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Australian stocks take negative start, S&P 500 skids 0.4%

Australian stocks take negative start, S&P 500 skids 0.4%

NEW YORK: Australian stocks futures slipped with Australia’s dollar, stocks and government bonds after Chinese imports plunged and US payrolls data fueled speculation over the outlook for higher interest rates. Oil extended gains following the best two weeks for Brent crude in 17 years.

Standard & Poor’s 500 Index futures fell 0.4 per cent by 8.56am in Tokyo, as the S&P/ASX 200 Index dropped 0.5 per cent in Sydney. The Aussie lost 0.4 per cent as yields on 10-year debt jumped 11 basis points, pacing Friday’s increase in Treasury rates. New Zealand stocks also fell with both countries counting China as their biggest trading partner, while Japanese index futures signaled gains amid a weaker yen. Copper futures declined 0.1 per cent as Brent and West Texas Intermediate oil rose a third day, climbing at least 1.4 per cent.

Imports to China slumped the most in more than five years in January, while exports unexpectedly fell, swelling the trade surplus to a record and highlighting the weakness in domestic demand for Asia’s No. 1 economy. US payrolls capped the biggest three-month gain in 17 years, a report Friday showed. Greek Prime Minister Alexis Tsipras reaffirmed his rejection of the country’s bailout program yesterday, while Ukraine peace talks are set to resume this weekamid escalating violence there.

“Chinese policy makers are acutely aware of potential issues within their economy and the bias is for more stimulus,” Tim Schroeders, a portfolio manager who helps oversee about US$1 billion (RM3.56 billion) in equities at Pengana Capital Ltd. in Melbourne, said by phone. “The US jobs data reaffirms the likelihood of a Fed change in policy around mid year. It caught the market on the wrong foot to a degree. It’s realigned people’s thoughts.”

The Aussie held losses after Prime Minister Tony Abbott survived a challenge to his leadership, with lawmakers in his Liberal Party voting 61 to 39 against a motion that would have forced a ballot on whether to oust him. Australian debt due in a decade yielded 2.56 per cent in a second day of declines for the notes.

The New Zealand dollar fell 0.2 per cent to 73.50 US cents after sinking 0.4 per cent on Friday, while New Zealand government bonds yielded 3.21 per cent, up three basis points, or 0.04 per centage point. The euro was little changed at US$1.1313 after earlier dropping as much as 0.3 per cent.

Yields on 10-year US Treasuries jumped 14 basis points to 1.96 per cent on Friday as the jobs data underlined the risk of a US rate increase this year. While utilities and health-care stocks drove the S&P 500 lower, bank stocks gained 0.7 per cent on the outlook for borrowing costs. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, climbed 1 per cent to pare its decline in the week.