Market slumber continues; copper prices surge as demand exceeds supply

<p>The lack of direction continues, with regional markets mixed despite positive offshore leads. The MSCI Asia Pacific Index was 0.2% higher at noon. About five […]</p>

The lack of direction continues, with regional markets mixed despite positive offshore leads. The MSCI Asia Pacific Index was 0.2% higher at noon. About five stocks climbed for every four that fell on the gauge, which last week completed its longest string of weekly losses in two years as concern deepened over Europe’s debt crisis and amid speculation that a slowing global recovery will crimp earnings.

Japan’s Nikkei 225 (NKY) Stock Average fell 0.1%. South Korea’s Kospi Index lost 0.1% and Australia’s S&P/ASX 200 Index slipped 0.2%. Hong Kong’s Hang Seng Index gained 0.3%, while China’s Shanghai Composite Index added 0.3%.

After struggling with two recessions over the past decade and a devastating earthquake last year, New Zealand’s fortunes seem to be turning with the country announcing a much larger-than-expected trade surplus in April. New Zealand needs all the good news it can get, its government is firm on a plan to return to a budget surplus by 2016 and payoff rising national debt. Strong export volumes and a 40% increase to China alone last month will definitely help.

Meanwhile natural disasters in Australia probably cut more than one-percentage-point from economic growth in the first quarter, Treasurer Wayne Swan said ahead of a government report this week on gross domestic product. Swan’s latest estimate was higher than one he made in April that put damage to GDP in the first quarter at 0.75%.

Bank of Japan Governor Masaaki Shirakawa opposed the central bank underwriting of Japanese government bonds for the second time in a week, a day after Fitch Ratings lowered its outlook for the country because of rising levels of government debt.

In corporate news, Samsung Electronics Co. sought a court order to force Apple Inc.  to disclose iPhone and iPad models under development, claiming it needs the information to defend against allegations it copied Apple’s products. Australian listed Tabcorp Group announced a US$ 460 million debt issue in the US private placement market with funding to be allocated for use by its Casino business. Proceeds will be used to pay off bank debt. The move highlights the growing trend by large corporates to exploit the strong currency situation and bypass domestic banks, instead funding balance sheet commitments through the much larger US corporate bond market. Tabcorp did not disclose the margin or any hedging around the debt issues.

The global copper market faces a 377,000 metric ton deficit this year, according to the International Copper Study Group, as demand led by China and other emerging markets outpaces supply. Copper futures in London surged to an all-time high in February. Elsewhere, raw-sugar prices rose to a one-month high on signs of higher demand and an output decline in Brazil, the world’s top producer. Coffee and cocoa fell.

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