June 15 (Bloomberg) -- Asia’s commodity stocks and copper prices fell on concern Europe’s debt crisis may worsen as Greece’s credit rating was lowered by Moody’s Investors Service to junk. The euro weakened.
A measure tracking material stocks on the MSCI Asia Pacific Index lost 0.2 percent as of 12:55 p.m. in Tokyo, the first drop in four days, while copper declined for the first time in six. The euro weakened for the first time in four days against the yen. Standard & Poor’s 500 Index futures were little changed.
Greece’s credit rating was cut to non-investment grade as it struggles to rein in its budget deficit. Stocks fell after gains in the past week added $1.8 trillion in global market value on signs of faster economic growth and the decline in copper also snapped the longest rally in more than five months.
“Markets are losing some momentum because of the downgrade in Greece’s credit rating,” said Allan Yu, who helps manage abut $3.5 billion at Manila-based Metropolitan Bank & Trust Co. “The correction shouldn’t be significant because this downgrade is something investors have anticipated. Markets have also rallied recently that it’s attractive to take profit.”
The MSCI Asia Pacific Index was little changed at 114.25. A total of 461 stocks rose while 426 fell.
Japan, Australia
Japan’s Nikkei 225 Stock Average declined 0.1 percent and Australia’s S&P/ASX 200 Index gained 0.1 percent. China’s domestic markets are closed for a holiday.
Konica Minolta Holdings Inc., which counts Europe as its biggest market, lost 1.2 percent. Sumitomo Metal Industries Ltd. sank 1.4 percent and Nippon Steel Corp. dropped 0.6 percent after their share price estimates were cut by Mitsubishi UFJ Financial Group Inc.
Posco, South Korea’s largest steelmaker, retreated 1.1 percent after the Korea Economic Daily said it may this week tentatively agree to a 25 percent to 30 percent price increase for the iron ore it will buy in the third quarter. Posco spokesman Choi Doo Jin declined to comment on the report.
BHP Billiton Ltd., the world’s largest mining company, lost 0.5 percent in Sydney trading, and Rio Tinto Group, the third biggest, fell 0.2 percent.
Three-month copper on the London Metal Exchange fell as much as 1 percent to $6,594.75 a metric ton, before trading at $6,619.75. The metal yesterday capped its longest gain since the six-day climb ended Jan. 4, on optimism that China’s demand will rise. September-delivery copper in New York dropped as much as 1 percent to $2.9830 a pound.
Euro Weakens
The euro declined to as low as 111.62 yen in Tokyo from 111.92 yen in New York yesterday, when it reached 112.87 yen, the highest level since June 4. The euro dropped to as low as $1.2211 from $1.2221 yesterday, when it advanced to $1.2299, the strongest since June 3. Europe’s single currency also weakened against 10 of 16 major counterparts before a German report forecast to show investor confidence fell to the lowest level in almost a year.
Malaysia’s ringgit weakened 0.6 percent to 3.2665 per dollar.
“Uncertainty still exists,” said Moon Hee Lee, a Seoul- based currency trader at Royal Bank of Scotland Group Plc. “Clients are cutting their positions.”
In making the four-step downgrade to Ba1 from A3, Moody’s cited “substantial” risks to economic growth from the austerity measures tied to a 110 billion-euro ($134.5 billion) aid package from the European Union and the International Monetary Fund. The lower rating “incorporates a greater, albeit, low risk of default,” Moody’s said in a statement yesterday in London.
--With assistance from Ron Harui and Glenys Sim in Singapore, Saeromi Shin, Sungwoo Park and Frances Yoon in Seoul.
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