Asia Stocks, Copper Drops As Bond Risk Gains on Italy Debt Yield

Youth and workers rebellion continues in Greece. The capitalist economic crisis and police repression is at the root cause of the uprising., a photo by Pan-African News Wire File Photos on Flickr.

Asia Stocks, Copper Drop as Bond Risk Gains on Italy Debt Yield

Shiyin Chen
Bloomberg November 9, 2011 04:00 AM

(Bloomberg) -- Asian stocks tumbled the most in seven weeks, bond risk rose to a one-month high and copper dropped for a fifth day as Europe's debt crisis drove Italian bond yields above 7 percent, Japanese machinery orders fell and Chinese exports grew at a slower-than-forecast pace.

The MSCI Asia Pacific Index sank 3 percent at 3:04 p.m. in Tokyo. Standard & Poor's 500 futures were little changed after the U.S. index slumped 3.7 percent yesterday. The Markit iTraxx Asia Index of debt-default risk headed for the highest close since Oct. 11. The euro reached a one-month low, while South Korea's won sank 1.5 percent. Copper dropped 2.4 percent and rubber fell as much as 7.2 percent.

Italy will seek to sell 5 billion euros ($6.8 billion) of Treasury bills today after yields on 10-year notes surged to 7.25 percent yesterday, more than the 7 percent level at which Greece, Ireland and Portugal sought international bailouts. German Chancellor Angela Merkel's Christian Democratic Union may adopt a motion at a party congress next week to allow euro members to exit the currency area, a senior CDU lawmaker said.

"The market is going to be focused on Italy," Scott Wren, a senior equity strategist at Wells Fargo Advisors LLC, said in a Bloomberg Television interview from St. Louis, Missouri. "A lot of people have made that 7 percent level to be the line in the sand and we're well ahead of that now. Italy has a ton of debt to refinance next year so my best guess is that we're going to see some sort of band-aid solution."

Stocks Slump

About 15 shares declined for every one that advanced on MSCI's Asia Pacific Index, which was set for the largest loss since Sept. 22. Japan's Nikkei 225 Stock Average lost 2.9 percent, South Korea's Kospi Index sank 3.5 percent, Australia's S&P/ASX 200 Index tumbled 2.4 percent, and Hong Kong's Hang Seng Index dropped 4.4 percent.

Fanuc Corp., Japan's biggest maker of industrial robots, retreated 4.1 percent after data today showed the nation's machinery orders fell 8.2 percent in September from August, more than the 7.1 percent decline forecast of economists surveyed by Bloomberg News. Noble Group Ltd., the Hong Kong-based supplier of raw materials, plunged 26 percent in Singapore after Chief Executive Officer Ricardo Leiman quit following the company's first loss in about 14 years.

HSBC Holdings Plc sank 8.1 percent in Hong Kong after Europe's largest bank said investment banking profit fell in the third quarter. Industrial & Commercial Bank of China Ltd. tumbled 7.9 percent in Hong Kong after people with knowledge of the matter said Goldman Sachs Group Inc. raised $1.1 billion selling shares of the world's largest lender by market value.

U.S. Trade

The S&P 500 dropped yesterday by the most since Aug. 18. Just one stock on the index gained yesterday, the least since June 2010. A Commerce Department report today may show the trade gap was $46 billion in September, little changed from $45.6 billion in August, economists surveyed by Bloomberg News said. Treasury 10-year yields gained five basis points, rebounding from a 12 basis point drop.

Jefferson County, Alabama, filed the biggest U.S. municipal bankruptcy after an agreement among elected officials and investors to refinance $3.1 billion in bonds fell apart. The county, home to Birmingham, the state's most-populous city, listed assets and debt of more than $1 billion in Chapter 9 papers filed today in U.S. Bankruptcy Court in Birmingham.

Customs bureau data showed China's export growth slowed to 15.9 percent in October from 17.1 percent the previous month. The median forecast in a Bloomberg News survey of 25 economists was for an increase of 16.1 percent. Imports jumped a more-than- forecast 28.7 percent, leaving a trade surplus of $17 billion.

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