BLBG:Stocks in Europe Drop as Euro Weakens Before Deadline for Greek Agreement
European stocks fell for the first time in five days and the euro weakened before a deadline for Greece to reach a deal with its creditors. Asian stocks climbed after data showed higher-than-expected U.S. jobs growth.
The Stoxx Europe 600 Index lost 0.3 as of 8:27 a.m. in London. Standard & Poor’s 500 Index futures slid 0.4 percent, while the MSCI Asia Pacific Index (MXAP) added 0.5 percent. The euro retreated 0.6 percent against the U.S. currency and the Australian and New Zealand dollars fell. Oil lost 0.8 percent, while gold rose 0.2 percent, rebounding from the biggest slump in five weeks on Feb. 3.
Greek Prime Minister Lucas Papademos struck a tentative deal with party leaders to extend spending cuts after euro-area finance chiefs told them an increase in the 130 billion-euro ($170 billion) aid package wasn’t forthcoming. Greece’s leaders will meet today to complete an accord as international creditors imposed an 11 a.m. deadline in Athens for a final deal.
“The movement in euro is directly related to the concerns in the market that Greece may not get an agreement,” said Emma Lawson, a currency strategist at National Australia Bank Ltd. in Sydney. “There is some hesitation in the currency market” before today’s response.
France plans to sell as much as 8.5 billion euros ($11 billion) of bills today. Indonesia’s economy expanded 6.46 percent last year amid rising investment and domestic spending, according to a report from the statistics bureau in Jakarta. The growth was the fastest since 1996, based on International Monetary Fund data.
U.S. Jobs
The S&P 500 closed at a six-month high on Feb. 3 after data showed U.S. employers added 243,000 jobs last month, the most since April. The unemployment rate dropped to 8.3 percent, the lowest since February 2009. Treasury 10-year yields were little changed at 1.91 percent today.
Asian stocks pared gains after the International Monetary Fund said China’s economic expansion would be cut almost in half if Europe’s debt crisis worsens. That scenario would warrant “significant” fiscal stimulus from the nation’s government, the IMF said. The Shanghai Composite Index was little changed.
Panasonic Corp., the world’s largest maker of plasma televisions, jumped 6.3 percent after saying profit may recover after a record loss. Nikon Corp. (7731) surged 11 percent. The world’s second-biggest maker of professional-grade cameras raised its profit forecast on higher-than-expected sales.
Aussie, Kiwi
Australia’s dollar weakened 0.6 percent to $1.0713 after a government report showed retail spending unexpectedly declined, adding to the case for the Reserve Bank to lower interest rates tomorrow. New Zealand’s dollar fell 0.8 percent to 83.03 cents.
Crude for March delivery fell to $97.03 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude’s premium to West Texas Intermediate widened for an eighth day after militants in Nigeria, Africa’s biggest crude producer, attacked and damaged a pipeline belonging to a unit of Italy’s Eni SpA. Rubber rose 2.8 percent to 323.40 yen a kilogram, the biggest advance since Jan. 20.
Gold gained to $1,729.18 an ounce. Speculators have raised bullish bets on commodities to a 12-week high on signs that global growth will boost demand. Money managers expanded their combined net-long position across 18 U.S. futures and options by 11 percent to 823,917 contracts in the week ended Jan. 31, Commodity Futures Trading Commission data show.
“In the second half of last year, talk was all about whether the U.S. will go back into a recession,” said Andrew Pease, Sydney-based chief investment strategist for the Asia- Pacific region at Russell Investment Group, which manages about $150 billion. “Now I think talk will be about what will be the strength of the recovery in the U.S. That’s an important shift in the balance of risk.”
To contact the reporters on this story: Lynn Thomasson in Hong Kong at lthomasson@bloomberg.net; Masaki Kondo in Singapore at mkondo3@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
