Hong Kong main share index finished lower in line with regional bourses, but further declines were capped by slightly stronger China manufacturing activity.]]> |||
Shanghai - Hong Kong main share index finished lower on Thursday in line with regional bourses, but further declines were capped by slightly stronger China manufacturing activity.
The Hang Seng Index unofficially closed down 0.3 percent at 23,333.18 points.
The China Enterprises Index of the leading offshore Chinese listings in Hong Kong stayed broadly flat throughout the day and finished up 0.1 percent.
Analysts said faster expansion in Chinese factory activity in a private survey limited selling in Hong Kong.
The flash HSBC/Markit manufacturing purchasing manager's index (PMI) edged up to a three-month high of 50.4 from a final reading of 50.2 in September.
Telecoms were the biggest losers ahead of earnings but railways helped offset the market's overall weakness.
China CNR Corp Ltd said it had been awarded a subway contract from Massachusetts.
China CNR Corp Ltd jumped 3.2 percent, and CSR Corp Ltd climbed 1.5 percent. - Reuters]]>
Japanese shares fell after US shares halted a four-day rally and consumer lenders declined with exporters.]]> |||
Tokyo - Japanese shares fell, paring yesterday’s surge in the Topix index, after US shares halted a four-day rally and consumer lenders declined with exporters.
Honda Motor, which gets about 84 percent of its revenue from outside Japan, was the biggest drag on the Topix Orix, a financial-services company, lost 3 percent.
Nidec sank 4.1 percent after the precision-motor maker reported earnings.
Mitsui OSK Lines jumped 1.8 percent, extending yesterday’s surge, as shipping rates climbed.
The Topix lost 0.3 percent to 1,232.34 at the close in Tokyo, after rising as much as 0.2 percent and sliding 1 percent.
Volume was 11 percent lower than the 30-day average.
The measure has swung an average of 1.5 percent each day this month, almost double the average for the rest of the year.
The Nikkei 225 Stock Average lost 0.4 percent to 15,138.96 today, while the yen slid 0.1 percent to 107.23 per dollar.
“Volatility risk is quite high right now,” said Tomomi Yamashita, who helps oversee the equivalent of $6.3 billion (R69 billion) at Shinkin Asset Management in Tokyo.
“It’s not like anything has changed in global fundamentals. Until we see more earnings results, investors are going to be sitting on the sidelines.”
Futures on the Standard & Poor’s 500 Index were little changed today.
The underlying equity gauge dropped 0.7 percent yesterday, after a 4.2 percent advance the previous four days, as energy shares led losses amid a drop in oil prices.
Communication stocks and automakers posted the biggest drags on the Topix, while consumer lenders fell the most among the industry gauges.
Honda dropped 1.4 percent to 3,365.5 yen.
SoftBank, Japan’s biggest mobile carrier by market value, slid 0.7 percent to 7,241 yen.
Orix lost 3 percent to 1,300 yen.
Nidec sank 4.1 percent to 6,733 yen.
The company posted a 37 percent gain in first-half net income to 37.2 billion yen ($347 million), matching analyst estimates.
Nidec kept its full-year forecasts unchanged.
Some investors are selling shares when companies post results, regardless of how good the earnings were, Shinkin’s Yamashita said.
Historic 10-day volatility on the Topix jumped to 36.2 yesterday, the highest since February, according to data compiled by Bloomberg.
“Japan’s stock volatility is rising,” said Ryuta Otsuka, a Tokyo-based strategist at Toyo Securities.
“Europe’s economy is sluggish, and it’s hard to read the direction of China’s. Japan is still feeling the impact of the sales-tax increase and now they’re trying to raise it again.” - Bloomberg News]]>
South African shares fell a second day on speculation that prospects for higher taxes will curb consumer spending.]]> |||
Johannesburg - South African shares fell a second day on speculation that prospects for higher taxes will curb consumer spending in an economy already set to grow at the slowest pace since the 2009 recession.
The FTSE/JSE All Share Index fell 1.2 percent to 47,613.26 by 12:22 p.m. in Johannesburg.
The bourse is down 8.8 percent since closing at a record high on July 29.
Retailers, including Woolworths and Mr Price, were among 108 decliners on the 165-member gauge.
South Africa will sacrifice economic growth the next two years to curb debt as it plans 27 billion rand of “structural increases” in revenue in the period, the National Treasury said in the mid-term budget released in Cape Town yesterday.
