2010-03-11 08:36:47.153 GMT
March 11 (Bloomberg) -- The following are the day's top stories on stocks:
European Stocks, U.S. Index Futures Drop; BHP Billiton, Lagardere Slide
European stocks declined from a seven-week high, led by basic-resource producers as growing Chinese inflation increased speculation the government will pare back stimulus measures.
U.S. futures fell and Asian shares rose. BHP Billiton Ltd., the world's largest mining company, dropped 1.3 percent in London as China's inflation reached a 16- month high. Lagardere SCA slumped the most in 10 months after France's biggest publisher reported earnings that missed analysts' estimates. The Stoxx Europe 600 Index slipped 0.2 percent to 257.77 at 8:27 a.m. in London. The gauge has soared 8.6 percent since Feb. 5 on speculation the European Union will support Greece if needed as it struggles to reduce the region's biggest budget deficit.
Mohamed A. El-Erian, whose company runs the world's biggest mutual fund, said deteriorating public finances may affect the global economy more than is currently realized. ``The importance of the shock to public finances in advanced economies is not yet sufficiently appreciated and understood,''
El-Erian, co-chief investment officer at Pacific Investment Management Co., wrote in an article on the Financial Times Web site. The potential damage from increased government borrowings is ``at present being viewed primarily -- and excessively -- through the narrow prism of Greece.''
Asian Stocks Rise on Outlook for Japanese Economy; BHP Billiton Declines
Asian stocks rose, sending the MSCI Asia Pacific Index toward a seven-week high, as speculation Japan's economy is recovering outweighed concern China will pare back measures that spurred growth. Mizuho Financial Group Inc., Japan's third-largest bank by market value, and Aeon Co., the country's No. 1 supermarket operator, climbed more than 1 percent in Tokyo after the Nikkei newspaper said the government will boost its economic outlook. BHP Billiton Ltd., the world's biggest mining company, lost 0.5 percent in Sydney, and Jiangxi Copper Co. dropped 1.1 percent after China said inflation in February reached a 16-month high. ``The economy is undoubtedly in the midst of mild recovery'' in Japan, said Mitsushige Akino, who oversees the equivalent of $450 million at Tokyo-based Ichiyoshi Investment Management Co. The MSCI Asia Pacific Index rose 0.3 percent to 122.94 as of 5:05 p.m. in Tokyo, with five stocks advancing for every four that dropped. The index, on course for its highest closing level since Jan. 21, fell after China reported its inflation figures, and then rebounded.
China Stock-Futures Market to Dwarf Cash Trade, History Says: Chart of Day
South Korea and Taiwan's sevenfold increases in stock-futures trading after they were introduced show the potential for China's market, expected to begin trading next month, according to China International Capital Corp. The CHART OF THE DAY shows that within a decade, stock- index trading volumes for South Korea's Kospi 200 index had grown to 757 percent more than that of the cash market by November 2009. The Taiwan Stock Exchange's futures trade was seven times larger than that of the cash market by the end of last year, data compiled by CICC show. ``The potential for Chinese stocks is substantial,'' Hao Hong, a Beijing-based equity strategist for CICC, said in a report. ``Judging from the international experiences in Taiwan and Korea, the futures markets may grow several times over the physical market.'' The first stock-index contracts, based on China's CSI 300 Index, may begin trading in mid or late April, Shang Fulin, chairman of the China Securities Regulatory Commission, said this month. The regulator said index traders will have to keep at least 500,000 yuan ($73,239) in their brokerage accounts.
Peru Left Behind as Latin America Stocks Rise to Records: Chart of the Day
Peru will be the only stock market in Latin America that fails to rise to a record this year because it has the closest relationship to metals prices that remain below all-time highs, according to Banco BTG Pactual SA. The CHART OF THE DAY shows the correlation between the Lima General Index and the Bloomberg Base Metals 3-Month Price Commodity Index climbed to
0.83 yesterday, based on percentage changes in the past 30 days. That's the second-most ever and the strongest relationship between commodities and stocks in the region, data compiled by Bloomberg show. A reading of 1 means two assets move in tandem, while zero means no relationship. Peru is the world's second-biggest producer of copper and zinc, according to Sociedad Nacional de Mineria Petroleo y Energia, and the only Latin American stock market besides Brazil that hasn't climbed to a record in 2010. The Bovespa needs to rally 5.1 percent to surpass its prior peak, less than 66 percent for Peru's measure and 32 percent for the metals gauge. ``I don't think Peru will reach record highs this year,'' said Alonso Aramburu, an equity analyst with Pactual in New York.
``Commodity prices are still well below 2007 levels.''
Baltic Trading IPO Raises $228 Million at Low End of Forecast Price Range
Baltic Trading Ltd., the New York- based shipping company formed to operate dry-bulk cargo vessels, raised $228 million in its initial public offering after selling shares at the low end of its price range. Baltic Trading, established in October by Genco Shipping & Trading Ltd. of New York, sold 16.3 million shares for $14 each yesterday, according to a filing with the Securities and Exchange Commission and Bloomberg data. The company, which asked for as much as $16, will use the proceeds to buy six ships that will transport iron ore, coal, grain and steel products. The IPO is the first of three U.S. offerings this week and comes after seven companies postponed or delayed initial sales this year. While buyers have extracted concessions in almost every deal, Baltic Trading became the second company in 2010 to price shares within its forecast range as the Standard & Poor's 500 Index rebounded from a three-month low. ``With markets being much stronger across the board, that's good momentum building for the IPO market,'' said Josef Schuster, the Chicago-based founder of IPOX Capital Management LLC and manager of the Direxion Long/Short Global IPO Fund, which started this month. ``If these companies don't price reasonably well in the market, that would absolutely be disappointing.''
