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Tag: nikkei

  • Hang Seng leads selloff for Asia stocks, with 4% slump after China data

    Hang Seng leads selloff for Asia stocks, with 4% slump after China data

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    TOKYO (AP) — Asian shares slid Wednesday after a decline overnight on Wall Street and disappointing China growth data, while Tokyo’s main benchmark momentarily hit another 30-year high.

    Japan’s benchmark Nikkei 225
    NIY00,
    -0.95%
    reached a session high of 36,239.22, but reverted lower, last down 0.3% to 35,477. The Nikkei has been hitting new 34-year highs, or the best since February 1990 during the so-called financial bubble. Buying focused on semiconductor-related shares, and a cheap yen helped boost exporter issues.

    Don’t miss: Wall Street firms catch up to Buffett enthusiasm on Japan as Nikkei keeps hitting records

    Hong Kong’s Hang Seng
    HK:HSCI
    tumbled 4% to 15,220.72, with losses building after data showed China hitting its economic growth target of 5.2% for 2023, surpassing government expectations, but short of the 5.3% some analysts expected. The Shanghai Composite
    CN:SHCOMP
    shed 2% to 2,833.62.

    Read on: China hit its economic-growth target without ‘massive stimulus,’ boasts Premier Li Qiang

    Australia’s S&P/ASX 200
    AU:ASX10000
    slipped 0.2% to 7,401.30. South Korea’s Kospi
    KR:180721
    dropped 2.4% to 2,435.90.

    Investors were keeping their eyes on upcoming earnings reports, as well as potential moves by the world’s central banks, to gauge their next moves.
    Wall Street slipped in a lackluster return to trading following a three-day holiday weekend.

    See: What’s next for stocks as ‘tired’ market stalls in 2024 ahead of closely watched retail sales

    The S&P 500
    SPX
    fell 17.85 points, or 0.4%, to 4,765.98. The Dow Jones Industrial Average
    DJIA
    dropped 231.86, or 0.6%, to 37,361.12, and the Nasdaq
    COMP
    sank 28.41, or 0.2%, to 14,944.35.

    Spirit Airlines
    SAVE,
    -47.09%
    lost 47.1% after a U.S. judge blocked its takeover by JetBlue Airways
    JBLU,
    +4.91%
    on concerns it would mean higher airfares for flyers. JetBlue rose 4.9%.

    Stocks of banks were mixed, meanwhile, as earnings reporting season ramps up for the final three months of 2023. Morgan Stanley
    MS,
    -4.16%
    sank 4.2% after it said a legal matter and a special assessment knocked $535 million off its pretax earnings, while Goldman Sachs
    GS,
    +0.71%
    edged 0.7% higher after reporting results that topped Wall Street’s forecasts.

    Companies across the S&P 500 are likely to report meager growth in profits for the fourth quarter from a year earlier, if any, if Wall Street analysts’ forecasts are to be believed. Earnings have been under pressure for more than a year because of rising costs amid high inflation.

    But optimism is higher for 2024, where analysts are forecasting a strong 11.8% growth in earnings per share for S&P 500 companies, according to FactSet. That, plus expectations for several cuts to interest rates by the Federal Reserve this year, have helped the S&P 500 rally to 10 winning weeks in the last 11. The index remains within 0.6% of its all-time high set two years ago.

    Treasury yields
    BX:TMUBMUSD10Y
    have already sunk on expectations for upcoming cuts to interest rates, which traders believe could begin as early as March. It’s a sharp turnaround from the past couple years, when the Federal Reserve was hiking rates drastically in hopes of getting high inflation under control.

    The Tell: No rate cuts in 2024? Why investors should think about the ‘unthinkable.’

    Easier rates and yields relax the pressure on the economy and financial system, while also boosting prices for investments. And for the past six months, interest rates have been the main force moving the stock market, according to Michael Wilson, strategist at Morgan Stanley.

    He sees that dynamic continuing in the near term, with the “bond market still in charge.”

    For now, traders are penciling in many more cuts to rates through 2024 than the Fed itself has indicated. That raises the potential for big market swings around each speech by a Fed official or economic report.

    Yields rose in the bond market after Fed governor Christopher Waller said in a speech that “policy is set properly” on interest rates. Following the speech, traders pushed some bets for the Fed’s first cut to rates to happen in May instead of March.

