Stocks Drop on profits as China Money Rates Sink Metals – worldleaks
Stocks fell, trimming a third weekly benefit for the MSCI All-Country World Index,
after sales from Renault SA (RNO) to Canon Inc. (7751) trailed estimates.
Metals slid as money-market rates in China rose, while Treasuries climbed.
The MSCI All-Country gauge lost 0.3 percent at 11:23 a.m. in London and the
Stoxx Europe 600 Index slipped 0.1 percent. Standard & Poor’s 500 Index futures dropped
0.1 percent. The yield on 10-year Treasuries slipped one basis point, while Sweden’s krona
strengthened against all of its major peers. New Zealand’s dollar slid as the central-bank governor
signaled he would not produce interest rates. Copper and nickel retreated.
Renault said that weakening currencies in Brazil and Russia outweighed increased prices for its
vehicles in Europe, while Canon cut down its annual benefit forecast. China’s one-month interbank
rate surged the most since June as the central bank refrained from injecting funds by money-market
operations. Reports today pointed that German business confidence accidentally declined this month,
while the U.K.’s economy boomed at a faster pace in the third quarter.
“We still haven’t seen confirmation that profits will speed up into 2014,” said Lars Kreckel,
a London-based global equity strategist at Legal & General Investment Management, which supervises
about $702 billion. “Investors are willing to be a little patient if the base case for earnings
growth gets thrust out into the next quarter, but the real risk is that you jump to worry about
an earnings decline.”
More than three stocks fell for every two that rose on the Stoxx 600. A gauge of carmakers
retreated as Renault dropped 3.6 percent. France’s second-largest carmaker reported third-quarter
revenue that dropped 3.2 percent to 8 billion euros ($11 billion), missing the average analyst
estimate of 8.5 billion euros in a Bloomberg survey.
Volvo AB (VOLVB) slid 6.9 percent after the world’s second-biggest truckmaker reported earnings
before interest and taxes that unexpectedly declined in the three months through September. The
company posted Ebit of 2.4 billion kronor, missing the 3.15 billion-krona average analyst projection.
A report from the Office for National Statistics showed that U.K. gross domestic product elaborated
0.8 percent in the third quarter, its fastest pace in more than three years, as the recovery went forward
in every major industry. That matched the median guess of 40 economists went over by Bloomberg.
Treasury 10-year note yields dropped one basis point, or 0.01 percentage point, to 2.51 percent,
according to Bloomberg Bond Trader prices. The yield has fallen seven basis points this week,
extending its decline from this year’s high of 3.005 percent on Sept. 6.
Italian 10-year bonds fell for a third consecutive day, pushing the yield four basis points higher
to 4.19 percent.
Sweden’s krona strengthened 0.3 percent to 8.742 per euro after a report indicated consumer confidence rose.
New Zealand’s currency weakened 0.7 percent to 82.96 U.S. cents after central bank Governor Graeme
Wheeler said he was “concerned” a stronger currency may dent trade.
New Zealand’s dollar drew back 0.4 percent against the Aussie, extending its slide this week to 1.6
percent. A fifth week of declines would be the longest stretch since May 2012.
“We have a very strong exchange rate,” Reserve Bank of New Zealand Governor Graeme Wheeler said in an
interview with the national radio broadcaster. Increasing interest rates “would put upward pressure on
the exchange rate and damage our traded-goods sector. We’re quite concerned about that risk.”
Copper dropped 0.6 percent to $7,135.50 a metric ton and nickel slid 1.1 percent to $14,490 a ton. China
is the biggest buyer of industrial metals. West Texas Intermediate oil advanced 0.4 percent to $97.53 a barrel,
cutting its biggest weekly retreat since September.
Developing-nation stocks drew back for the third day, with the MSCI Emerging Markets Index losing 0.5 percent,
headed for the steepest weekly decline in two months. The Shanghai Stock Exchange Composite Index and the Hang Seng
(HSCEI) China Enterprises Index of mainland companies listed in Hong Kong each lost more than 1 percent.
For more : http://www.worldleaks.com