Tuesday, 09 June, 2015

Stocks Drop on Concern Chinese Growth Is Slowing; Oil Advances

(Bloomberg) — European stocks dropped for a sixth day, with miners among the biggest losers, and Asian equities retreated on signs of slowing Chinese growth. Oil gained on forecasts for less U.S. shale production. The Stoxx Europe 600 Index declined 0.7 percent at 7:17 a.m. in New York, extending its longest losing streak of the year. The MSCI Asia Pacific Index dropped 0.8 percent, led by slides in technology shares, and Standard & Poor’s 500 Index futures fell 0.2 percent. Greek stocks increased with Spanish and Italian bonds. The Bloomberg Dollar Spot Index was little changed as crude rose 2.2 percent in New York. China’s consumer prices rose at a slower pace in May and factory-gate prices extended a record stretch of declines, underscoring tepid demand in the world’s biggest consumer of everything from energy to copper. Group of Seven leaders meet in Germany, with Chancellor Angela Merkel demanding urgent action from Greece to cement its euro-area membership as the Greek delegation in Brussels submitted a three-page proposal to its creditors in a bid to unlock bailout funds. “There were some bad figures on inflation from China,” said John Plassard, vice president at Mirabaud Securities LLP in Geneva. “The market in Europe is now getting oversold. We may come into a phase where we get a bit of a relief in this stressed market.” Stocks Fall The Stoxx 600 is extending its lowest level since February. Germany’s DAX Index dropped 1.1 percent after entering a correction on Monday and is down 12 percent from its April peak. Greece’s ASE Index climbed 1.9 percent. S&P 500 E-mini futures expiring this month fell after the index dropped 0.7 percent on Monday, closing at a two-month low. In the commodities market, West Texas Intermediate crude for July delivery gained $1.28 to $59.42 a barrel. Brent climbed 2.5 percent to $64.27 a barrel. Output from prolific U.S. tight-rock formations will decline through July to the lowest level since January, the Energy Information Administration reported on Monday. Crude inventories probably fell by 1.45 million barrels through the week ended June 5, according to a Bloomberg survey before an EIA report Wednesday. Nickel advanced for a third day to a three-week high, climbing 1 percent to $13,575 a ton on the London Metal Exchange after China inflation data. Zinc, copper and aluminum also rose. Greece Talks The dollar fell to $1.1272 per euro and 124.07 yen. Spanish government bonds rose with their Italian peers amid tentative signs of progress in negotiations over Greece’s bailout funding. The yield on Spain’s 10-year bonds dropped 2.1 basis points to 2.22 percent, after rising 15 basis points over the previous two days. Italy’s 10-year yield declined 2.2 basis points to 2.23 percent. That left the extra yield that investors get for holding the securities instead of German debt with a similar due date at 135 basis points, down from as much as 146 basis points a week ago. Germany’s 10-year yield was little changed at 0.88 percent and the rate on similar-maturity Treasury notes slipped 1.1 basis points to 2.37 percent. The cost of insuring European corporate debt was little changed, with the Markit iTraxx Europe Index of credit-default swaps holding at an almost eight-month high of 69 basis points, according to data compiled by Bloomberg. Average yields on investment-grade bonds in euros surged to 1.31 percent, the highest in almost 10 months, Bank of America Merrill Lynch index data show. Chinese equities fell before MSCI Inc. decides whether to add mainland securities to its global indexes. The Shanghai Composite Index slipped 0.4 percent, dropping from a seven-year high. Hong Kong’s Hang Seng China Enterprises Index dropped 1.8 percent. The MSCI Emerging Markets Index slid 0.6 percent, its 12th day of losses and longest slump since 1990. The Philippines benchmark led declines, retreating more than 2 percent, and Taiwan’s index lost 1.9 percent. 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. Registered office Chancery House, 30 St Johns Road, Woking, Surrey, GU21 7SA This message may contain confidential or privileged information. If you are not the intended recipient, please advise us immediately and delete this message. The unauthorised use, disclosure, distribution and/or copying of this e-mail or any information it contains is prohibited. This information is not, and should not be construed as, a recommendation, solicitation or offer to buy or sell any securities or related financial products. This information does not constitute investment advice, does not constitute a personal recommendation and has been prepared without regard to the individual financial circumstances, needs or objectives of persons who receive it. You are receiving this email because you are a valued client of Archr.