Asia Stocks Fall as World Outlook Damps China Easing Speculation

January 12, 2012, 12:30 AM EST By Jonathan Burgos

Jan. 12 (Bloomberg) -- Asian stocks fell, with a regional benchmark index snapping three days of gains, as weaker Japan trade data added to evidence of a global slowdown, damping speculation that lower inflation in China may result in looser monetary policy.

Sony Corp., Japan’s biggest exporter of consumer electronics, fell 2.5 percent after the nation’s current-account surplus narrowed. QBE Insurance Group Ltd. plunged 13 percent in Sydney after saying 2011 profit dropped as much as 50 percent. Infosys Ltd., India’s second-largest software exporter, tumbled after cutting its sales forecast. Zoomlion Heavy Industry Science & Technology Co., a Chinese construction machinery maker, gained 1.6 percent in Hong Kong.

The MSCI Asia Pacific Index dropped 0.4 percent to 115.9 as of 1:54 p.m. in Tokyo, with three shares falling for every two that rose. The gauge advanced 1.7 percent in the past three days amid bets that China will ease monetary policy. The MSCI Asia Pacific excluding Japan Index was little changed after rising as much as 0.3 percent.

“If inflation keeps coming down, it increases the likelihood that China will deem it appropriate to continue to ease monetary policy,” said Will Seddon, who helps oversee $300 million at White Funds Management in Sydney. “The market has largely digested the possibility of a recession in Europe.”

Regional Indexes

China’s Shanghai Composite Index fell 0.2 percent, reversing gains of as much as 0.8 percent as the nation’s inflation cooled for a fifth straight month in December. Hong Kong’s Hang Seng Index slipped 0.1 percent, after advancing as much as 0.6 percent earlier.

Japan’s Nikkei 225 Stock Average slipped 0.9 percent. Australia’s S&P/ASX 200 Index lost 0.2 percent, with QBE Insurance as the main drag, according data compiled by Bloomberg.

South Korea’s Kospi Index added 0.3 percent and the BSE India Sensitive Index dropped 0.7 percent as Infosys declined.

Futures on the Standard & Poor’s 500 Index slid 0.1 percent today. The gauge was little changed in New York yesterday. The U.S. economic expansion improved last month across most of the country, while hiring was limited and housing remained stagnant, the Federal Reserve said in its Beige Book business survey.

Japanese exporters slid as the nation’s current-account surplus shrank 86 percent from a year earlier as slowing growth in China and Europe and the appreciation of the yen damped demand for Japanese products.

Japan’s Exporters

Sony, the maker of Bravia televisions and PlayStation game consoles, dropped 2.5 percent to 1,316 yen. Toyota Motor Corp., the world’s biggest carmaker by market value, dropped 1.4 percent to 2,589 yen. Canon Inc., the No. 1 camera maker, slipped 1.4 percent to 3,240 yen.

Infosys sank 6.7 percent to 2,636.55 rupees. The company reduced its full-year forecast for sales in dollar terms, citing weaker demand in developed economies including Europe.

The MSCI Asia Pacific Index gained 2.1 percent this year through yesterday, compared with a 2.8 percent advance by the S&P 500 and a 2.2 percent increase by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 12.2 times estimated earnings on average, compared with 12.3 times for the S&P 500 and 10 times for the Stoxx 600.

QBE Insurance tumbled 13 percent to A$11.30 in Sydney, the biggest decline on the regional benchmark index. The company said 2011 profit fell as much as 50 percent on record natural disaster claims and losses on bond investments.

‘Falling Knife’

“There won’t be too many brave investors stepping in to catch this falling knife,” Peter Esho, Sydney-based chief market analyst at City Index Ltd., a London-based provider of trading services in bonds, stocks and commodities, said in a note. “The number of catastrophes in such a short period of time have finally caught up to hurt the group’s bottom line.”

Chinese construction companies and machinery makers advanced after China’s inflation cooled to a 15-month low and producer-price gains were the smallest in two years in December, leaving the government more room to support growth as a global slowdown hurts exports.

Zoomlion Heavy gained 1.6 percent to HK$9.58 in Hong Kong. China Communications Construction Co., a builder of transport infrastructure, increased 2.2 percent to HK$6.85.

Solar energy producers surged after the China said it plans to start developing 3 gigawatts of solar power capacity in the five years through 2015.

GCL-Poly Energy Holdings Ltd., a Chinese producer of polysilicon used in solar panels, jumped 14 percent to HK$2.50. Trony Solar Holdings Co Ltd., a panel maker, climbed 8.3 percent to HK$1.17.

