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April 16 (Bloomberg) -- Asian stocks fell, headed for the biggest two-day loss in five months, and oil dropped on signs growth is losing momentum in the U.S. and China. Gold rebounded following the steepest slide in three decades.
The MSCI Asia Pacific Index fell 0.9 percent as of 10:58 a.m. in Hong Kong. Futures on the Standard & Poor’s 500 Index gained 0.3 percent, after the gauge slumped 2.3 percent yesterday. Oil fell 2.1 percent in New York and Brent crude traded below $100 a barrel for the first time since July. Gold rose 0.4 percent to $1,353.71 an ounce, after plunging 9.1 percent yesterday, the most since 1983. Australia’s dollar rose 0.2 percent versus the greenback and the yen lost 0.3 percent.
Confidence among U.S. homebuilders unexpectedly fell for a third month, manufacturing in the New York region expanded less than projected and China’s factory output moderated, data showed yesterday. Deadly bombings near the Boston Marathon’s finish line contributed to yesterday’s retreat in U.S. stocks. Finance ministers and central bankers from the Group of 20 nations meet April 18-19 in Washington to discuss the global economy.
“The developments overnight, slump in commodities prices and the Boston marathon bombing are certainly negative for risky assets,” said Paul Joseph Garcia, who helps manage $18.4 billion at BPI Asset Management Inc. in Manila, “Expect investors to seek cash and other safe havens like the U.S. dollar and U.S. Treasuries.”
Gold Futures
Gold futures have tumbled amid speculation Cyprus will sell the metal to raise cash and the Federal Reserve will scale back stimulus efforts, curbing the outlook for inflation. A bigger- than-forecast 0.6 percent drop in U.S. producer prices in March, reported by the government last week, was the latest sign that living costs remain subdued.
The drop in gold spurred speculation that some investors were selling to raise cash to cover positions acquired with borrowed money. CME Group Inc., owner of the world’s largest futures exchange, raised margin payments on gold, silver, platinum and palladium yesterday.
Bullion has dropped 19 percent in 2013, after rising for 12 years and scaling $1,900 an ounce in September 2011, as data showed the U.S. economy was improving and the Fed signaled it may rein in monetary stimulus this year. Hedge-fund manager John Paulson’s wager on gold wiped out almost $1 billion of his personal wealth in the past two trading days as the precious metal plummeted 13 percent.
Gold Slide
“Don’t forget the market is very long gold, it has been so for a long time, we have to see how much the sell-off is,” Lee Boon Keng, head of Bank Julius Baer & Co. investment solutions group in Singapore, said by phone today. “The big number people are fearful of is $1,200.” Bank Julius oversees more than $300 billion of client assets.
The S&P GSCI Spot Index of 24 raw materials fell 1.3 percent today, headed for the lowest close in nine months. Oil in New York touched a four-month low of $86.06 a barrel today and copper in London sank to $7,085 a metric ton yesterday, the lowest price since October 2011. Copper gained 0.5 percent today.
“Gold took a beating” because of margin calls expected on the Comex, Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said. “The Chinese number was the final nail on the head with people exiting from all commodities, including gold.”
About three stocks fell for each one that gained on the MSCI Asia Pacific Index. The benchmark regional equities gauge, yesterday traded at 13.9 times average estimated earnings compared with 14 for the Standard & Poor’s 500 Index and 12.5 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
The Asian gauge retreated yesterday from the highest level in 20 months after reports showed Chinese economic growth and industrial production expanded less than economists’ estimated.
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