02 Mar 2009
March 2 (Bloomberg) -- European and U.S. stock futures fell and Asian shares slid after Warren Buffett said the American economy is in "shambles" and South Korean exports slumped. Treasuries and gold rose.BHP Billiton Ltd., the world's largest mining company, lost 3.1 percent in Sydney as industrial metals and oil dropped. Mitsubishi UFJ Financial Group Inc., Japan's biggest bank, retreated 6.8 percent as bond risk rose and the nation's wage declines accelerated in January. HSBC Holdings Plc was halted from trading in Hong Kong before the bank said it plans to raise 12.5 billion pounds ($17.8 billion) in a rights offer.
"The slow and steady demise of global banks continues to undermine market sentiment," said Ben Potter, a research analyst at IG Markets in Melbourne.
Futures on the Dow Jones Euro Stoxx 50 Index, a benchmark for the euro region, lost 2.8 percent to 1,919 at 7:45 a.m. in London. The U.K.'s FTSE 100 Index is set to decrease 70 points, according to GFT Global Markets.
Futures on the Standard & Poor's 500 Index expiring this month dropped 1.6 percent to 722.10, indicating the gauge may extend a 12-year low. The MSCI Asia Pacific Index slid 3.4 percent.
The yield on the 10-year Treasury note fell three basis points to 2.99 percent, according to BGCantor Market Data. Immediate-delivery gold climbed as much as 1.2 percent to $953.70 an ounce in Singapore as investors sought assets perceived as safe.
Europe's Stoxx 600 has posted six straight monthly declines as the U.S. economy contracted at the fastest pace since 1982 and companies from Novartis SA to Deutsche Post AG forecast disappointing results.
Worst ‘Freefall'
Buffett, chairman of Berkshire Hathaway Inc., said in his annual letter to shareholders Feb. 28 that the U.S. economy will be a "shambles" this year and perhaps longer, before recovering from the reckless lending that caused the worst "freefall" he ever saw in the financial system.
European Union leaders spurned pleas for special aid for eastern Europe and a rescue package for automakers, bowing to German concerns over budget deficits as the economic crisis escalates. Last week three international lenders -- the World Bank, the European Bank for Reconstruction and Development and the European Investment Bank -- announced loans of up to 24.5 billion euros ($30.9 billion) for eastern European banks.
BHP dropped 3.1 percent to A$27.95 as copper led a decline in industrial metals in Asia and oil slipped 2.3 percent in New York.
Asian Banks
Mitsubishi UFJ tumbled 6.8 percent to 423 yen in Tokyo. Mizuho Financial Group Inc., Japan's second-largest bank, lost 4.3 percent to 180 yen. Monthly wages in Japan fell 1.3 percent from a year earlier, after declining 0.8 percent in December, the Labor Ministry said.
The cost of protecting Asia-Pacific bonds from default jumped, according to traders of credit-default swaps. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan rose 17.5 basis points, according to ICAP Plc.
Hynix Semiconductor Inc., Asia's second-biggest maker of memory chips, slumped 4.2 percent to 8,280 won in Seoul after the country's exports dropped for a fourth month in February.
HSBC reported 2008 net income of $5.73 billion, compared with $19.1 billion a year earlier. The bank will raise about 12.5 billion pounds by offering investors 5 new shares at 254 pence each for every 12 they own already.
American International Group Inc., the insurer deemed too important to fail, may get as much as $30 billion in new capital and have debts to the U.S. forgiven in the firm's third bailout, people familiar with the matter said. The U.S. Treasury last week agreed to convert as much as $25 billion of Citigroup Inc. preferred shares into common stock in a third rescue attempt.
