South Africa's rand extended losses against the US dollar, keeping in step with its emerging market peers.]]> |||
Johannesburg - South Africa's rand extended losses against the dollar on Wednesday, keeping in step with its emerging market peers even as local inflation data suggested the central bank may hike interest rates next month.
Emerging markets, depressed by poor Chinese factory data and an escalating geo-political crisis in Ukraine, saw its currencies trade lower against the dollar in the session.
At 17:25 SA time, all but two emerging market currencies tracked by Reuters were weaker against the dollar, with the rand taking the second biggest loser spot after Indonesia's rupiah.
The local unit gave up nearly 1 percent to trade at a session low of 10.6265 to the dollar in the afternoon session.
The next support area for the currency should come in at the April 4 low around 10.6600, and 11 rand levels from earlier in the year are still on the cards.
The weak rand helped to push consumer prices in March to the top of the central bank's 3-6 percent target band on a year-on-year basis, with core inflation also rising after months of no change.
The monthly increase in CPI was the largest in over 5 years, official data showed earlier.
“The effects of a weak rand and rising local food prices mean it is likely to accelerate further over the next six months or so. This should be enough to prompt the central bank into further tightening, and an interest rate hike seems likely at its next MPC meeting in May,” said Shilan Shah of Capital Economics.
The rand has stabilised since hitting 5-year lows in January, but external risks to emerging markets could combine with domestic worries about mining strikes to take the rand back to those levels, analysts said.
South African platinum producers are in the second day of official talks aimed at ending a three-month strike at their mines, after making a new wage offer to the striking AMCU union.
Government bonds fell to the session's low after the higher-than-expected inflation data.
The yield on the benchmark 2026 issue climbed to 8.57 percent, while the 2015 note rose to 6.9 percent, levels last seen nearly a month ago. - Reuters]]>
South African shares ended mixed after earlier reaching record highs despite an hour-long technical glitch.]]> |||
Johannesburg - South African shares ended mixed on Wednesday after earlier reaching record highs despite an hour-long technical glitch at the start of trading on the Johannesburg Stock Exchange.
African Bank was the biggest gainer of the day as the company galloped to three-month highs, adding 11.31 percent at 12.20 rand.
“This was a stock that was down in the doldrums,” said Greg Davies, equity trader at Cratos Capital, suggesting that the share was seeing a short squeeze.
“We are perhaps seeing what is commonly known as a short squeeze. People who had sold the share at 11 rand thinking it was going to go lower are now having to buy the share back at around 12.15 rand and possibly higher,” he said.
Short-selling is a strategy where investors bet that a stock's price will fall.
An investor borrows a stock and sells it, aiming to buy it back at a lower price and pocket the difference as profit.
According to Reuters' data, the share's 14-day RSI, a momentum indicator watched by technical analysts, has risen into oversold territory above 70, and so it could be in for a correction.
After scaling a record peak earlier in the day, the benchmark Top-40 index shed 0.14 percent to 43,648.41 while the broader All-share index was little changed, edging up 0.01 percent at 48,647.62.
Advancers outpaced decliners 198 to 122, as 173 million shares changed hands, according to preliminary bourse data.
A database glitch had delayed the start of trading, the latest in a string of errors that have hampered Africa's biggest bourse in recent years.
Trade on the $900 billion exchange did not start until 10:00 SA time, rather than the usual opening time of 09:00 SA time.
The JSE said in a statement that the error was “related to a JSE database” and not the two-year-old Millennium Exchange trading platform that it had promised would put an end to its stability problems. - Reuters]]>
Gold prices were little changed, holding above a key technical support near $1,275 an ounce.]]> |||
New York/London - Gold prices were little changed on Wednesday, holding above a key technical support near $1,275 an ounce, though the metal is vulnerable to further losses as investor demand remains slack, analysts said.
The bullion market found some support after Commerce Department data showed sales of new US single-family homes tumbled to their lowest level in eight months in March, dealing a setback to the housing market recovery.
Gold traded in a less than $10 range, holding above its 100-day moving average of $1,277 an ounce, after the previous session's fall to a 2-1/2-month low near that level.