Tax increases are one of the options being considered, Director-General Lungisa Fuzile said.
The economy will probably expand 1.4 percent this year, the Treasury said.
“The circumstances don’t justify a major collapse in the market,” Wayne McCurrie, a Johannesburg-based money manager at Momentum Asset Management, said by phone today.
“Certainly we are going to get more weakness.”
Mr Price fell 1.4 percent to 205.77 rand, while Woolworths declined 1.5 percent to 70.72 rand.
MTN Group, Africa’s largest wireless operator, retreated 4.1 percent to 234.35 rand after the company said quarterly performance was hit by aggressive competition and stringent regulations. - Bloomberg News]]>
The rand weakened against the US dollar, a day after the finance minister warned that Africa's most advanced economy was not making sufficient progress to reduce poverty and create jobs.]]> |||
Johannesburg - The rand weakened against the dollar, a day after the finance minister warned that Africa's most advanced economy was not making sufficient progress to reduce poverty and create jobs.
In his maiden mid-term budget speech, minister Nhlanhla Nene downgraded South Africa's growth forecast for the next three years, saying the economy would only grow by 1.4 percent in 2014 compared to the 2.7 percent predicted by the ministry in February.
The rand rallied below the crucial 11.000 against the greenback following the budget speech, closing at 10.9970 in New York, before easing back 0.12 percent to 11.0100 by 08:14 SA time on Thursday.
Yields on government bonds dropped to seven-week lows shortly after Nene told parliament that the budget deficit for 2014/15 was now seen at 4.1 percent of GDP, well below a Reuters poll anticipating a 4.4 percent gap.
The yield on the benchmark government issue due in 2026 was flat at 7.895 percent in morning trade, after shedding 12.5 basis points in the previous session.
“While the MTBPS (budget speech) sent the correct message to the market, weaker than anticipated growth could result in higher gross government debt levels,” Rand Merchant Bank analyst Mamello Matikinca said in a note. - Reuters]]>
Heineken, the Dutch brewer that spurned an overture from SABMiller last month, reported third-quarter sales growth that missed estimates, extending the run of European companies hurt by sustained softness across the continent and in Russia.]]> |||
Matthew Boyle London
HEINEKEN, the Dutch brewer that spurned an overture from SABMiller last month, reported third-quarter sales growth that missed estimates, extending the run of European companies hurt by sustained softness across the continent and in Russia.
Revenue increased 0.2 percent from a year earlier, the Amsterdam-based company said yesterday, compared with the 1.5 percent median estimate of 11 analysts. Beer volume fell 0.2 percent, compared with the 0.5 percent gain predicted by analysts. Both figures are reported on a so-called consolidated basis, and exclude the effects of acquisitions, disposals and currency swings. The shares dropped.
The decline in Europe, along with the continued fallout from sanctions against Russia, has affected industries as varied as luxury goods to industrial equipment. Heineken’s beer volume in central and eastern Europe fell 6.6 percent and dropped 3.1 percent in western Europe, missing analysts’ estimates. Even so, the company confirmed its outlook for the year for operating profit margin expansion to be ahead of its medium-term guidance of a 40 basis point expansion.
“The main miss in the numbers is clearly the western European region,” Marco Gulpers at ING said. “However, the confirmation of earnings before interest and taxes growth for the year should bring comfort.”
Brewers such as Heineken, SABMiller and Anheuser-Busch InBev have pursued growth through acquisitions in recent years as sales volumes have declined in the US and Europe. Heineken, which termed a takeover approach from SABMiller as “non-actionable”, said on August 20 that it expected growth to moderate in the second half of the year.
Heineken is the latest in a string of European consumer companies to report results that fell short of estimates. Diageo posted a decline in revenue in the region, missing expectations, and British American Tobacco reported yesterday nine-month cigarette volume that fell more than anticipated.
Heineken cited increasing regulation in Russia and a “softening” economy for a decline in beer volume there, while sales in Poland were hit by price competition. In western Europe, “exceptionally high levels” of rain during the summer curtailed beer drinking in the UK, France and Italy.
“Amid a volatile global environment and poor weather during the high-selling season in Europe, we maintained top-line growth,” Jean-François van Boxmeer, Heineken’s chief executive, said.
