©2015 Bloomberg News
NPYNTK6JTSEF

(Bloomberg) — Asian stocks fell with U.S. index futures, and the euro weakened, after talks between Greece and its creditors broke down without a deal on bailout aid. Treasuries advanced, while crude oil extended losses with wheat.

The MSCI Asia Pacific Index slipped 0.5 percent by 9:52 a.m. in Tokyo, halting a three-day climb as equity gauges in Japan, Australia and South Korea sank at least 0.4 percent. Standard & Poor’s 500 Index futures dropped 0.3 percent, as yields on 10-year Treasuries fell four basis points. The euro weakened at least 0.4 percent against the dollar and the yen. Oil declined for a third day, as wheat slipped 0.8 percent.

Negotiations in Brussels between Greece and its creditors fell apart after just 45 minutes on Sunday, shifting the burden of finding a resolution to Greece’s funding crisis to a meeting of euro-area finance ministers set for June 18. The focus also remains on U.S. monetary policy this week, with the Federal Reserve reviewing interest rates Wednesday. A report on U.S. factory output is due Monday, along with Indian prices data.

“The stock market has priced in hopes that Greece will come to an agreement, so if that doesn’t happen, it’s going to be a really harsh situation for equities,” Shoji Hirakawa, chief equity strategist at Okasan Securities Co. in Tokyo, said by phone. “If they don’t reach an agreement, they might start moving ahead with Greece exiting the euro.”

Japan’s Topix index slipped 0.5 percent, extending last week’s 0.9 percent retreat, while the Kospi index in Seoul dropped 0.4 percent. Australia’s S&P/ASX 200 Index slid 0.9 percent as energy producers and utilities drove declines. The NZX 50 Index was down 0.3 percent in Wellington.

Euro Losses

E-mini futures on the Dow Jones Industrial Average dropped at least 0.3 percent with contracts on the Nasdaq 100 Index. The S&P 500 fell 0.7 percent on Friday, snapping a three-day advance.
In the foreign exchange market, the euro dropped 0.4 percent to $1.1222 and slipped as much as 0.7 percent to 138.08 yen. The euro also retreated against 18 of 24 emerging-market currencies, with Malaysia’s ringgit climbing 0.5 percent against the common currency.

Yields on Treasury notes due in a decade dropped to 2.35 percent as the Greek situation fueled demand for fixed-income assets. Similar maturity Australian bond rates slipped two basis points, or 0.02 percentage point, to 3 percent.

The European Commission said Sunday that the divide between what creditors demanded and what Greece was prepared to do couldn’t be bridged. The latest failure to find a formula to unlock as much as 7.2 billion euros ($8.1 billion) in aid for Greece’s anti-austerity government was accompanied by warnings about the risk of the country’s exit from the 19-nation euro.

‘Significant Gap’

“While some progress was made, the talks did not succeed as there remains a significant gap,” the commission said in a text message. “On this basis, further discussion will now have to take place in the Eurogroup.”

West Texas Intermediate crude lost 0.2 percent to $59.82 a barrel, while Brent oil sank 0.5 percent to $63.58 in Monday trading.

Libya, a member of the Organization of Petroleum Exporting Countries, is pumping 500,000 barrels a day, said an unidentified official from National Oil Corp., Libya News Agency reported. Drillers in the U.S. reduced the number of active rigs for a 27th straight week, data from Baker Hughes Inc. showed Friday.

Wheat Stockpiles

Wheat futures for September delivery lost 0.8 percent to $5.0625 a bushel, declining for a fourth day. Stockpiles of the grain will reach 814 million bushels in the season that ends in May, the most in five years, the U.S. Department of Agriculture said Wednesday. That compares with the 793 million estimated last month. Analysts in a Bloomberg survey forecast 794 million, on average.
Futures on Hong Kong’s Hang Seng Index added 0.4 percent in Friday trading, while contracts on the Hang Seng China Enterprises Index gained 0.5 percent.

Singapore-traded FTSE China A50 Index futures were up 0.5 percent Friday, with the value of Chinese stocks breaching $10 trillion for the first time last week. No other stock market has grown as much in dollar terms over the past year, data compiled by Bloomberg show.

–With assistance from Jonathan Stearns in Brussels and Marcus Bensasson in Athens.

To contact the reporters on this story: Emma O’Brien in Wellington at eobrien6@bloomberg.net; Toshiro Hasegawa in Tokyo at thasegawa6@bloomberg.net To contact the editors responsible for this story: Emma O’Brien at eobrien6@bloomberg.net John McCluskey