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Asia Stocks, Europe Futures Retreat

Published: March 7, 2012 | 8:31 am
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Asian stocks fell for a third day, the longest stretch this year, while the euro gained before a deadline on Greece’s debt swap and as Australian growth missed estimates. European equity futures slid.
The MSCI Asia Pacific Index (MXAP) slid 0.8 percent as of 4:11 p.m. in Tokyo. Euro Stoxx 50 Index futures lost 0.2 percent, while Standard & Poor’s 500 Index futures added 0.4 percent. The euro and the yen strengthened 0.2 percent against the dollar. Ten- year Treasury yields rose two basis points to 1.96 percent. Oil advanced 0.5 percent to $105.17 a barrel.

The Greek government said it will use collective action clauses to compel bondholders to accept its debt restructuring if it receives sufficient consents from investors. The goal of the exchange, which runs through March 8, is to reduce privately held Greek debt by 53.5 percent, helping to avert a disorderly default. Australia’s economy grew 0.4 percent in the fourth quarter, half the pace forecast by economists.
“We’ve got concerns that the hedge-fund holders of Greek private debt may create a bit of an issue tomorrow night and that may force Greece to technical default,” said Thomas Averill, managing director in Sydney at Rochford Capital, a currency and interest-rate risk-management company.
Data later today from ADP Employer Services may show U.S. companies added 215,000 workers in February, versus 170,000 in January, according to a Bloomberg survey of economists. German factory orders probably rose for a second month, estimates show.

Asian Stocks

Asian stocks have fallen 3 percent this week, paring the 2012 advance to 9.3 percent. The Hang Seng China Enterprises Index slid 1 percent. China Life Insurance Co. (2628), the nation’s biggest insurer, slumped 6.1 percent in Hong Kong after saying 2011 profit will fall by as much as half on lower investment yield and bigger impairment losses.
Raw-material producers in the MSCI Asia gauge slid 1.2 percent for the biggest drop among 10 industries. BHP Billiton Ltd., the world’s largest mining company, and Rio Tinto Group declined at least 1.5 percent in Australia.
Copper fell for a fourth day, losing 0.1 percent to $8,281 a metric ton on the London Metal Exchange. The Standard & Poor’s GSCI Spot Index of 24 commodities added 0.4 percent, led by zinc, lead and gasoline.

Aussie Dollar

Australia’s currency touched a six-week low against the dollar, falling as much as 0.4 percent before paring declines. Reserve Bank of Australia Deputy Governor Philip Lowe said the central bank has the flexibility to respond if currency strength hurts growth.
South Korea’s won fell 0.2 percent to 1,124.80 per dollar for a third day of declines, the longest losing streak in eight weeks. The currency may weaken 2 percent over the next couple of weeks as global funds pull money from local stocks, Citigroup Inc. wrote in a note to clients today.
“The problems in Europe are casting some concerns over the outlook for export-oriented countries in Asia,” said Yeah Kim Leng, chief economist at RAM Holdings Bhd. in Kuala Lumpur.
The cost of insuring Asia-Pacific bonds from default increased, according to traders of credit-default swaps. The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan climbed 4 basis points to 170, Credit Agricole SA prices show. The index is headed for its highest close since Feb. 2, according to CMA.
The MSCI Emerging Markets Index (MXEF) retreated 0.4 percent. The BSE India Sensitive Index slipped 0.3 percent on concerns election losses for the nation’s ruling party may curb the government’s economic reforms. South Korea’s Kospi Index lost 0.9 percent. The Shanghai Composite Index sank 0.7 percent.

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