Outside of Europe, Heineken’s shipments rose 6.5 percent in Africa and the Middle East, helped by a new brewery in Ethiopia, and by 8.7 percent in Asia, fuelled in part by sales of Tiger beer in Vietnam. In the Americas, sales volume rose 3.2 percent thanks to continuing gains in Mexico.
Heineken’s namesake brand boosted volume 3 percent, the company said, below the 6.6 percent uptick in the first half of the year. – Bloomberg]]>
Asian shares sagged on Thursday after a retreat on Wall Street and falling crude oil prices rekindled investor anxiety.]]> |||
Tokyo - Asian shares sagged on Thursday after a retreat on Wall Street and falling crude oil prices rekindled investor anxiety over slowing global growth, while a mixed picture on Chinese manufacturing failed to impress markets.
Japan's Nikkei share average fell 0.5 percent while MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.2 percent.
The flash HSBC/Markit manufacturing purchasing managers' index (PMI) edged up to a three-month high of 50.4 from a final reading of 50.2 in September, and just a hair's breadth from the 50.3 reading forecast by analysts.
But the level of output in factories fell to a five-month low of 50.7, just above the 50-point level that separates growth from contraction on a monthly basis, underscoring a cooling economy.
“While the manufacturing sector likely stabilised in October, the economy continues to show signs of insufficient effective demand,” said Hongbin Qu, chief economist for China at HSBC.
Prior to the Chinese PMI, Wall Street shares slid on Wednesday after big gains in the past few days.
Energy companies were hit by a fall in oil prices while earning results from companies such as Boeing and Biogen Idec failed to meet investors' lofty expectations.
In addition, a shooting incident at the Canadian parliament in Ottawa unnerved investors.
Oil prices flirted near multi-year lows hit last week, as data showed a second consecutive weekly jump in US crude stockpiles.
The US Energy Information Administration said crude stocks rose by 7.11 million barrels, more than double the 2.7 million barrel increase analysts had expected.
US crude futures slipped in Asia, extending its 2.8 percent fall on Wednesday to trade at $80.46 per barrel, near two-year low of $79.78 hit last week.
“I think it will take some time before markets calm down. Market sentiment is still fragile. The market has realised that the US economy cannot be decoupled from sluggishness in the rest of the world,” said Tsuyoshi Shimizu, chief strategist at Mizuho Asset Management.
“But on the other hand, I think the market is now going to the other extreme in betting on recoupling of the US and the rest of the world,” he added.
The fall in oil prices underscored worries over the health of the global economy.
Turbulence has gripped global markets in recent weeks on anxiety about slowing world growth. In particular, investors have been rattled by the threat of deflation and recession in Europe and the Chinese economy cooling to its weakest in over five years in the third quarter.
A string of manufacturing reports from Europe due later in the day will give investors another chance to gauge the pulse of the world economy.
In the United States, a mild rebound in US consumer prices in September reduced some bets the Fed might postpone possible plans to raise rates in 2015, keeping US Treasuries in check.
The 10-year US Treasuries yielded 2.208 percent , having risen as high as 2.250 percent on Wednesday.
The data also helped to lift the US dollar against other currencies. The euro dipped to $1.2674, near its lowest level in more than a week, having slipped from $1.28875 marked on Wednesday last week.
The euro was not helped by anxiety that some European banks may fail stress tests by the European Central Bank, the outcome of which is due on Sunday. Spanish news agency EFE, citing unnamed financial sources, said 11 banks were set to fail.
The dollar also ticked up to 107.18 yen, up about a full yen from Tuesday's low of 106.15.
Elsewhere, the New Zealand dollar tumbled 1.0 percent to $0.78749 following data showing consumer price inflation in New Zealand slowed in the third quarter. - Reuters]]>
American stocks erased earlier gains to close lower on Wednesday as a shooting at the Canadian parliament unnerved investors.]]> |||
New York - US stocks erased earlier gains to close lower on Wednesday as a shooting at the Canadian parliament unnerved investors, Boeing and Biogen sold off following results, and energy stocks fell along with oil prices.
Indexes had traded in positive territory for much of the session, putting the S&P 500 on track for a fifth straight day of gains. Earnings initially drove the move higher, with technology and material shares up on the back of strong results.
Market benchmarks began drifting lower after the government reported a surprise increase in crude oil inventories. Energy shares were off 1.7 percent as crude oil fell, settling near $80 per barrel.