Tech Stocks Pushed by Analysts a Decade After Bubble Burst: Chart of Day
Ten years after bullish analyst recommendations helped push the Nasdaq Composite Index to a record, technology stocks are the highest-rated industry group. The CHART OF THE DAY's bottom panel shows the Nasdaq peak of 5,048.62 on March 10, 2000, and its 78 percent plunge over the next two and a half years. The top panel shows analysts giving technology companies the highest average rating among nine industries, according to data compiled by Bloomberg. Stock pickers project a 14 percent gain for the group during the next 12 months, the data show. ``As value investors, 10 years ago we were finding virtually nothing in technology,'' Mark Donovan, co-chief executive officer of Robeco Investment Management, a unit of Robeco Group, which oversees about $194 billion, said in a Bloomberg Television interview from Amsterdam. ``Today there are a lot of high-quality global players in the tech area that are trading at very sensible multiples. There are hidden values that are plentiful in the group.'' Cisco Systems Inc., the world's biggest network-equipment maker, had a price-to-earnings ratio of 160 a decade ago. Now the company is trading at 23 times reported profits. IPod maker Apple Inc.'s PE ratio has dropped to 22 from 45, while the ratio for Microsoft Corp., the biggest software company, has declined to 15 from 63, according to Bloomberg data.
Swiss Market Index Falls; Zurich Financial, UBS, ABB Lead Declining Shares
Switzerland's benchmark stock index, the Swiss Market Index, fell 0.18 percent at 9:05 a.m. The index of 20 stocks traded on the Electronic Bourse System fell 12.39 to 6,861.20.
Among the stocks in the index, 6 rose, 12 fell and 2 were unchanged. Declines in the Swiss Market Index were led by Ubs, Abb and Zurich Fin. Services. About 1.70 million shares traded in the Swiss Market Index. --Editor: David Merritt.
Japan's Stocks Rise on Outlook for Economy, Iron-Ore Demand; Mitsui Climbs
Japanese stocks rose, sending the Nikkei 225 Stock Average to its highest close since Jan. 21, on speculation increased demand will boost earnings at iron-ore producers and that the nation's economy is recovering. Mitsui & Co., which owns a 15 percent stake in Vale SA's major shareholder, climbed 2.7 percent after the Nikkei newspaper reported Brazil-based Vale is seeking to increase iron-ore prices. Mitsui O.S.K. Lines Ltd., Japan's largest operator of iron-ore ships, rose 1.3 percent. Electric device retailer Yamada Denki Co. climbed 4 percent after the Nikkei said the government may lift its outlook on the nation's economy. ``The economy is undoubtedly in the midst of mild recovery,'' said Mitsushige Akino, who oversees the equivalent of $450 million at Tokyo-based Ichiyoshi Investment Management Co. ``Iron-ore producers don't think of raising prices unless demand is very strong. That could be further evidence that the global economy is improving.'' The Nikkei 225 climbed 1 percent to 10,664.95 in Tokyo, the highest close since Jan. 21. The broader Topix index rose 0.9 percent to 930.38, with almost five times as many shares advancing as falling. The gauges briefly pared gains after a Chinese government report on rising consumer prices spurred concern the country will raise interest rates to curb inflation.
Most China Stocks Drop as CPI Climbs to 16-Month High; Automakers Decline
Most Chinese stocks fell, led by automakers and developers, after inflation accelerated and new loans exceeded forecasts, boosting the prospect for higher interest rates. SAIC Motor Corp., the country's largest carmaker, lost 2.9 percent and Gemdale Corp. dropped 1.2 percent. Consumer prices climbed in February to a 16-month high and lenders extended 700.1 billion yuan ($103 billion), government reports showed today. Shanghai Pudong Development Bank Co. rose 2.7 percent after selling shares to China Mobile Ltd. ``The market's reading of the economic data points to overheating and a lot of investors believe an interest-rate increase will come soon,'' said Yan Ji, who helps oversee about $1.2 billion at HSBC Jintrust Fund Management Co. in Shanghai. More than two stocks fell for each one that rose on the Shanghai Composite Index, which gained 2.36, or 0.1 percent, to 3,051.28 at the close. The gauge has lost 6.9 percent this year on concern measures to curb property price gains and rein in lending growth will slow the economy.
The CSI 300 Index slipped 0.1 percent to 3,276.71.
Buy Asian Equities to Gain Before `Lights Turn Green,' Goldman Sachs Says
Investors should buy Asian stocks outside Japan after valuations dropped and before sentiment strengthens further, Goldman Sachs Group Inc. said. ``By the time all the lights turn green, the race will already be well under way,'' Goldman Sachs analysts led by Timothy Moe wrote today. ``Sentiment and valuation will improve as the year progresses, and we would prefer to be early.'' The MSCI Asia-Pacific excluding Japan Index remains 0.5 percent lower this year, having rebounded from year-to-date losses of as much as 9.7 percent. Stocks slid earlier this year on concern that China will tighten lending to combat faster inflation and that Greece's debt crisis will spread. Analysts' earnings growth estimates for this year have climbed to 26 percent on average, near Goldman Sachs's 30 percent forecast, according to the report. The most profitable securities firm in Wall Street history is predicting a 21 percent increase in Asian corporate earnings in 2011.
For the complete stories summarized here, and for more of the day's top news, see TOP
-0- Mar/11/2010 8:36 GMT
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