Security personnel for Chase Bank outside their headquarters in downtown Milwaukee, Wisconsin. The Bail Out the People Movement held a demonstration there demanding a moratorium on foreclosures. (Photo: Abayomi Azikiwe), a photo by Pan-African News Wire File Photos on Flickr.
Asian Stocks Fall Third Day as JPMorgan Loses $2 Billion
By Jonathan Burgos and Adam Haigh - May 10, 2012
Asian stocks dropped for a third day after JPMorgan Chase & Co. said it had a $2 billion trading loss as positions in credit securities proved riskier than expected, overshadowing signs U.S. employment is improving.
National Australia Bank Ltd. (NAB), the nation’s fourth-largest lender, slipped 1 percent in Sydney. Yamada Denki Co. sank 5.6 percent in Tokyo after the electronics retailer forecast lower first-half profit. Genting Singapore Plc slipped 4.2 percent after the theme park and casino operator reported a 33 percent decline in first-quarter net income. Nissan Motor Co., the carmaker that gets about one-third of sales from North America, climbed 2.4 percent.
“Clearly JPMorgan got it wrong,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has almost $100 billion under management. “I suspect it’s probably a one off, but it comes during a week where we’ve seen risk off in a big way.”
The MSCI Asia Pacific Index fell 0.6 percent to 118.99 as of 10:54 a.m. in Tokyo, with about three shares falling for each that rose. The measure is heading for its biggest weekly loss in almost six months as France’s political changes and instability in Greece threaten to derail austerity plans and worsen Europe’s debt crisis.
Australia’s S&P/ASX 200 Index slid 0.5 percent. South Korea’s Kospi Index (KOSPI) fell 1 percent and Taiwan’s Taiex Index declined 1.2 percent. Japan’s Nikkei 225 Stock Average swung between gains and losses.
Jobless Claims
China’s Shanghai Composite Index (SHCOMP) fell 0.4 percent. The nation’s consumer prices rose 3.4 percent in April, in line with economists’ estimates, the National Bureau of Statistics said today. Hong Kong’s Hang Seng Index decreased 1 percent.
Futures on the Standard & Poor’s 500 Index fell 0.7 percent today as investors assessed the disclosure by JPMorgan of a $2 billion trading loss on synthetic credit securities after an “egregious” failure in its chief investment office, which the bank says focuses on hedging. The index rose 0.3 percent yesterday, paring this week’s losses to 0.8 percent.
Exporters advanced after a report showed U.S. claims for unemployment benefits declined last week to the lowest level in a month, easing concern that the American labor market is faltering.
The MSCI Asia Pacific Index (MXAP) rose 5.1 percent this year through yesterday, compared with an 8 percent gain by the S&P 500 and a 2.7 percent advance by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 12.2 times estimated earnings on average, compared with a multiple of 12.9 for the S&P 500 and 10.4 times for the Stoxx 600.
To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Adam Haigh in Sydney at ahaigh1@bloomberg.net
To contact the editor responsible for this story: John McCluskey at j.mccluskey@bloomberg.net
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