OCI Co., a South Korean supplier of polysilicon, surged 15 percent to 255,000 won in Seoul, the most on the MSCI Asia Pacific Index. Unit OCI Solar Power said it plans to build 400 megawatts of solar energy projects for CPS Energy in Texas.

--Editors: Nick Gentle, Jim Powell

To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net

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U.S. Stocks Fall as Bernanke Damps Speculation on More Stimulus

July 14, 2011, 12:57 PM EDT By Nikolaj Gammeltoft and Victoria Stilwell

July 14 (Bloomberg) -- U.S. stocks fell, driving the Standard & Poor’s 500 Index to the lowest level of the month, as Federal Reserve Chairman Ben S. Bernanke said he’s not prepared to take immediate action to stimulate the economy.

Raw-material producers and industrial companies were the biggest drags on the market among the 10 main industries in the Standard & Poor’s 500 Index, which erased a gain of as much as 0.7 percent. JPMorgan Chase & Co. rallied 2.7 percent to lead advances in the Dow Jones Industrial Average after investment banking profit surged and more customers paid their credit-card bills on time.

The S&P 500 slipped 0.4 percent to 1,312.59 at 12:23 p.m. in New York after falling to 1,311.98, its lowest level since June 30. The Dow dropped 22.10 points, or 0.2 percent, to 12,469.51 after surging 90 points following JPMorgan’s report.

“The market is going to be volatile until we get the situation in Washington resolved,” said Don Wordell, a fund manager for Atlanta-based RidgeWorth Capital Management, which oversees about $48 billion. “Earnings have been coming in pretty good and corporate balance sheets are in great shape,” he said in a telephone interview. “The economic data reports were positive.”

Bernanke testified for a second day before lawmakers after saying yesterday he’s prepared to provide more stimulus if needed. Bernanke said today that inflation now is “higher” and “closer” to the central bank’s informal target than was the case in August and that’s one reason why the Fed won’t immediately embark on a third round of bond-buying.

“We’re not prepared at this point to take further action,” he told the Senate Banking Committee.

Fed Stimulus

The S&P 500 has rallied 95 percent since March 2009 as the Fed used large-scale asset purchases to buoy the economy and companies posted earnings that beat analysts’ estimates. The index has still fallen 3.4 percent since April 29 this year on concern the economic recovery is at risk and as Europe’s sovereign-debt crisis grows.

Stocks were also pressured today after Moody’s Investors Service said late yesterday the U.S. government may lose the Aaa credit rating it’s held since 1917 on concern the country’s debt limit will not be raised in time to prevent a missed payment of interest or principal. President Barack Obama is considering summoning congressional leaders to Camp David this weekend to work on a plan to raise the debt ceiling after yesterday’s negotiations on a deficit-cutting plan of at least $2 trillion stalled, two people familiar with the matter said.

’Game of Chicken’

“Rating agencies don’t tell us anything we don’t know, but Moody’s warning underlines the seriousness of the situation and the game of chicken at Capitol Hill,” said Philip Marey, senior U.S. economist at Rabobank in Utrecht, the Netherlands.

Equities gained after government data showed retail sales unexpectedly increased and jobless claims fell more than economists estimated, bolstering confidence in the economy.

The 0.1 percent increase in retail sales reported by the Commerce Department compared with the median forecast of a 0.1 percent drop in the Bloomberg News survey of 80 economists. Excluding auto sales, purchases were little changed, the weakest performance since July 2010. Separate data showed initial jobless claims fell by 22,000 to 405,000 last week.

Earnings are gaining attention as more companies post second-quarter results. S&P 500 profits are forecast to have grown 13 percent in the quarter, the smallest increase in two years, according to data compiled by Bloomberg.

“The market is being driven by macro events such as the U.S. and European debt crises,” Giri Cherukuri, who helps manage $2.6 billion as money manager and head trader at Oakbrook Investments in Lisle, Illinois, said in a telephone interview. “But we’re heading into the heart of earnings season, and people are getting ready for a change towards a market that’ll be focused on the earnings reports of major companies.”

JPMorgan Earnings

JPMorgan, the second-largest U.S. bank, advanced 2.7 percent to $40.70 after the New York-based bank reported its highest half-year profit ever, at almost $11 billion. Second- quarter net income climbed 13 percent from a year earlier, to $5.43 billion, or $1.27 a share, six cents higher than the average estimate of analysts surveyed by Bloomberg.

ConocoPhillips jumped 4.2 percent to $77.49. The Houston, Texas-based oil company said it will separate its refining and marketing and exploration and production businesses.

Yum! Brands Inc. climbed 0.9 percent to $56.07 as the owner of the KFC and Pizza Hut restaurant chains boosted its earnings forecast for the year on increasing customer traffic at restaurants in China.