Canada's capital was jolted by the fatal shooting of a soldier and an attack on the parliament building in which gunshots were fired outside a room where Prime Minister Stephen Harper was speaking. Toronto stocks fell 1.6 percent, also affected by oil's slide.
“The situation out of Ottawa hastened the decline a bit, but I think it started with oil because people are very concerned about global growth,” said John Canally, chief economic and investment strategist for LPL Financial.
If the Ottawa shooting is related to domestic terrorism, Canally added, “it'll put weight on the markets along with global growth”.
The Dow Jones industrial average fell 153.49 points, or 0.92 percent, to 16,461.32, the S&P 500 lost 14.17 points, or 0.73 percent, to 1,927.11 and the Nasdaq Composite dropped 36.63 points, or 0.83 percent, to 4,382.85.
Weaker oil and the Canada violence offset some encouraging economic news. US consumer prices rose 0.1 percent in September as energy costs fell broadly, painting a weak inflation picture that could give the Federal Reserve room to keep interest rates low.
Among the day's earnings movers, Biogen Idec fell 5.4 percent to $309.07 after sales of its multiple sclerosis drug, Tecfidera, fell short of lofty expectations.
Boeing lost 4.5 percent to $121.91, giving back most of the gains from the four prior sessions. Boeing reported higher-than-expected earnings and lifted its outlook, but analysts raised concern about the costs of the 787 Dreamliner.
On the upside, Yahoo and Broadcom rallied a day after both tech companies reported better-than-expected revenue.
Broadcom shares climbed 5.5 percent to $39.37 while Yahoo was up 4.5 percent at $41.99. The two made up the S&P 500's top percentage gainers.
After the close, revenue at Dow component AT&T fell short of analyst expectations and shares were down more than 2 percent.
Declining issues outnumbered advancers on the NYSE by 2,138 to 928, for a 2.30-to-1 ratio on the downside; on the Nasdaq, 1,988 issues fell and 701 advanced.
The benchmark S&P 500 index posted 44 new 52-week highs and 1 new low; the Nasdaq Composite recorded 54 new highs and 35 new lows.
About 7 billion shares changed hands on US exchanges, below the 8.3 billion October average, according to BATS Global Markets. - Reuters]]>
European shares edged up and the euro hit a one-week low against the dollar.]]> |||
London - European shares edged up and the euro hit a one-week low against the dollar on Wednesday, driven by upbeat company earnings results and hopes of corporate bond buying by the European Central Bank.
Shares in Swiss engineering group ABB gained 3.1 percent after posting a bigger-than-expected rise in orders, helped by demand from the oil and gas industries.
Outdoor equipment maker Husqvarna surged 6.1 percent after reporting a rise in earnings that was above forecasts.
The market moves were tentative as investors remain nervous about the state of the global economy, with the euro zone a key soft spot.
Such worries may intensify on Thursday when regional business surveys are due.
Several sources told Reuters on Tuesday the ECB was considering buying corporate bonds on the secondary market and may make a final decision as soon as December with a view to begin purchases early next year.
That would expand the private sector asset-buying programme the ECB began on Monday with the aim of giving the economy a shot in the arm and safeguarding the euro zone from deflation, which has already gripped five of its 18 members.
The FTSEurofirst 300 index of top European shares was up 0.1 percent at 1,300.72 points, after surging 2.1 percent on Tuesday.
The euro hit a one-week low of 1.27025 before bouncing to 1.2719, virtually flat on the day.
“The general takeaway here for a lot of people is that it shows commitment from the ECB trying to find ways to expand its balance sheet. And also it shows ... the ECB wanting to pick up the pace,” said Paul Robson, a currency strategist at RBS.
In the United States, Apple and Texas Instruments posted stronger-than-expected quarterly earnings, lifting the tech-heavy Nasdaq Composite Index more than 2 percent on Tuesday.
That, together with data showing a stronger-than-expected 2.4 percent rise in US domestic home resales last month provided evidence that the US economic recovery maintained some momentum.
“Sentiment turned positive overnight on good earnings reported by US corporates, much better than expected US existing home sales data and the rumours that the ECB is considering the option of buying corporate bonds in the secondary market,” said Daniel Lee at Credit Agricole.
Some hopes were also coming from Japan, where trade data showed exports rose 6.9 percent in September from a year earlier, the fastest pace in seven months.
The upbeat signals from the United States bolstered the dollar, although traders were wary of US inflation data due at 14:30 SA time.