    On Wall Street, Boeing fell to one of the market’s sharper losses as worries continue about troubles for its 737 Max 9 aircraft following the recent in-flight blowout of an Alaska Air
    ALK,
    -2.13%
    jet. Boeing
    BA,
    -7.89%
    lost 7.9%.

    In energy trading, benchmark U.S. crude
    CL00,
    -1.55%
    lost 90 cents to $71.75 a barrel. Brent crude
    BRN00,
    -1.37%    ,
    the international standard, fell 78 cents to $77.68 a barrel.

    In currency trading, the U.S. dollar
    USDJPY,
    +0.44%
    rose to 147.90 Japanese yen from 147.09 yen. The euro
    EURUSD,
    -0.10%
    cost $1.0868, down from $1.0880.

    MarketWatch contributed to this report

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  • Stocks, oil skid as China’s COVID protests roil sentiment

    Stocks, oil skid as China’s COVID protests roil sentiment

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    Stocks and oil weakened on Monday as rare protests in major Chinese cities against the country’s strict zero-COVID policy raised worries about the management of the virus in the world’s second-largest economy.

    MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.6% after US stocks ended the previous session with mild losses.

    Australian shares lost 0.47% while Japan’s Nikkei stock index was down 0.37%.

    South Korea’s KOSPI 200 index retreated 1.35% in early trade and New Zealand’s S&P/NZX50 Index was off 0.4%.

    In China, demonstrators and police clashed in Shanghai on Sunday night as protests over the country’s stringent COVID restrictions flared for the third day.

    There were also protests in Wuhan, Chengdu, and parts of the capital Beijing late Sunday as COVID restrictions were put in place in an attempt to quell fresh outbreaks.

    The dollar extended gains against the offshore yuan, rising 0.74%, and the focus shifts to the opening of China’s markets later in the Asian morning.

    The COVID rules and resulting protests are creating fears the economic hit for China will be greater than expected.

    “A growing list of cities, including those with large populations, have imposed strong restrictions on movement because of a surge in infections, there will inevitably be a negative impact on economic activity from the restrictions on movement,” CBA analysts said on Monday.

    “Even if China is on a path to eventually move away from its zero-COVID approach, the low level of vaccination among the elderly means the exit is likely to be slow and possibly disorderly. The economic impacts are unlikely to be small.”

    China’s case numbers have hit record highs, with nearly 40,000 new infections on Saturday.

    Fears about Chinese economic growth also hit commodities in Asia trade.

    S&P 500 and Nasdaq futures both fell, pointing to possible declines in Wall Street later in the day.

    US crude CLc1 dipped 0.25% to $76.08 a barrel. Brent crude LCOc1 fell 0.16 to $83.48 per barrel.

    Both benchmarks slid to 10-month lows last week and declined for a third consecutive week

    “Mobility data in China is showing the impact of a resurgence in COVID-19 cases,” ANZ analysts wrote in a research note Monday. “This remains a headwind for oil demand that, combined with weakness in the US dollar, is creating a negative backdrop for oil prices.”

    Yields on benchmark 10-year Treasury notes rose to 3.6905% from its US close of 3.702% on Friday. The two-year yield, which tracks traders’ expectations of Fed fund rates, touched 4.467% compared with a US close of 4.479%.

    The dollar rose 0.22% against the yen to 139.4 JPY. It remains well off its high this year of 151.94 on Oct. 21.

    The euro was down 0.2% on the day at $1.0371, having gained 4.94% in a month, while the dollar index, which tracks the greenback against a basket of currencies of other major trading partners, was up at 106.3.

    In the United States, a speech by Federal Reserve Chair Jerome Powell in Washington on Wednesday to the Brookings Institute on the economic outlook and the labour market will be closely watched by investors.

    Gold was slightly lower. Spot gold was traded at $1750.49 per ounce.

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  • Asia shares slip, make or break day for UK bonds

    Asia shares slip, make or break day for UK bonds

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    Asian share markets slipped on Monday following another drubbing for Wall Street as investors brace for further drastic tightening in global financial conditions, with all the risks of recession that brings.