“We continue to watch gold between the $1,275 and $1,280 level where key support is still apparent. If taken out, we could see rather heavy stop-loss selling set in,” said Edward Meir, metals analyst at INTL FCStone.
Spot gold was up 0.1 percent at $1,283.70 an ounce by 11:25 a.m. EDT (17:25 SA time).
US gold futures for June delivery were up $1.80 an ounce at $1,282.40.
Physical demand in Asia, which tends to provide some support at lower price levels, failed to emerge after Tuesday's drop as buyers expect more price declines, dealers said.
Demand has been quiet in top buyer China as a weaker yuan made it more expensive to buy dollar-denominated gold.
China's yuan hit a 16-month low against the dollar on Wednesday.
Investment demand also remained weak with the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, seeing sharp outflows in recent days.
Last week alone, the fund's outflows totalled 9.3 tonnes, erasing all the gains made in the year.
Among other precious metals, silver was up 0.4 percent at $19.44 an ounce, while platinum rose 0.4 percent to $1,397.25 an ounce and palladium was up 0.5 percent at $784 an ounce. - Reuters]]>
Global equity markets edged lower after five days of gains after disappointing US housing data.]]> |||
New York - Global equity markets edged lower on Wednesday after five days of gains after disappointing US housing data and as corporate earnings were not strong enough to sustain a rally, while the price of government debt rose as investors favoured safety.
In Europe, rising worries over Ukraine also weighed, offsetting data that showed Germany continued to power the euro zone's recovery, though France's economy was still lagging in April.
Europe's private sector started the second quarter on its strongest footing in nearly three years, according to purchasing managers' index for the euro zone, although new orders were again mainly buoyed by price cuts.
But the pace of US growth slowed in April, even as factory activity continued to expand, and sales of new US single-family homes tumbled to their lowest level in eight months in March, dealing a setback to the housing market recovery.
Strong results from Boeing failed to inspire Wall Street investors to keep pushing equities higher.
The S&P 500 on Tuesday had marked a sixth straight session of gains.
“As (US) equities underperform, this leads to buying of Treasuries and yields fall. The dollar is softer as a result because it is reflecting other markets rather than internal components,” said Sebastian Galy, senior currency strategist at Societe Generale in New York.
The benchmark 10-year US Treasury note was last up 10/32 in price to yield 2.6896 percent.
MSCI's all-country world stock index, a measure of global stock portfolios, fell 0.13 percent.
In Europe, the FTSEurofirst 300 index of leading regional shares, was down 0.45 percent at 1,340.52.
The Dow Jones industrial average fell 5.86 points or 0.04 percent, to 16,508.51.
The S&P 500 lost 1.12 points, or 0.06 percent, to 1,878.43, and the Nasdaq Composite dropped 17.061 points, or 0.41 percent, to 4,144.397.
Corporate earnings were mixed, though companies have largely been beating reduced forecasts.
Shares in Ericsson, the Swedish mobile telecom equipment maker, fell 7.1 percent, trimming the most points off of the FTSEurofirst 300, after the company's first-quarter sales and profit came in below analysts' forecasts.
The results were hit by weak trading in North America.
Boeing Co reported first-quarter revenue that beat expectations and lifted its core earnings forecast to reflect a tax settlement gain, sending shares up 1.94 percent to $130.02.
But fellow Dow component AT&T Inc fell 3.1 percent to $35.17 a day after its results.
US Treasuries prices rose after the weak economic data spurred safe-haven bids and traders covered short positions against bonds following a recent sell-off.
“You cannot continue to attribute this weakness in the economy to the weather and that's why people were a little surprised,” said Stanley Sun, interest rate strategist at Nomura Securities International in New York.
The dollar slipped against the euro and yen.
Its value against a basket of currencies fell to its lowest level in a week.
The euro rose 0.16 percent to $1.3825.
Against the yen, the dollar fell 0.22 percent to 102.37 yen.
Brent oil fell after weekly data showed US crude inventories hit a record high, though prices found some support from the unfolding crisis in Ukraine.