Economists expect annual core CPI inflation to stay flat at 1.7 percent in September, and a cooler reading would add to speculation that the Federal Reserve will wait longer before raising interest rates.
The consensus view is that the US central bank will decide at its October 28 to 29 policy meeting to wrap up its third round of asset purchases with new money, known as quantitative easing.
But short-term interest rates futures imply markets do not expect the Fed to hike rates until late 2015.
The dollar inched lower on the day against the yen to 106.88 yen.
Euro zone bond yields extended their falls on the back of the ECB's plans.
German 10-year Bund yields, which set the standard for euro zone borrowing costs, fell 1 basis point to 0.86 percent.
Peripheral bond yields fell by more.
“The news of bond buying had quite a beneficial effect on the non-German bond markets, for good reason, so spread narrowing was quite substantial and today there is still some after-effect of that,” said KBC strategist Piet Lammens. - Reuters]]>
Hong Kong shares had its best daily gain since early September, underpinned by a rally in US shares and optimism the Chinese government will roll out more stimulus to prop up growth.]]> |||
Shanghai - Hong Kong shares had its best daily gain since early September, underpinned by a rally in US shares and optimism the Chinese government will roll out more stimulus to prop up growth.
The Hang Seng Index closed up 1.4 percent at 23,403.97 points, its biggest daily rise since September 3.
The China Enterprises Index of the leading offshore Chinese listings in Hong Kong rose 1.5 percent.
The October HSBC/Markit flash China Purchasing Managers' Index (PMI) is due on Thursday.
If factory activity shows signs of slowing, Beijing may introduce additional stimulus measures to bolster growth, analysts said.
Oil firms were the biggest gainers.
Sinopec ended up 1.5 percent, China Oilfield Service rose 2.8 percent and PetroChina surged 3 percent.
Technology shares rallied on the back of strong performances in US peers.
Analysts said reports that Tencent Holdings would set up a cross-border online trading platform with a Taiwan company, pushed its shares up by 3.4 percent.
Chinese electric carmaker BYD posted its biggest rise in two months after the Chinese government said it would promote wider adoption of new energy vehicles for public transportation to tackle pollution in northern China. - Reuters]]>
Britain's FTSE 100 lagged small gains in main euro zone equity indexes as a gloomy update from British American Tobacco weighed on companies which sell consumer goods.]]> |||
London - Britain's FTSE 100 lagged small gains in main euro zone equity indexes on Wednesday as a gloomy update from British American Tobacco weighed on companies which sell consumer goods.
Shares in BAT fell 4 percent by 09:41 SA time as the tobacco firm reported a revenue drop in the first nine months of the year, citing a slow economic recovery in western Europe and adverse currency moves.
Imperial Tobacco fell 1.1 percent, with other companies exposed to weaker consumer demand and currency fluctuations against the pound, such as Diageo, also lower.
Companies which sell consumer staples knocked 14.6 points off the FTSE 100, which was down by 6.59 points, or 0.1 percent, at 6,365.74 points.
It lagged gains of between 0.2 percent and 0.6 percent for main euro zone indexes such as Germany's Dax, which benefited from a Reuters report suggesting the European Central Bank was considering buying corporate bonds to revive the region's economy.
“The BAT update is having an effect on the entire defensive sector,” Manoj Ladwa, head of trading at TJM Partners, said.
“The FTSE has underperformed because of its composition and we expect this to continue.”
MID CAPS OUTPERFORM
The mid-cap FTSE 250 index was up 0.5 percent, boosted by a bullish outlook update by gambling technology company Playtech and bid speculation surrounding specialty chemicals maker Croda International.
Shares in Croda rose 2.8 percent, adding to a 1.8 percent rise on Tuesday, which the Daily Mail and Daily Express attributed to talk of a 4 billion pound (R71 billion) offer for the firm.
Playtech rose 4.7 percent after saying it was confident it would exceed current market expectations after a strong start to its fourth quarter, which followed a 29 percent rise in revenue in the preceding period.
On the downside, Britain's biggest household goods retailer Home Retail Group fell 2.9 percent after announcing plans to close a quarter of its Homebase home improvement stores by 2018 as it prioritises the development of its main Argos chain.
SuperGroup, the British company behind the Superdry fashion brand, fell 3.5 percent after it named former Co-operative Group boss Euan Sutherland as its new chief executive, replacing its founder Julian Dunkerton. - Reuters]]>