Hartford Financial Services Group Inc. declined 2.3 percent to $25.02. The seller of life insurance and property-casualty coverage said second-quarter net income plunged on catastrophe claims and the cost of asbestos liabilities.

Marriott International Inc. declined 8.4 percent to $34.02 after forecasting earnings that fell short of estimates. The largest publicly traded U.S. hotel chain said third-quarter earnings won’t be higher than 29 cents a share, missing the 30- cent average analyst projection.

--Editors: Jeff Sutherland, Michael Regan

To contact the reporters on this story: Nikolaj Gammeltoft in New York at ngammeltoft@bloomberg.net; Victoria Stilwell in New York at vstilwell@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net

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Egypt Shares Rise on Speculation Drop Overdone; Gulf Stocks Drop

June 05, 2011, 11:38 AM EDT By Zahra Hankir and Ahmed A Namatalla

June 5 (Bloomberg) -- Egypt shares rose the most in a week on speculation the recent drop was overdone as the exchange said a government plan to impose capital gains tax applies only to dividend distributions and not to profit from stocks trading.

Orascom Construction Industries, Egypt’s biggest publicly traded property builder, jumped 2.5 percent. Commercial International Bank Egypt SAE advanced the most in a week. The EGX 30 Index gained 1.6 percent, the most since May 29, to 5,445.01 at the 2:30 p.m. close in Cairo. The measure slumped 2.7 percent on June 2 after the government unveiled the capital gains tax on dividends and higher corporate tax bracket to curb the budget deficit. In the Persian Gulf, the Bloomberg GCC 200 Index declined 0.3 percent.

“The negative effect we saw last week from the capital gains tax announcement was very short-lived because the market is still trading at a discount and small investors now see that their trading profits will not be affected,” said Ashraf Akhnoukh, senior equity sales trader at Cairo-based Commercial International Brokerage. “There still remains a growth story here.”

The bourse is studying the capital gains tax plan and will discuss it with the business community and the markets regulator before advising the government, the exchange said June 2. The 24 percent decline in Egypt’s shares this year has left the 30 companies on the benchmark index valued at an average 7.7 times estimated earnings, data compiled by Bloomberg show. That compares with 11.1 times for the MSCI Emerging Markets Index.

Budget Deficit

Egypt is trying to rein in a widening budget deficit as the North African country raises subsidy spending and salaries of state employees to meet public demand for improving living standards after a popular revolt ended 30 years of rule by former President Hosni Mubarak in February.

Orascom Construction advanced the most since May 29 to 268.04 Egyptian pounds. Commercial International, the biggest publicly traded bank by assets, rose 1.4 percent, the most since May 29, to 30.39 pounds.

Qatar’s QE Index retreated 1 percent, while Kuwait’s index dropped 0.8 percent. Oman’s gauge declined 0.6 percent and Dubai’s DFM General Index was little changed. Abu Dhabi’s ADX General Index lost 0.2 percent and Bahrain’s measure slipped 0.1 percent. Saudi Arabia’s Tadawul All Share Index gained less than 0.1 percent.

Israel’s TA-25 measure advanced 0.2 percent in Tel Aviv. The benchmark Mimshal Shiklit government bond due January 2020 declined, pushing the yield two basis points higher, or 0.02 percentage point, to 5.09 percent.

--With assistance from Alaa Shahine in Dubai. Editors: Shaji Mathew, Shanthy Nambiar

To contact the reporters on this story: Zahra Hankir in Dubai at zhankir@bloomberg.net; Ahmed A Namatalla in Cairo at anamatalla@bloomberg.net

To contact the editors responsible for this story: Shanthy Nambiar at snambiar1@bloomberg.net; Claudia Maedler at cmaedler@bloomberg.net

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European Stocks Climb on Greek Aid Speculation; Alpha Bank Jumps

May 31, 2011, 7:16 AM EDT By Sarah Jones

May 31 (Bloomberg) -- European stocks climbed after the euro rallied to a three-week high as investors speculated that European officials will sanction additional financial assistance for Greece. U.S. futures and Asian shares advanced.

Alpha Bank SA and EFG Eurobank Ergasias SA led a rally in Greek banks, climbing more than 5 percent in Athens trading. Vestas Wind Systems A/S led alternative-energy stocks higher for a second day. Steelmakers also advanced after Voestalpine AG posted higher full-year profit.

The Stoxx Europe 600 Index rose 0.9 percent to 281.43 at 11:51 a.m. in London, paring this month’s loss to 0.9 percent. The gauge has fallen for four straight weeks amid speculation that Greece will restructure its debt. Since reaching this year’s high on Feb. 17, the Stoxx 600 has retreated 3.3 percent.

