On Thursday European stocks dropped for the first time in three days, as commodities extended yesterday’s rout and insurance companies fell. US index futures and Asian shares also retreated.
BHP Billiton Ltd. and Rio Tinto Group lost more than 3% after copper slumped to a five-month low and crude fell below $98 a barrel. Insurers declined as companies from Allianz SE to Aegon NA reported earnings. Thales SA dropped 4.1% on a report that the company may make a cash contribution as part of an asset swap with Safran SA.
Copper tumbled to a five-month low as speculation mounted that China may continue monetary tightening after inflation spread beyond food, damping the demand outlook in the world’s largest consumer of the metal. Aluminum and zinc also retreated.
Crude oil extended yesterday’s 5.5% selloff, falling 2.3% to $95.96 a barrel in New York today. The contract dropped yesterday after the U.S. Energy Department reported a surge in stockpiles last week. Energy companies to fall included Total and BP down 1.7% and 1.2% respectively. Repsol fell 0.8%, though its results beat forecasts.
Easyjet and International Airlines Group were up 1.9% and 1.5% respectively, the latter helped by expectations of the end of a staff dispute at British Airways.
Asian stocks fell, with the key regional index set for its biggest slide since markets crashed in the wake of Japan’s record earthquake in March, as commodity prices tumbled amid concern that China will further tighten monetary policy. Japanese stocks fell for the first time in three days amid concern that global inflation may curb economic growth. The Nikkei 225 Stock Average fell 1.5% while the broader Topix slid 1%.
US stock-index futures declined as Cisco Systems Inc.’s earnings forecast missed analysts’ estimates and commodities tumbled for a second day after China raised banks’ reserve requirements.
This article was compiled by Valletta Fund Management Limited, a member of the BOV Group. Valletta Fund Management,
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