Asian stocks fell for a second day as Japan struggled to contain a meltdown at a nuclear power plant. Japanese government bonds advanced and crude oil declined on concern growth will cool in the world’s third-largest economy.
The MSCI Asia Pacific Index was 0.2 percent lower at 133.34 as of 1:14 p.m. in Tokyo, having earlier retreated as much as 0.9 percent. The Nikkei 225 (NKY) Stock Average fell 0.4 percent. The yield on Japan’s benchmark 10-year debt dropped from a one-week high. The S&P GSCI Index of 24 raw materials slid for a third day as oil slid to a one-week low in New York. Standard & Poor’s 500 Index futures added 0.2 percent.
Stocks are retreating after Goldman Sachs Group Inc. cut its forecast for economic growth in Japan, where radiation levels that can prove fatal were detected outside the Fukushima Dai-Ichi plant’s reactor buildings. In the U.S., data is forecast to show consumer confidence fell this month for the first time since September. President Barack Obama defended his decision to commit U.S. forces in Libya as rebels advanced on leader Muammar Qaddafi’s hometown of Sirte.
“The situation at the nuclear plant isn’t getting better,” said Yoshinori Nagano, a senior strategist in Tokyo at Daiwa Asset Management Co., which oversees about $104 billion. “We still don’t know how much of a negative effect it’ll have on the economy. The uncertainty is very negative for stocks.”
Losses on MSCI’s Asian index were capped as companies including Brilliance China Automotive Holdings Ltd. (1114) and Anhui Conch Cement Co. reported profits that topped analyst estimates. Brilliance China, the Chinese partner of Bayerische Motoren Werke AG, jumped 7.8 percent in Hong Kong trading, while Anhui Conch, China’s biggest cement maker, rallied 5.6 percent.
Japan’s Economy
Mizuho Financial Group Inc. (8411), Japan’s third-largest bank by market value, sank 2.8 percent. Goldman Sachs said today the country’s economy will shrink next quarter and lowered its growth forecast for the fiscal year starting April 1 to 0.7 percent from 1.3 percent.
Japanese data released today showed unemployment fell and retail sales rose in February, before the nation’s biggest earthquake on record and an ensuing tsunami left 28,000 people dead or missing, flattened homes and crippled the nuclear plant. The ruling party may scrap a proposed corporate-tax cut and boost levies on individuals to pay for earthquake reconstruction and reduce the need to step up bond sales, officials said.
The yield on Japan’s benchmark 10-year bond declined 1.5 basis points to 1.23 percent at Japan Bond Trading Co. A basis point is 0.01 percentage point.
Government Spending
“It remains to be seen how the nuclear issue will affect stocks, and the extent of the earthquake damage is still unknown,” said Keiko Onogi, a Tokyo-based fixed-income strategist at Daiwa Securities Capital Markets Co. “We hear talk about how much the government may need to spend, but nothing has been finalized.”
The yen weakened against most of the 16 most actively traded currencies, slipping 0.1 percent to 115.15 per euro. It traded at 81.75 against the dollar, after yesterday touching 81.85, the weakest level since March 18.
Treasury five-year notes snapped an eight-day decline before the release of the Conference Board’s consumer confidence index, which is forecast to fall to 65 from 70.4 in February, according to the median estimate in a Bloomberg survey of economists. A separate survey showed the S&P/Case-Shiller index of property values in 20 U.S. cities probably fell 3.2 percent in January from a year earlier.
U.S. index futures fluctuated after the S&P 500 fell 0.3 percent yesterday, snapping a three-day gain. Halliburton Co. (HAL) dropped 2.1 percent in late trading after the world’s second- largest oilfield-services provider said disruptions in the Middle East and North Africa will “severely” affect first- quarter results, reducing earnings to a range of 3 cents to 4 cents a share.
Libya Offensive
Oil for May delivery slipped 0.6 percent to $103.41 a barrel on the New York Mercantile Exchange, extending a three- day, 1.7 percent slump. Brent crude oil declined 0.4 percent to $114.31 a barrel on the London-based ICE Futures Europe exchange.
The advance by Libyan rebels on Sirte extends their offensive along the coast, where over the weekend they recaptured the oil ports of Brega and Ras Lanuf, helped by the U.S.-led aerial bombardment of government positions. Obama said the decision to take military action was necessary to avert “a massacre that would have reverberated across the region and stained the conscience of the world.”
The S&P GSCI index declined 0.4 percent. Immediate-delivery platinum declined 0.3 percent to $1,739.35 an ounce and gold slid 0.1 percent to $1,418.50 an ounce, after earlier dropping to $1.417. Silver lost 0.5 percent to $36.9450 an ounce.
To contact the reporters on this story: Shiyin Chen in Singapore at schen37@bloomberg.net; Anna Kitanaka in Tokyo at akitanaka@bloomberg.net
To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net
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