South African stocks fell in line with lower global markets as uncertainty mounted about US monetary policy.]]> |||
Johannesburg - South African stocks fell on Thursday in line with lower global markets as uncertainty mounted about US monetary policy and after lacklustre euro zone data showed a slower-than-expected recovery in Europe.
Pulp and paper maker Sappi fell 5.37 percent to 40.69 rand after the company said its sales into Russia and Ukraine have been affected by political crisis in that region, but posted a return to profit in its third quarter.
Decliners included mining companies such as Impala Platinum and AngloGold Ashanti as gold fell to six-week lows and platinum lost almost 1 percent.
Overall, sentiment was driven by global flows and woes, market players said.
“It's all worries about whether the strength of any recovery in Europe seems to be dissipating fast,” said Greg Katzenellenbogen, a director at Sanlam Private Investments.
Implats shed 2.9 percent to 106.33 rand while AngloGold lost 2.3 percent to 183.05 rand.
The benchmark Top-40 index fell 0.79 percent to 46,222 while the broader All-Share index skid 0.72 percent to 51,396.
Sibanye Gold lost 0.24 percent to 25.44 rand after rising as much as 5 percent during trade after it announced a 50 cents per share dividend despite earnings being lower.
Trade was active with about 193 million shares changing hands, slightly above last year's average of 176 million.
Decliners outpaced advancers 182 to 128 while 51 shares remained unchanged. - Reuters]]>
South Africa's rand fell by over half a percent against the dollar, failing to gain momentum from a surprise narrowing of the country's trade deficit.]]> |||
Johannesburg - South Africa's rand fell by over half a percent against the dollar on Thursday, failing to gain momentum from a surprise narrowing of the country's trade deficit.
Domestic trade data showed the deficit had shrunk to 190 million rand ($18 million) in June from 7.44 billion rand in May, beating forecasts of a 6.3 billion rand shortfall by economists polled by Reuters.
The local unit shed 0.51 percent to 10.7135 per dollar by 16:56 SA time, falling from the previous session's close of 10.66 and touching two-week lows before pulling back slightly.
“The effect of trade data on the rand has been fickle to interpret because it has been out of place with consensus,” said Sean McCaltan, an economist at ETM Analytics.
“There hasn't been the reaction you would normally see to that kind of data, in fact it looks like we have reverted back to the US data regarding direction.”
The dollar hit session highs against most currencies after the Fed announced another $10 bln taper to its asset purchase program on Wednesday, while GDP numbers showed the world's largest economy to be growing at 4 percent.
Diminished capital in-flows are expected to hurt the local economy as global monetary conditions become less accommodative.
“The rand tends to out-perform in good times and under-perform in bad times. The dollar recovery could be a sore point,” McCaltan said.
Earlier, Statistics South Africa said producer price inflation for June had slowed to 8.1 percent from 8.7 percent in May.
Bonds were slightly weaker, with yields on both benchmark papers higher, by 1.5 basis points on the 2015 bond and 2 basis points on the 2026 paper. - Reuters]]>
US stocks slumped in a broad decline, with the Dow and S&P 500 turning negative for July.]]> |||
New York - US stocks slumped in a broad decline on Thursday, with the Dow and S&P 500 turning negative for July on concerns over the strength of overseas economies and ongoing tensions with Russia.
Weak US data contributed to the bearish tone as jobless claims rose more than expected in the latest week, and the Chicago Purchasing Managers Index unexpectedly fell in July to its lowest since June 2013.
All ten primary S&P 500 sectors were down on the day, with energy the biggest decliner with a drop of 0.9 percent.
About 82 percent of stocks traded on the New York Stock Exchange fell, while 74 percent of Nasdaq-listed shares were lower.
The CBOE Volatility index rose 8.3 percent to 14.44, well under its historical average of 20.
Portugal's Banco Espirito Santo slumped almost 40 percent to an all-time low as its hopes of raising capital without state aid suffered a major blow after massive losses.
In Russia, Moscow fought back over new US and EU sanctions that had been imposed over the conflict with Ukraine, announcing a ban on most fruit and vegetable imports from Poland.
Separately, Argentina defaulted for the second time in 12 years.