US crude oil stocks jumped 3.5 million barrels to 397.6 million barrels last week, the US Energy Information Administration said.
Brent crude for June delivery reversed slight gains after the EIA data to trade 29 cents lower at $109.04 a barrel.
US crude for June delivery fell 9 cents to $101.666 a barrel. - Reuters]]>
US stocks edged lower as weakness in AT&T and biotech names inspired investors to take profits.]]> |||
New York - US stocks edged lower on Wednesday as weakness in AT&T and biotech names inspired investors to take profits following six straight days of gains, though a rally in Boeing limited losses.
AT&T Inc fell 3.4 percent to $35.07 a day after the Dow component reported adjusted earnings that beat expectations by a penny, though that was offset by weak service revenue growth.
Verizon Communications fell 1.1 percent to $47.41 while the S&P telecom sector dropped 1.8 percent, by far the worst-performing sector on the day.
Biotech shares fell a day after Amgen Inc reported earnings that were below forecasts.
The stock fell 6 percent to $112.16 and the Nasdaq biotech index lost 1.4 percent.
Biogen Idec Inc fell 1.8 percent to $300.73 despite a strong outlook.
Gilead Sciences Inc late Tuesday posted a sharp profit increase, sending shares up 2.9 percent to $74.95.
While the biotech results were mixed, they did point to some fundamental strength in the group, easing concerns it was overvalued.
“Earnings season has been better than expected, but revenue growth has been static, which is concerning because of its implications for margins,” said Michael Mullaney, who oversees about $11 billion as chief investment officer at Fiduciary Trust Co in Boston.
“If margins are going to stay at record levels, we'll need revenue acceleration. Otherwise we may not see upside surprises going forward.”
Boeing Co reported first-quarter revenue that beat expectations and lifted its core earnings forecast to reflect a tax settlement gain, sending shares up 2 percent to $130.15.
The Dow Jones industrial average was down 18.98 points, or 0.11 percent, at 16,495.39.
The Standard & Poor's 500 Index was down 1.89 points, or 0.10 percent, at 1,877.66.
The Nasdaq Composite Index was down 19.09 points, or 0.46 percent, at 4,142.37.
Better-than-expected corporate earnings have boosted Wall Street lately, though companies have largely been beating reduced forecasts.
According to Thomson Reuters data, profits are seen rising 1.6 percent this quarter, down from the 6.5 percent growth rate estimated at the start of the year.
With 28 percent of the S&P 500 having reported results, 65.2 percent have topped expectations, according to Thomson Reuters data, above the long-term average of 63 percent.
On the revenue side, 53.6 percent have exceeded forecasts, below the 61 percent long-term average.
Procter & Gamble Co's earnings topped analyst forecasts but revenues were flat and shares edged 0.8 percent lower to $79.93.
New home sales dropped 14.5 percent in March, tumbling more than expected to an eight-month low.
Housing stocks fell 1 percent, with D.R. Horton Inc off 2.3 percent to $21.33. - Reuters]]>
Maize futures in South Africa rose the most in more than a week after the benchmark price in Chicago climbed.]]> |||
Johannesburg - Corn futures in South Africa rose the most in more than a week after the benchmark price in Chicago climbed yesterday.
Yellow corn for delivery in July increased 0.6 percent to 2,193 rand ($207) a metric ton, the biggest advance since April 14, by the midday close on the South African Futures Exchange in Johannesburg.
White corn rose 0.1 percent to 2,087 rand a ton.
Corn for July delivery settled 1.7 percent higher yesterday at $5.02 a bushel on the Chicago Board of Trade on concern that cold, wet weather will delay planting in the US, the top grower.
The futures were little changed today.
“We are high due to the American price that closed higher yesterday,” Thys Grobbelaar, an analyst at Klerksdorp-based Senwes Ltd., said by phone today.
“They are behind schedule with their plantings.”
South Africa is the continent’s largest producer of corn.
Meal made from white corn is used to make a staple food known as pap, while the yellow variety is mainly fed to animals.
