Asian Stocks Deline as Aussie Rallies With Oil, Silver

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Asian shares fell for a second day as a surge in China’s money market rates overshadowed manufacturing that beat economist estimates. The Australian dollar rallied with crude oil and metals.

The MSCI Asia Pacific Index lost 0.2 percent by 1:09 p.m. in Tokyo. Standard & Poor’s 500 Index futures advanced 0.3 percent and FTSE 100 Index contracts climbed 0.4 percent. New Zealand’s dollar and Australia’s currency each gained 0.3 percent. The S&P GSCI Index of 24 commodities added 0.2 percent, rebounding from a 10-week low, as crude, silver and copper increased at least 0.5 percent.

The preliminary 50.9 reading for a private manufacturing gauge in China compared with a 50.4 median estimate from analysts surveyed by Bloomberg News. China’s benchmark money-market rate jumped the most since July for a second straight day as the central bank refrained from adding funds to the market. The euro zone reports factory output today and the U.S. issues jobless claims.

China’s economy is still on course for decent growth, not the kind of spectacular growth that we were used to in the past but enough growth to keep it above the government’s bottom line,” Louis Kuijs, chief China economist at Royal Bank of Scotland Group Plc in Hong Kong, said on Bloomberg Television. “They would like to see rebalancing over time.”

China Repo

The Shanghai Composite Index fell 0.2 percent after dropping 1.3 percent yesterday, and Hong Kong’s Hang Seng Index lost 0.9 percent. China’s seven-day repurchase rate, a gauge of funding availability in the banking system, surged 65 basis points to 4.67 percent in Shanghai, after jumping 44 basis points yesterday, according to a daily fixing by the National Interbank Funding Center.

About five stocks fell for every three that rose on the MSCI’s Asian gauge. Japan’s Topix index dropped 0.4 percent, extending yesterday’s 1.5 percent decline that was the biggest since Oct. 2. New Zealand’s NZX 50 Index slid 0.9 percent. Shares in Thailand and the Philippines also declined.

S&P 500 index (SPX) futures signaled the gauge may rebound after yesterday falling 0.5 percent from a record. Earnings have beaten analyst estimates at 76 percent of the 182 companies in the S&P 500 that have released their results so far this reporting period, while 51 percent exceeded sales projections, data compiled by Bloomberg show. Dow Chemical Co. and McKesson Corp. are among index members scheduled to report results today.

Commodity Currencies

The currencies of commodity-exporting countries climbed and China’s yuan touched a 20-year high of 6.0815 after the manufacturing report. The HSBC Holdings Plc and Markit Economics purchasing managers’ index beat last month’s final reading of 50.2. Levels above 50 signal expansion.

New Zealand’s dollar strengthened against all 16 major peers, climbing to 84.21 U.S. cents after tumbling 1.4 percent yesterday, the most since August and the steepest decline among 16 major currencies tracked by Bloomberg. The Australian dollar increased to 96.51 U.S. cents, while South Africa’s rand added 0.2 percent 9.7788 per dollar.

Malaysia’s ringgit rose the most in a week before Prime Minister Najib Razak delivers his 2014 budget tomorrow. The currency added 0.4 percent to 3.1543 per dollar. One-month non-deliverable forwards on the rupiah surged 1 percent, the most since Oct. 11, to 10,920 per dollar.

Commodities Rebound

The S&P’s GSCI gauge of raw materials rose after sliding as much as 1.5 percent to 623.36 yesterday, the lowest since Aug. 8. China, the biggest consumer of industrial metals and energy, emerged from a two-quarter slowdown in the three months to the end of September, data last week showed.

West Texas Intermediate rose 0.6 percent to $97.47 a barrel, after sinking almost 4 percent over the past three days. The Energy Information Administration said yesterday that crude inventories climbed 5.25 million barrels last week, while analysts surveyed by Bloomberg estimated a gain of 3 million. Stockpiles at Cushing, Oklahoma, increased for a second week and domestic production jumped to the most in 24 years.

Copper for three-month delivery on the London Metal Exchange rose 0.5 percent to $7,207.50 a metric ton after sliding 2.2 percent yesterday, the most since July 5. Silver gained 0.8 percent to $22.7315 an ounce.

 

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