Stocks end week lower; Tokyo Electric Power falls 24% after reporting earnings loss
City Index June 6, 2011 7:45 PM
<p>Asian stocks declined for a third day, taking last week’s leads, while the Dollar Index touched a one-month low as a slowdown in US jobs […]</p>
Asian stocks declined for a third day, taking last week’s leads, while the Dollar Index touched a one-month low as a slowdown in US jobs growth fueled concern that the recovery in the world’s largest economy is faltering. The MSCI Asia Pacific Index fell 0.2% to 133.74 as of 11.05 am in Tokyo. Around three shares retreated for every one that rose on MSCI’s Asia Pacific Index, helping extend the gauge’s five-week slump. Japan’s Nikkei 225 Stock Average dropped 0.9% and Australia’s S&P/ASX 200 Index lost 0.5%. Financial markets in China, Hong Kong, South Korea, New Zealand and Taiwan are shut for holidays today.
In corporate news, Tokyo Electric Power – operator of the Fukushima nuclear plant that was damaged by the March earthquake and subsequent tsunami – plunged 24% after it reported a full-year net loss of around 570 billion yen ($7.1billion). Yields on Tepco’s euro-denominated 4.5% notes due in March 2014 advanced 0.8 basis-points to a record 13.03% today, according to BNP Paribas SA prices. The yields were 2.77% a day before the quake.
Staying in that market, Japan Airlines (JAL) – the nation’s biggest international carrier – said ticket sales in Europe and the US were lagging behind forecasts and would take a ‘very long’ time to recover from the March 11 earthquake and tsunami. JAL and overseas carriers including United Continental Holdings and AMR Corp’s American Airlines cut Japan flights after the March 11 earthquake as concerns about radiation leaking from a crippled nuclear plant north of Tokyo deterred visitors.
In currency news, the Singapore dollar and Malaysia’s ringgit both strengthened the most in a week, buoyed by expectations regional policy makers will favor currency appreciation and higher interest rates to contain inflation as their economies expand. They gained 0.4% to S$1.2287 versus the greenback and 0.3% to 3.0015, respectively. The Reserve Bank of Australia is due to meet at its monthly meeting tomorrow.
Yields on July and August interbank cash rate futures advanced last week for the first time in a month after a gross domestic product report showed demand expanded 1.3% in the first quarter, more than twice as much as in the prior period. June contracts show traders are betting RBA Governor Glenn Stevens will leave the central bank’s target interest rate at 4.75% tomorrow, where its been since November.
Metals gained on the LME, with zinc rallying 1.2%. Copper gained 0.4%, lead rose 1.2% and nickel climbed 0.3%. Cash silver jumped 1.3% to $36.7075 an ounce, bound for a second day of gains. Wheat for July delivery rose 0.4% to $7.77 a bushel, extending a two-day, 1.9% rally. Crude oil for July delivery was little changed at $100 a barrel on the New York Mercantile Exchange before the next OPEC meeting that’s been scheduled for June 8.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.