Thursday, 28 May, 2015

Europe Stocks Fall as China Shares Drop, Yen Touches 12-Year Low

(Bloomberg) — European stocks fell with U.S. equity-index futures while German bonds advanced. Chinese shares slid the most in four months as brokerages tightened margin lending, and the yen touched a 12-year low versus the dollar. The Stoxx Europe 600 Index declined 0.4 percent at 10:31 a.m. in London and Standard & Poor’s 500 Index futures slipped 0.2 percent. The Shanghai Composite Index tumbled 6.5 percent. The yield on 10-year German bunds dropped two basis points to 0.54 percent. The yen touched 124.30 per U.S. dollar, the weakest level since December 2002. The pound weakened against the euro after first-quarter growth fell short of analyst predictions for an upward revision. French and German delegates at a meeting of Group of Seven finance chiefs in Dresden pushed back against Greek claims that an agreement over bailout funds is near, as the deadline approaches for International Monetary Fund payments next month. Some Chinese brokerages increased their margin requirements after a seven-day rally that drove the Shanghai gauge up 15 percent. “We can expect sentiment to swing back and forth until we really get to crunch time on Greece, and I don’t think we’ll get a deal until the very last day,” Allan von Mehren, chief analyst at Danske Bank A/S, said by phone from Copenhagen. “Markets will be quite volatile as everyone tries to read the signals.” Commodity producers fell the most among Stoxx 600 industry groups. Tate & Lyle Plc slid 3.5 percent after forecasting pretax profit next year will be similar to this year’s. Sports Direct Sports Direct International Plc gained 4.9 percent after announcing pretax earnings ahead of expectations. Kingfisher Plc rose 3.3 percent as retail profit was in line with estimates. Seadrill Ltd. gained 4.8 percent after reporting quarterly net income that beat projections. S&P 500 E-mini futures expiring in June fell, indicating the index will slip for a third time in four days. Gains in technology shares on Wednesday sent the Nasdaq Composite Index to a record. The Nikkei-225 Stock Average climbed 0.4 percent, posting its longest rising streak since 1988. The MSCI Emerging Markets Index lost 0.6 percent, poised for the lowest close since April 7. The Hang Seng China Enterprises Index retreated 3.5 percent. Russia’s ruble slid 0.4 percent, extending its three-day decline to 4.2 percent. Changjiang Securities Co. joined larger rivals GF Securities Co. and Haitong Securities Co. in increasing its margin requirement, the collateral put up by an investor when borrowing as brokerages tightened lending restrictions. Record growth in margin debt helped fuel a 125 percent gain in the Shanghai index over the past year. PBOC Cash The central bank drained tens of billions of yuan from the financial system by selling repurchase agreements to targeted financial institutions, The People’s Bank of China drained cash from the financial system, two people familiar with the matter also said. The PBOC didn’t respond to a request for comment. Qatar’s benchmark index fell 2.5 percent, extending its two-day retreat to 4 percent. Swiss officials said yesterday they’re investigating alleged money laundering related to the selection of the host countries for the next two World Cups, in Russia and the Gulf nation. The Australian dollar weakened against all of its 16 major counterparts, sliding 0.7 percent to 76.74 U.S. cents, reaching a six-week low. The government said capital investments fell last quarter by twice as much as economists had estimated. Austrian bonds rose with their German peers, sending the 10-year yield two basis points lower to 0.67 percent. Crude Inventories Spain’s 10-year bond yield rose two basis points to 1.83 percent and Portugal’s increased the same amount to 2.50 percent. West Texas Intermediate crude added 0.4 percent after sinking 5.3 percent the past three trading days. U.S. inventories are forecast to fall by 2 million barrels, declining a fourth week, according to the median estimate before Energy Department data released Thursday. Brent oil rose 1.1 percent. Aluminum for three-month delivery on the London Metal Exchange rose 1 percent, paring the biggest monthly drop in more than two years as stockpiles fell to a six-year low. Nickel gained for a second day, while copper rose the first time in four days. Archr LLP is Authorised and regulated by the Financial Conduct Authority (FCA reference 617163). Archr LLP is not covered by the Financial Services Compensation Scheme (FSCS). Archr is registered in England and Wales No. OC371018. 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