European, Asian Stocks Fall on Japan Economy; U.S. Futures Drop
Aug. 17 (Bloomberg) -- European and Asian stocks fell as Japan’s economy grew
less than economists estimated, while lower metals and oil dimmed the earnings
outlook for commodities producers. China’s Shanghai Composite Index tumbled the
most in nine months and U.S. index futures slid.
Swedbank AB decreased 3.8 percent as the largest bank in the Baltics said it
will raise 15 billion kronor ($2.1 billion) selling shares. Sony Corp., the
maker of the PlayStation 3 game console, slid 4.1 percent in Tokyo. BHP
Billiton Ltd., the biggest mining company, retreated 3.3 percent as copper fell.
The MSCI World Index lost 1.3 percent at 9:30 a.m. in London. The gauge of 23
developed nations has rallied 52 percent since March 9 as companies from
GlaxoSmithKline Plc to Intel Corp. reported better-than-estimated results and
Germany and France unexpectedly returned to growth in the second quarter.
Japan’s gross domestic product expanded at an annual 3.7 percent pace in the
three months ended June 30, missing the median analyst estimate for a 3.9
percent increase.
“We don’t believe that the underlying macro-economic fundamentals of the G3
economies, that’s Japan, the United States and the European Union, are
sufficient for us to feel that from now we are going to have the beginning of a
secular bull-equity market,” said Andrew Freris, senior investment strategist
for Asia at BNP Paribas Wealth Management. “Investors are beginning to get used
to the fact that there isn’t going to be a significant and fast recovery,” he
told Bloomberg Television in Hong Kong.
European, Asian Stocks
Europe’s Dow Jones Stoxx 600 Index lost 1.7 percent, extending a 0.8 percent
drop last week that snapped four weeks of gains. A 42 percent rebound since
March 9 has left the regional measure valued at 39.5 times the profits of its
companies, near the most expensive since September 2003, data compiled by
Bloomberg show.
The MSCI Asia Pacific Index tumbled 3.2 percent, its biggest decline since
March. China’s Shanghai Composite sank 5.8 percent, the steepest slump since
Nov. 18, as a loss at Yunnan Copper Industry Co. stoked concern this year’s
rally was overdone.
Foreign direct investment in China fell 35.7 percent in July, a 10th straight
month of declines, the Commerce Ministry said in Beijing today, as companies
stalled expansion plans amid the global financial crisis.
Standard & Poor’s 500 Index futures slid 1.8 percent. Colonial BancGroup Inc.,
the Alabama lender facing a criminal probe, had its banking operations closed
by regulators and taken over by BB&T Corp. in the biggest failure since
Washington Mutual Inc. collapsed last year. Regulators also shut two companies
in Arizona, one in Las Vegas and one in Pittsburgh Aug. 14, pushing the tally
of failed U.S. banks this year to 77.
