As Greece deadline set, euro weaker
NEW YORK, July 8 — The euro held losses and US equity futures declined after European leaders signaled they’ll force Greece out of the currency union if a Sunday deadline isn’t met.
Chinese index futures slid as the nation’s stock selloff spread beyond Shanghai, while crude oil and copper rallied.
The euro was little changed at US$1.1014 (RM4.21) by 8:45am in Tokyo, and held near a 1 ½-month low versus the yen.
Standard & Poor’s 500 Index futures lost 0.2 per cent after the gauge rallied last session. Futures on the Hang Seng China Enterprises Index sank 3.9 per cent in most recent trading, after the measure of mainland stocks listed in Hong Kong entered a bear market.
US oil rebounded from a three-month low, while copper futures signaled gains after sliding to a six-year low. Australian bonds advanced after iron ore tumbled.
Greece has five days to submit a new set of reform proposals needed to earn more bailout aid and bring its economy back from the brink. European Commission President Jean-Claude Juncker said a scenario for Greece exiting the euro has been prepared.
Chinese stocks in the US sank the most since 2011, with Alibaba Group Holding Ltd touching a record low amid concern over the effectiveness of government measures to stem the rout. Federal Reserve meeting minutes are due today.
“The pricing in of the Greek debt problem is continuing, but we still have a lot of uncertainty,” Hiroichi Nishi, a manager at SMBC Nikko Securities Inc in Tokyo said by phone.
“Continuing declines in Chinese stocks, or fears that the Chinese economy will keep slowing down, will weigh on the market.”
China rout
The euro weakened 0.1 per cent in a third day of losses, to 134.86 yen.
The Bloomberg Dollar Spot Index, a gauge of the greenback versus 10 major peers, was little changed after climbing 0.4 per cent yesterday to a five-week high as the rout in commodities and ongoing discussions over Greece bolstered demand for US assets. New Zealand’s dollar snapped an eight-day slump.
Singapore-traded futures on the FTSE China A50 Index lost 1 per cent in recent trading, while contracts on China’s CSI 300 Index slumped 3.6 per cent.
Futures on Hong Kong’s broader Hang Seng Index were also down, losing 3.1 per cent. The Bloomberg China-US Equity Index of Chinese stocks traded in New York slid as much as 9.1 per cent, the most intraday in at least four years, while Alibaba, China’s biggest e-commerce company, lost 0.8 per cent.
The MSCI Emerging Markets Index dropped to its lowest level this year on Tuesday as the Hong Kong Enterprises gauge slid 3.3 per cent. The index is down 20 per cent from its May peak, meeting the common definition of a bear market. The Shanghai Composite Index lost 1.3 per cent Tuesday amid a record drop in margin bets.
Stock suspensions
Sales of mainland shares through the Shanghai-Hong Kong exchange link swelled to an all-time high on Monday, while dual- listed shares in Hong Kong fell by the most since at least 2006 versus their mainland counterparts.
Almost 200 stocks were halted from trading after the close on Monday, bringing the total number of suspensions to 745, or 26 per cent of listed firms on mainland Chinese exchanges, according to data compiled by Bloomberg.
Industrial metals extended a selloff yesterday, with nickel sliding the most since 2010. China’s equity rout and the uncertainty over Greece is fueling concern that demand for raw materials will wane. China is the world’s biggest consumer of base metals. Copper futures rose 0.5 per cent to US$2.4580 a pound in early trading today.
Iron ore, Australia’s biggest export, tumbled 5.1 per cent yesterday to US$49.60 a dry metric ton at China’s Qingdao port. The ingredient used in steel-making has slumped 21 per cent amid nine straight days of declines.
Bonds, oil
Australian S&P/ASX 200 Index futures were down 0.3 per cent in most recent trading in Sydney. Yields on the country’s 10- year bonds lost seven basis points, or 0.07 per centage point, to 2.83 per cent.
West Texas Intermediate crude oil added 0.7 per cent to US$52.68 a barrel with the US to report on stockpiles Wednesday. WTI fell 0.4 per cent last session to the lowest settlement since April 13 amid the concern over Greece and China. Talks over Iran’s disputed nuclear program have also been extended.
Futures on Japan’s Nikkei 225 Stock Average were bid for 20,360 in the Osaka pre-market, from 20,420 Tuesday, while yen- denominated contracts were down 0.5 per cent to 20,335 in Chicago.
The country updates its current-account and trade balances today.
Futures on the Kospi index in Seoul were little changed in recent trade. — Bloomberg
