Asia Stocks, Euro Drop, Commodities Rebound on Japan, Europe

Bloomberg:

May 20 (Bloomberg) -- Asia stocks dropped to near a six- month low after slower-than-estimated growth in Japan caused shares in Tokyo to slide for the second day. The euro fell after climbing yesterday and commodities rallied from three-month lows.

The MSCI Asia Pacific Index lost 0.7 percent to 113.96 at 12:43 p.m. in Tokyo and the Nikkei 225 Stock Average shed 0.8 percent to 10,101.08. Standard & Poor’s Index futures gained 0.2 percent after the U.S. benchmark fell 0.5 percent yesterday. The euro lost 0.4 percent versus the dollar. Copper rose 2.8 percent.

While Japan’s economy grew at the fastest pace in three quarters, the 4.9 percent expansion was less the 5.5 percent median forecast of 21 economists in a Bloomberg survey. Finance Minister Naoto Kan warned the economy was in a deflationary state. Investors are jittery after Germany’s decision to ban naked short-selling on sovereign debt and some financial stocks.

“Doubts over Europe’s ability to keep its own house in order remain, along with concerns about the robustness of global growth,” said Tim Schroeders, who helps manage about $1.1 billion at Pengana Capital Ltd. in Melbourne. “It’s difficult for investors to swim against the tide.”

More shares dropped than gained on the MSCI Asia Pacific Index, which headed for its lowest close since Nov. 27. Today’s Japan growth report showed more than half of the expansion came from trade. Consumer spending grew 0.3 percent in the first quarter, slowing from the previous period’s 0.7 percent gain.

Posted via email from Jim Nichols