Investors had hoped for a midnight deal with holdout creditors in Argentina, but the plan fell through.
Even a short default will raise companies' borrowing costs, add to pressure on the peso, drain dwindling foreign reserves and fuel one of the world's highest inflation rates.
“Even though the default wasn't terribly unexpected, it creates a concern of systemic risk,” said James Dailey, portfolio manager of TEAM Asset Strategy Fund in Harrisburg, Pennsylvania.
“On top of that, we haven't had any real downside for a while, and anyone who tries to argue that the market isn't at the very upper end of its historical range is flawed.”
Argentinian stocks traded in the US were lower, including YPS SA, down 4.9 percent to $37.03 and Pampa Energy, down 8.8 percent to $10.32.
The Dow Jones industrial average fell 122.34 points or 0.72 percent, to 16,758.02, the S&P 500 lost 14.79 points or 0.75 percent, to 1,955.28 and the Nasdaq Composite dropped 38.81 points or 0.87 percent, to 4,424.09.
The losses erased the Dow's and S&P's monthly gains, with the Dow currently off 0.4 percent for July and the S&P off 0.2 percent.
The Nasdaq is up 0.4 percent and remains on track for its third straight positive month.
Dow component Exxon Mobil Corp posted second-quarter earnings that beat expectations, but shares fell 1.5 percent to $101.70.
Late Wednesday, Whole Foods Markets Inc cut its 2014 forecasts for a fourth time.
Shares were down 4.6 percent at $37.30.
Cigna reported second-quarter earnings that beat expectations while Time Warner Cable Inc posted a rise in both earnings and revenue.
Cigna fell 6.2 percent to $87.66 while Time Warner Cable fell 1.1 percent to $149.79. - Reuters]]>
Europe's FTSEurofirst 300 index of top shares slipped to a two-week low on Thursday, led lower by Adidas after the group warned about business in Russia, while Argentina's default also rattled investors.]]> |||
London/Paris - Europe's FTSEurofirst 300 index of top shares slipped to a two-week low on Thursday, led lower by Adidas after the group warned about business in Russia, while Argentina's default also rattled investors.
The broader market was dragged down by sharp declines in some individual stocks, with German sportswear company Adidas falling 13 percent and Portugal's Banco Espirito Santo sinking nearly 50 percent at one point to a record low after booking a 3.6 billion euro first-half loss.
BES, down 27 percent, pushed Portugal's benchmark PSI 20 index 2.4 percent lower to underperform the wider market, while Adidas dragged Germany's DAX 0.9 percent down after saying it will scale back plans to expand in Russia and overhaul its golf business.
Spanish stocks also came under pressure, with Madrid's IBEX dropping 1.7 percent, as traders cited worries over Spanish companies' exposure to Latin America after Argentina defaulted on its debt on Thursday.
At 13:14 SA time, the FTSEurofirst 300 was down 0.7 percent at 1,356.82 points after falling up to 1,353.67, the lowest since mid-July, with analysts saying the sell-off might continue on worries about further monetary tightening in the United States.
“The biggest worry is the uncertainty about the US monetary policy. The strong GDP data and an improving economic outlook have raised the risk of an early rate hike,” Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels, said.
“Tomorrow's US non-farm payrolls data may further cement the view that a rate rise could happen earlier than expected.”
Data showed on Wednesday the US economy rebounded sharply in the second quarter as consumers stepped up spending and businesses restocked, while Friday's data is likely to show US nonfarm payrolls rose by 233,000 in July, which would mark the sixth month with job growth above 200,000.
Overall on Thursday, corporate results from European blue-chips were relatively positive, with shares in Sanofi surging 3.6 percent after the French drugmaker raised its full-year profit forecast while Royal Dutch Shell gained 3 percent after reporting a 33 percent increase in quarterly earnings, beating analyst forecasts.
“Despite some decent earnings from a number of blue-chips, the market is stuck in a range, with many negative catalysts including Argentina's default at the forefront of investors' minds,” said Lionel Jardin, head of institutional sales at Assya Capital, in Paris.
About 40 percent of STOXX Europe 600 companies have reported results so far in the earnings season, of which 55 percent have met or beaten profit forecast, according to Thomson Reuters StarMine data.