Wheat for delivery in May rose 0.1 percent to 3,900 rand a ton. - Bloomberg News]]>
Japanese shares rose, with the Topix index posting its first advance in three days.]]> |||
Tokyo - Japanese shares rose, with the Topix index posting its first advance in three days, after the Standard & Poor’s 500 Index capped its longest rally since September amid optimism about US earnings.
Resona Holdings gained 2.5 percent after Greenlight Capital, the $10.3 billion hedge fund run by David Einhorn, said it bought shares in the Japanese bank.
Seibu Holdings, operator of the nation’s biggest hotel chain, jumped 11 percent on its trading debut after pricing its public offering at the bottom of its planned range.
A gauge tracking energy explorers was the only one of the Topix’s 33 industry groups to fall after oil dropped the most in three months yesterday.
The Topix added 1 percent to 1,173.81 in Tokyo, its highest close since April 8.
More than three shares rose for each that fell.
The Nikkei 225 Stock Average increased 1.1 percent to 14,546.27.
The yen was little changed at 102.60 per dollar.
The S&P 500 gained for a sixth day yesterday.
“US earnings weren’t as bad as the market had feared and its economy is showing it’s on the road to recovery,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities.
“The yen at 102 per dollar means we can expect Japanese companies to increase profits as the average assumption of big manufacturers for the currency is 99.48.”
Futures on the S&P 500 were little changed.
The measure added 0.4 percent yesterday as health-care shares surged amid a $45.7 billion bid for Allergan and earnings from Netflix to Harley-Davidson topped estimates.
Japanese shares maintained gains after a private report on China’s manufacturing matched estimates.
The preliminary Purchasing Managers’ Index from HSBC and Markit Economics was at 48.3 in April, in line with the median prediction of 25 analysts surveyed by Bloomberg News.
While that was higher than the final March figure of 48, the reading below 50 signaled a fourth month of contraction in the sector.
“It’s slightly better month-on-month, which makes it a bit of a non-event,” said Andrew Sullivan, director of sales trading at Kim Eng Securities in Hong Kong.
“Stabilisation is probably the key phrase with these numbers.”
Resona advanced 2.5 percent to 493 yen.
Einhorn’s Greenlight said it bought the stock at 547 yen per share and described the Tokyo-based bank as “cheap on both an absolute and relative basis,” according to a letter sent to clients yesterday.
The shares traded at 0.83 times book value yesterday, down from 0.94 at the start of the year.
Seibu jumped 11 percent to 1,770 yen.
Seibu, which had disagreed with its biggest shareholder Cerberus Capital Management over the offering’s timing, had sold the shares at 30 percent less than an indicative price after two IPOs flopped in Japan last month.
The hotel operator stands to benefit from rising tourism to Japan and expectations that the 2020 Olympics in Tokyo will boost demand.
The Topix Mining Index sank 2.2 percent after West Texas Intermediate oil dropped yesterday.
WTI for May delivery, which expired yesterday, slid $2.24 to settle at $102.13 a barrel on the New York Mercantile Exchange, capping the biggest decline since January 2.
Inpex, which accounts for 88 percent of the subgroup, sank 2.5 percent to 1,456 yen.
Japan Drilling slipped 0.5 percent to 4,065 yen. - Bloomberg News]]>
China's yuan currency extended its downtrend against the dollar to hit a 16-month low.]]> |||
Shanghai - China's yuan currency extended its downtrend against the dollar Wednesday to hit a 16-month low, despite the country's central bank fixing its trading point for the unit at a higher level.
The unit fell to as low as 6.2458 to the dollar in the morning, its weakest level since December 2012.
That compared with Tuesday's close of 6.2370, according to the China Foreign Exchange Trade System.
However, the People's Bank of China had set the mid-point for trading at 6.1599, compared with 6.1610 on Tuesday.
The PBoC keeps a grip on the currency but allows it to move up or down two percent on either side of a daily-set point.
The yuan has fallen repeatedly in recent months, with many dealers believing the depreciation is a deliberate move by the central bank to target speculative funds betting on continued rises.
