48 a barrel after settling at its lowest level since June 2012 amid concern global fuel consumption is slowing while output climbs. West Texas Intermediate crude sank 1.1 percent to $91.23 today, after slipping 0.6 percent Sept. 12. The International Energy Agency cut its global oil-demand forecast for 2015 last week. Copper for three-month delivery on the London Metal Exchange fell to $6,790 a metric ton, following last week’s 2 percent retreat. Zinc slipped 0.3 percent to $2,269.50 a ton.
Posted on: Mon, 15 Sep 2014 10:05:50 +0000
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