On average, quarterly profits are up 7.1 percent year-over-year, data shows, but revenues are down 1.5 percent, fuelling concerns over the earnings trend. - Reuters]]>
Britain's top equity index fell as a drop at UK bank Lloyds hit financial stocks.]]> |||
London - Britain's top equity index fell on Thursday as a drop at UK bank Lloyds hit financial stocks, while concerns about the impact on Europe from tensions between Russia and Ukraine also kept traders on the back foot.
The blue-chip FTSE 100 index was down by 0.3 percent, or 16.79 points, at 6,756.65 points.
Shares in Lloyds, which had risen for the last seven sessions, fell 2.6 percent and weighed on other financial stocks, with the FTSE 350 Banking Index falling 1.2 percent.
Traders and analysts said that while Lloyds' overall interim results were good, with the part-nationalised bank reporting a 32 percent in first-half profits, some of the gloss had been taken off by a rise in bad debts.
“Lloyds' numbers were good but the bad debt charges are the only negative I can see in them,” said Securequity sales trader Jawaid Afsar.
The FTSE 100 hit a 2014 peak of 6,894.88 points in mid-May which marked its highest level since December 1999.
However, the index has failed to breach the 6,900 point mark so far this year.
Many traders expect the FTSE to hit a record high of 7,000 points later this year, but say the FTSE has to first breach the 6,900 point hurdle and its failure to do so has led some traders to book profits above the 6,800 point level.
“I wouldn't buy the FTSE here,” said Afsar.
Afsar added that concerns about the situation in Ukraine, where Western powers have stepped up sanctions against Russia, were also pegging back stock markets.
New sanctions against Russia were imposed after 298 people were killed when a Malaysian passenger plane was shot down on July 17 over eastern Ukraine, where Kiev forces are fighting pro-Russian separatists.
Atif Latif, director of trading at Guardian Stockbrokers, was more optimistic that better corporate profits would enable the FTSE to recover and rise from any pull-backs.
“We are pleased that the earnings will allow the market to push back higher from this level,” he said. - Reuters]]>
US stock index futures were sharply lower, after Argentina defaulted for the second time in 12 years.]]> |||
New York - US stock index futures were sharply lower on Thursday, after Argentina defaulted for the second time in 12 years, raising concerns the country's weakness could spread to the region.
* The drop in futures indicated one of the biggest daily declines for Wall Street since July 17, when the S&P 500 fell more than 1 percent after a Malaysian passenger jet was shot down in Ukraine, stoking concerns that that crisis would have a wider global reach.
A big market decline would mean that all three major US indexes may lose their gains for July, which had been set to be the sixth positive month for both the Dow and S&P 500.
* Investors had hoped for a midnight deal with holdout creditors in Argentina, but the plan fell through.
Even a short default will raise companies' borrowing costs, add to pressure on the peso, drain dwindling foreign reserves and fuel one of the world's highest inflation rates.
* S&P 500 e-mini futures fell 11.5 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.
Dow Jones industrial average e-mini futures fell 85 points and Nasdaq 100 e-mini futures lost 25.25 points.
* For July, the Dow is up 0.3 percent, the S&P is up 0.5 percent and the Nasdaq is up 1.2 percent.
If the Nasdaq ends higher for July, it would be its third straight positive month.
* Despite the weakness implied by futures, conditions in the US continued to support equities, which are near record levels.
On Wednesday, the Federal Reserve gave a rosier assessment of the US economy while reaffirming it was in no hurry to raise interest rates.
* Earnings have also been strong, with more companies than usual beating expectations for earnings and revenue this quarter, though there were some notable disappointments.
Late Wednesday, Whole Foods Markets Inc cut its 2014 forecasts for a fourth time, sending shares down 5.3 percent to $37.03 (R396) in premarket trading.
* Cigna reported second-quarter earnings that beat expectations while Time Warner Cable posted a rise in both earnings and revenue.
* Akamai Technologies declined 5.9 percent to $57.17 in light premarket trading, a day after it fell short of investor hopes it would exceed its own revenue forecast due to heavy World Cup traffic.