But traders have also blamed the slowing economy as a crucial factor.
However, a Shanghai-based local bank trader told Dow Jones Newswires: “This round of yuan falls are mainly driven by investors spontaneously purchasing dollars instead of the central bank's intervention, so we may see it slowly weakening towards 6.26 in the coming weeks.”
Policymakers have pledged to move gradually towards full convertibility of the yuan, allowing it to be freely bought and sold, and bringing with it the uncontrolled movement of funds in and out of China.
The unit, which is also known as the renminbi, has fallen more than three percent so far this year, erasing gains of the amount in 2013.
“The depreciation... since mid-February has to some extent defied market expectations for one-way appreciation, so now expectations towards the renminbi are divided,” said Jiang Shu, a foreign exchange analyst with Industrial Bank.
“Expectations towards the domestic economy will certainly affect renminbi prices, but the impact should not be overestimated,” he said.
China's economy grew 7.4 percent year on year in the first three months of 2014, down from 7.7 percent the previous quarter, with authorities blaming a slow global recovery and domestic structural reforms.
The US Treasury said earlier this month that the recent fall in the yuan could “raise particularly serious concerns” if it represents a reversal in China's pledge to move towards a more free-floating yuan.
However, it stopped short of branding China a currency “manipulator” in a twice-yearly report to the US Congress.
A weaker yuan makes Chinese exports cheaper overseas, at a time when Beijing is seeking ways to boost growth. - Sapa-AFP]]>
Asian shares crept higher on Wednesday following merger-driven gains in Europe and on Wall Street.]]> |||
Sydney - Asian shares crept higher on Wednesday following merger-driven gains in Europe and on Wall Street, though investors were wary in case coming figures on Chinese manufacturing again disappointed.
Japan's Nikkei put on 0.9 percent while Australia's main index edged up 0.2 percent. MSCI's broadest index of Asia-Pacific shares outside Japan added 0.15 percent.
The better mood owed much to Wall Street where the Dow rose 0.4 percent, while the S&P 500 gained 0.41 percent and the Nasdaq 0.97 percent.
The FTSEurofirst 300 index of top European shares jumped 1.34 percent on Tuesday.
In Asia, the focus will be on the flash HSBC manufacturing PMI for China in April, which offers one of the earliest glimpses of activity for the month. Analysts are hopeful the index will at least stabilise around the March level of 48.0.
On Tuesday, China's central bank said it will cut the amount of deposits rural banks must hold as reserves by between 0.5 and 2 percentage points, the latest in a series of measures to help combat a slowing economy.
“The impact of a selective RRR cut is still limited as it will only inject as much as RMB100 billion liquidity into the system,” noted analysts at ANZ.
“We would treat the move as a signal which reflects that the accommodative monetary policy stance will be maintained over the foreseeable future, given that the real economy is expected to remain lukewarm and inflation pressures are mild.”
Also of note in Asia will be data on Australian inflation, which could affect the outlook for interest rates.
Forecasts are that underlying inflation picked up to 2.9 percent in the first quarter and anything higher would add to the risk of a rate rise before year-end.
Australia already has high yields relative to its rich world peers which, combined with improving economic data, has been attracting offshore money into the local dollar. The Australian currency was holding firm at $0.9366 on Wednesday, having risen 0.4 percent overnight.
The US dollar was otherwise sidelined at 102.65 yen and $1.3804 per euro, having held to tight ranges for some days now.
In the United States and Europe all the talk was of mergers, this time in the pharmaceutical sector.
AstraZeneca climbed 4.7 percent after the Sunday Times newspaper reported that Pfizer approached its British rival with a 60 billion pound ($101 billion) takeover offer. Pfizer rose 1.2 percent to $31.23.
GlaxoSmithKline rose 5.2 percent after it agreed to sell its oncology products to Novartis for $14.5 billion. Novartis' shares added 2.3 percent.
In commodity markets, US crude futures fell ahead of data expected to show that US inventories have risen close to record highs. Brent also fell but was cushioned by continued concerns over the stand-off in Eastern Ukraine.