“We have gone through a period in which a lot more pessimism surrounding this topic has come into the market and we are seeing something of a rebound off the back of that,” said Valentijn Van Nieuwenhuijzen, head of strategy at ING Investment Management, in a Bloomberg Television interview. “The likelihood of an explosion of the Greek situation over the next couple of months seems to have come down.”

The euro rallied against the dollar after Luxembourg Prime Minister Jean-Claude Juncker said European leaders will decide on a new aid package for Greece by the end of next month, while also ruling out a “total restructuring” of the nation’s debt. Junker spoke yesterday in Paris.

Inspectors from the European Union, the International Monetary Fund and the European Central Bank plan to conclude their review of Greece’s progress in meeting the terms of last year’s 110 billion-euro ($158 billion) bailout in the coming days. The EU will then formulate its plan for additional aid.

German Demands

The Wall Street Journal said Germany may stop demanding that Greece reschedules its bonds so that the Mediterranean nation can get a new package of loans. The newspaper cited unidentified people.

European stocks were little changed yesterday in reduced trading after U.K. and U.S. markets were closed for public holidays. Futures on the Standard & Poor’s 500 Index expiring next month advanced 1 percent today, while the benchmark MSCI Asia Pacific Index climbed 1.4 percent.

A U.S. report today may show that home prices in the world’s largest economy slumped in March by the most in 16 months, according to economists. The Case-Shiller report is due at 9 a.m. New York time. Separate figures may show manufacturing slowed in May, while consumer confidence improved.

German Retail Sales

In Europe, German retail sales rose in April as unemployment fell below 3 million for the first time in almost 19 years. Separate figures from the European Union’s statistic office showed that inflation in the euro area slowed in May to 2.7 percent from 2.8 percent in April, giving the ECB room to keep borrowing costs on hold next month.

Alpha Bank, Greece’s third-biggest lender, rallied 5.8 percent to 3.08 euros in Athens, while Eurobank, the country’s second-largest bank, surged 8 percent to 3.10 euros. Both stocks tumbled more than 6 percent yesterday as the IMF reviewed Greece’s efforts toward meeting fiscal targets.

Standard Chartered Plc rose 1.8 percent to 1,634.5 pence after Nomura Holdings Inc. raised its recommendation for the U.K. bank that makes the majority of its profit in Asia to “buy” from “neutral,” saying the firm remains “well positioned’ for the long term.

Analysts also raised their price estimate for the shares to 1,800 pence from 1,770 pence. The revised projection is 12 percent higher than last week’s closing price.

Vestas, Solarworld, Q-Cells

Vestas rallied 5.5 percent to 159.30 kroner in Copenhagen, while Germany’s Solarworld AG advanced 2.5 percent to 9.86 euros and Q-Cells SE surged percent 7.8 percent to 2.07 euros.

Alternative energy stocks rallied for a second day after Germany yesterday set 2022 as the final date to close its nuclear reactors, making it the largest nation to abandon atomic power.

Voestalpine advanced 2.8 percent to 34.25 euros after Austria’s largest steelmaker said fiscal full-year profit rose almost five-fold to 512.7 million euros as the global economy improved.

‘‘Further positive economic development in the second half of calendar year 2011 can be expected,” the company said. “Against this backdrop a further significant improvement of Voestalpine results should be possible in 2011/12.”

Kloeckner & Co. SE, the German steel trader operating in 15 countries in Europe and North America, gained 1.2 percent to 20.34 euros and ArcelorMittal, the world’s largest steelmaker, rose 1.5 percent to 23.24 euros. Salzgitter AG, Germany’s second-biggest steelmaker, jumped 3.1 percent to 51.62 euros.

Barratt, Britvic

Barratt Developments Plc, the U.K.’s biggest homebuilder by volume, climbed 2.5 percent to 115.3 pence after the Centre for Economics & Business Research forecast that U.K. house prices will rise 16 percent over the next four years after slipping 1.4 percent in 2011. Taylor Wimpey Plc rose 1.2 percent to 36.8 pence.

Britvic Plc increased 1.4 percent to 439.1 pence after Deutsche Bank AG raised its share price estimate for the maker of Robinsons’ fruit drinks by 5.6 percent to 475 pence.

Wolseley Plc jumped 4.1 percent to 2,072 pence after the Sunday Times reported that the supplier of heating and plumbing products will sell three of its U.K. business for 300 million pounds ($495 million). The newspaper did not say where it got the information.

--With assistance from Linzie Janis in London. Editors: Will Hadfield, Andrew Rummer

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

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