Wednesday, June 30, 2010

Asian Stocks Fall

Asian Stocks Fall on China Manufacturing, Moody’s Spain Review

By Monami Yui and Shani Raja

July 1 (Bloomberg) -- Asian stocks fell after China manufacturing growth slowed and Moody’s Investors Service placed Spain’s credit rating on review for a possible downgrade, fueling concerns over the strength of the global economy.

Mining companies BHP Billiton Ltd. and Rio Tinto Group, which get at least a fifth of their revenue from China, sank more than 2 percent in Sydney after the Purchasing Managers’ Index, a gauge of Chinese manufacturing, fell more than economists estimated. Nissan Motor Co., which gets 13 percent of its revenue in Europe, sank 1.9 percent in Tokyo after Moody’s said it may lower Spain’s Aaa classification.

“Investors are already finding difficulty traversing the wall of worry,” said Tim Schroeders, who helps manage about $1.1 billion at Pengana Capital Ltd. in Melbourne. “A downgrade of Spanish sovereign debt would be another piece of negative news that adds to demand for perceived safe-haven investments.”

The MSCI Asia Pacific Index dropped 1.1 percent to 111.56 as of 10:40 a.m. in Tokyo. About five times as many stocks fell as rose. The gauge has slumped 13 percent from its high this year on April 15 on concern Europe’s debt crisis and Chinese steps to curb property prices will hurt global growth.

Japan’s Nikkei 225 Stock Average slumped 1.5 percent and South Korea’s Kospi dropped 1 percent. The S&P/ASX 200 Index lost 1.7 percent in Sydney.

Futures on the Standard & Poor’s 500 Index lost 0.6 percent. The gauge yesterday fell 1 percent as ADP Employer Services said companies in the U.S. added fewer workers in June than forecast.

“Investor sentiment is certainly negative and we’ve seen that reiterated in buying of defensive asset classes,” said Chris Weston, head of institutional dealing at IG Markets in Melbourne. “Traders are pricing in a double dip, which is not a healthy stalking ground for equities. In the short term, markets could be oversold and due a bounce.”

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