Brent crude was quoted 17 cents firmer at $109.44 a barrel, after reaching a six-week high of $110.36 last week. US crude added 11 cents to $101.86 a barrel.
Gold remained out of favour after touching its lowest in more than two months on Tuesday, weighed down by gains in Wall Street stocks and as outflows from physical gold funds pointed to weak investment appetite.
Early on Wednesday, spot gold was trading at $1,283.20 an ounce, just off a trough of $1,277.10. - Reuters]]>
American stocks rose on Tuesday as a host of solid earnings reports helped lift the S&P 500 and Nasdaq.]]> |||
New York - US stocks rose on Tuesday as a host of solid earnings reports, along with strength in the healthcare sector, helped lift the S&P 500 and Nasdaq to their sixth straight advance.
Netflix Inc surged 7 percent to $372.90 a day after reporting strong subscriber growth, a sign the trading favourite still had room to grow despite recent valuation concerns. With the day's gain, the stock moved to the plus side for the year after a 21 percent drop in March.
The S&P healthcare index, up 1 percent, was the best performer of the 10 major S&P sectors. Allergan jumped 15.2 percent to $163.65 a day after activist investor William Ackman teamed up with Canadian drugmaker Valeant Pharmaceuticals International to bid for the company. US-listed Valeant shares gained 7.5 percent to $135.41.
A deal between Novartis and GlaxoSmithKline, in which the two traded over $20 billion worth of assets in an effort to cope with healthcare spending cuts and generic competition, also bolstered the healthcare sector. US-listed shares of Novartis gained 1.3 percent to $86.56, while Glaxo rose 4.1 percent to $55.30.
Better-than-expected earnings have lifted stocks recently, though companies have largely been exceeding reduced forecasts. Profits are seen rising 1.1 percent this quarter, down from the 6.5 percent growth rate estimated at the start of the year.
“What was baked into the market, in spite of a market near an all-time high, was a sloppy earnings season,” said Mike Serio, regional chief investment officer of Wells Fargo Private Bank in Denver.
“We've had some really good beats at this point, we've had a couple of good announcements today, you throw on the M&A activity in the drug sector, at least in the short term, everybody looks pretty excited about this market.”
Dow components Travelers and United Technologies both beat expectations, and United Tech raised the low end of its full-year profit outlook. Shares of Travelers rose 0.6 percent to $86.89 while United Tech added 0.8 percent to end at $119.19.
McDonald's reported earnings that fell alongside a drop in US same-store sales, and its stock slipped 0.4 percent to $99.32.
With 20 percent of the S&P 500 having reported results through Tuesday morning, 63 percent have topped earnings expectations, according to Thomson Reuters data, matching the long-term average. On the revenue side, 51 percent have exceeded forecasts, below the 61 percent long-term average.
The Dow Jones industrial average rose 65.12 points or 0.40 percent, to end at 16,514.37. The S&P 500 gained 7.66 points or 0.41 percent, to 1,879.55. The Nasdaq Composite added 39.912 points or 0.97 percent, to 4,161.458.
After the close, Gilead Sciences advanced 1.1 percent to $73.65 after the drugmaker said its new $1 000 hepatitis C pill generated quarterly sales of $2.27 billion, helping the company's quarterly net profit nearly triple.
In another positive sign for equities, the Dow Jones Transportation Average, up 0.6 percent, closed at its first record high since April 2. The index got a boost from airlines such as United Continental Holdings, up 4.6 percent, and Alaska Air Group, up 1.3 percent, which rose on a 2 percent drop in oil prices.
Facebook shares rose 2.9 percent to $63.03, helping to lift the Nasdaq 100 and the S&P 500. Credit Suisse upgraded the social networking company's stock to “outperform” on higher expectations for its long-term average revenue per user.
Volume was light, with about 5.88 billion shares traded on US exchanges, below the 6.7 billion average so far this month, according to data from BATS Global Markets.
Advancing stocks outnumbered declining ones on the NYSE by 2,227 to 811, while on the Nasdaq, advancers beat decliners 1 900 to 727. - Reuters]]>