    Concerns about financial stability added to the corrosive mix with all eyes on UK bonds now that the Bank of England’s (BoE’s) emergency buying spree is over.

    Prime Minister Liz Truss decision to fire her finance minister might help reassure investors, but her own fate is unclear with media reporting Tory lawmakers will try and replace her this week. 

    BoE Governor Andrew Bailey warned over the weekend that rates might have to rise by more than thought just a couple of months ago. 

    “The BoE was doing emergency bond-buying that’s technically identical to QE with one hand, while furiously raising the policy rate with the other,” said analysts at ANZ in a note.

    “Monday’s market action will provide a test, not only for the survival of Truss’ low-tax vision, but also her political future.”

    Sterling was quoted up 0.6% at $1.1240, but trading was sparse with little liquidity in Asia.

    In equity markets, MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.5% and back toward last week’s 2-1/2 year low. Japan’s Nikkei shed 1.1% and South Korea 1.5%.

    S&P 500 futures ESc1 edged up 0.5% after Friday’s sharp retreat, while Nasdaq futures NQc1 added 0.4%.

    While the S&P is an eye-watering 25% off its peak, BofA economist Jared Woodard warned the slide was not over given the world was transitioning from two decades of 2% inflation to a time of something more like 5% inflation.

    “$70 trillion of ‘new’ tech, growth, and government bond assets priced for a 2% world are vulnerable to these secular shifts as ‘old’ industries like energy and materials surge, reversing decades of under-investment,” he wrote in a note.

    “Rotating out of 60/40 proxies and buying what is scarce – power, food, energy – is the best way for investors to diversify.”

    INTERVENTION WATCH

    A red-hot US inflation report last week has markets fully expecting the Federal Reserve to hike rates by 75 basis points next month, and likely by the same again in December. 

    A host of Fed policymakers are speaking this week, so there will be plenty of opportunity for hawkish headlines. The earnings season also continues with Tesla Inc, Netflix and Johnson & Johnson reporting, among others.

    In China, the Communist Party Congress is expected to grant a third term to President Xi Jinping, while there could be a reshuffle of top economic roles as incumbents are near retirement age or term-limits. Read full story

    In currency markets, the dollar remains king as investors price in U.S. rates peaking around 5%.

    The yen has been particularly hard hit as the Bank of Japan sticks to its super-easy policy, while the authorities refrained from intervention last week even as the dollar sped past the 148.00 level to 32-year peaks.

    Early Monday, the dollar was up at 148.62 yen and heading for the next target at 150.00.

    The euro was holding at $0.9733, having put in a steadier performance last week, while the U.S. dollar index eased a fraction to 113.20.

    The rise of the dollar and global bond yields has been a drag for gold, which was stuck at $1,646 an ounce. 

    Oil prices were trying to bounce after sinking more than 6% last week as fears of a demand slowdown outweighed OPEC’s plans to cut output.

    Brent LCOc1 firmed 64 cents to $92.27 a barrel, while U.S. crude CLc1 rose 55 cents to $86.16 per barrel.

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  • Asian stocks moving lower in wake of latest volatile session on Wall Street

    Asian stocks moving lower in wake of latest volatile session on Wall Street

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    TOKYO (AP) — Asian shares were mostly lower on Wednesday following another volatile day on Wall Street, as traders braced for updates on inflation and corporate earnings.

    Benchmarks fell in Tokyo
    NIY00,
    +0.09%    ,
    Shanghai
    SHCOMP,
    -1.12%
    and Hong Kong
    HSI00,
    -2.90%
    but rose in Sydney.

    South Korea’s Kospi
    180721,
    +0.34%
    lost 0.1% to 2,189.86 after the Bank of Korea raised its key rate by 0.5 percentage point, amid the backdrop of Fed rate hikes in the U.S. and growing inflation risks from the weak won and rebounding global oil prices.

    In currency trading the Japanese yen declined to a 24-year low against the U.S. dollar
    JPYUSD,
    -0.24
    at 146 yen-levels, raising expectations of another intervention by Tokyo to prop up the yen. By midday the dollar
    USDJPY,
    +0.24%
    was at 146.17 yen, up from 145.80 late Tuesday. The euro
    EURUSD,
    +0.12%
    cost 96.96 cents, inching down from 97.07 yen.

    The weaker yen raises costs for both consumers and businesses who rely on imports of food, fuel and other needs, but the bigger purchasing power for foreign currencies is expected to boost tourism. Japan reopened fully to individual tourist travel this week after being closed for more than two years because of the pandemic.

    Japan’s benchmark Nikkei 225 lost 0.2% to 26,348.73 in morning trading. Australia’s S&P/ASX 200
    ASX10000,
    -1.54%
    gained nearly 0.2% to 6,656.00. Hong Kong’s Hang Seng slipped 2% to 16,491.39, while the Shanghai Composite shed 1.2% to 2,943.24.

    On Tuesday, the S&P 500
    SPX,
    -0.65%
    fell 0.7%, marking its fifth straight loss, closing at 3,588.84. The Nasdaq
    COMP,
    -1.10%
    dropped 1.1% to 10,426.19. The Dow Jones Industrial Average
    DJIA,
    +0.12%
    added 0.1% to 29,239.19, while the Russell 2000 index
    RUT,
    +0.06%
    rose 1 point, or about 0.1%, to 1,692.92.

    Recession fears have been weighing heavily on markets as stubbornly hot inflation burns businesses and consumers. Economic growth has been slowing as consumers temper spending and the Federal Reserve and other central banks raise interest rates.

    The International Monetary Fund on Tuesday cut its forecast for global economic growth in 2023 to 2.7%, down from the 2.9% it had estimated in July. The cut comes as Europe faces a particularly high risk of a recession with energy costs soaring amid Russia’s invasion of Ukraine.

    See: Global economy most vulnerable since COVID crisis, with housing market at potential ‘tipping point,’ IMF warns

    Wall Street is closely watching the Federal Reserve as it continues to aggressively raise its benchmark interest rate to make borrowing more expensive and slow economic growth. The goal is to cool inflation, but the strategy carries the risk of slowing the economy too much and pushing it into a recession.

    “The market desperately wants a reason for the Fed to be able to stop tightening and the data recently hasn’t given them that opening with respect to inflation,” said Willie Delwiche, investment strategist at All Star Charts.

    Computer-chip manufacturers continued slipping in the wake of the U.S. government’s decision to tighten export controls on semiconductors and chip manufacturing equipment to China. Qualcomm
    QCOM,
    -3.99%
    fell 4%.

    See: Intel reportedly plans to lay off thousands of workers, with details potentially emerging alongside quarterly earnings

    Uber
    UBER,
    -10.42%
    fell 10.4% and Lyft
    LYFT,
    -12.02%
    slumped 12% following a proposal by the U.S. government that could give contract workers at ride-hailing and other gig economy companies full status as employees.

    The Fed will release minutes from its last meeting on Wednesday, possibly giving Wall Street more insight into its views on inflation and next steps.

    Investors still expect the Fed to raise its overnight rate by three-quarters of a percentage point next month, the fourth such increase. That’s triple the usual amount, and would bring the rate up to a range of 3.75% to 4%. It started the year at virtually zero.

    Rex Nutting: Leading indicators show inflation is slowing, but Fed policy makers are too busy looking in rearview mirror to notice

    The government will also release its report on wholesale prices Wednesday, providing an update on how inflation is hitting businesses. The closely watched report on consumer prices will be released on Thursday, and a report on retail sales is due Friday.

    “Everyone is still hoping that every inflation report will be the one that shows that pressure is alleviating,” Delwiche said.

    Wall Street is also gearing up for the start of the latest corporate earnings reporting season, which could provide a clearer picture of inflation’s impact.

    Among the companies reporting quarterly results this week: PepsiCo
    PEP,
    +0.48%    ,
    Delta Air Lines
    DAL,
    -1.97%
    and Domino’s Pizza
    DPZ,
    -1.99%    .
    Banks including Citigroup
    C,
    -2.76%
    and JPMorgan Chase
    JPM,
    -2.89%
    will also report results.

    In energy trading, benchmark U.S. crude
    CL00,
    -0.75%
    lost 82 cents to $88.53 a barrel in electronic trading on the New York Mercantile Exchange. U.S. crude-oil prices fell 2% Tuesday. Brent crude
    BRN00,
    -0.56%    ,
    the international pricing standard, fell 62 cents to $93.67 a barrel.

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