* Investors anticipated weekly jobless claims data, seen rising to 301,000 from 284,000 in the previous week.
That comes ahead of the closely watched payrolls report due out Friday, which is expected to show fewer jobs created in July than June. - Reuters]]>
Hong Kong shares posted their best monthly performance since 2012, though gains for the day were capped.]]> |||
Hong Kong - Hong Kong shares posted their best monthly performance since 2012 on Thursday, though gains for the day were capped by weakness in a few Chinese heavyweight companies.
The Hang Seng Index closed up 0.1 percent at 24,756.85 points, its eighth straight winning session.
The China Enterprises Index of the leading offshore Chinese listings in Hong Kong also edged up 0.1 percent.
Both indexes posted their third monthly gain in a row, with the benchmark index up 6.8 percent and the HSCE 7.7 percent.
July was the best month for the Hang Seng since September 2012 and for the H-share index since January 2012.
Hong Kong-listed Chinese property developers led gains.
The sector has rallied strongly in recent weeks on expectations that more local governments in China will relax restrictions on home purchases in a bid to avert a sharper correction in the cooling property market.
China Resources Land climbed 3.6 percent after Barclays upgraded the developer to “overweight” from “equalweight”.
China Overseas Land & Investment surged 4.6 percent.
In a research note on Thursday, Barclays said they “believe the sector rally has further to go,” but “expect only the quality developers to continue to outperform, as they gain market share.”
The biggest drag on both indexes was PetroChina, which sank 2.5 percent, sliding further from a more than 16-month high last week. - Reuters]]>
South Africa's rand traded softer than its previous close against the US dollar and could weaken further.]]> |||
Johannesburg - South Africa's rand traded softer than its previous close against the dollar on Thursday and could weaken further if the latest trade data shows a wider-than-expected deficit for June.
The rand was at 10.6880 per dollar by 08:42 SA time, down 0.26 percent from where it ended the New York session on Wednesday.
Government bonds were also a shade weaker, with yields for the heavily-traded 2026 and 2015 issues each nudging 1 basis point higher to 8.30 percent and 6.705 percent respectively.
The rand fell to a 1-1/2 week low of 10.7190 on Wednesday, after US GDP data beat market forecasts and the Federal Reserve issued a hawkish statement, reducing appetite for high yielding but riskier emerging currencies.
“What these moves have created as far as the rand is concerned is an environment where there could be a lot at stake over the next few trading sessions,” Standard Bank trader Warrick Butler said.
The rand would find resistance at the 10.6200 and 10.5750 levels and support at 10.7170 and 10.7700, he said.
On the domestic front, trade numbers at 14:00 SA time will give the market a steer on the state of the economy, and whether there is scope for the Reserve Bank to increase rates further this year.
“While the median forecast is for a slight improvement of the trade deficit, a significant deviation will be rand negative as it suggests the economy continues to struggle to contain its current account deficit,” RMB analyst Mamello Matikinca said. - Reuters]]>
Oil prices tumbled further in Asia on Thursday as concerns eased that fresh Western sanctions on Russia over Ukraine would have an immediate impact on global oil supplies.]]> |||
Oil prices tumbled further in Asia on Thursday as concerns eased that fresh Western sanctions on Russia over Ukraine would have an immediate impact on global oil supplies, analysts said.
The US benchmark, West Texas Intermediate (WTI) for September delivery, slipped 66 cents to $99.61 while Brent crude for September was down 29 cents at $106.22 in mid-morning trade.
WTI fell 70 cents in New York trade and Brent lost $1.21 in London on Wednesday despite upbeat US stockpiles and economic growth data.
“As Russia has yet to respond to the (new) US and European Union sanctions with actions that could impact oil supplies, fears of disruption in crude stocks abated and helped to ease benchmark prices,” said Sanjeev Gupta, head of the Asia-Pacific oil and gas practice at consultancy EY.
Washington and Brussels announced on Tuesday the strongest sanctions against Russia since the Cold War over Moscow's annexation of Crimea and support for Ukraine separatists who are accused of shooting down a Malaysian passenger jet this month.
Rosneft, Russia's state-held oil giant, is one of the targets of the sanctions, with a tightening of western exports of technology needed to explore and extract energy from remote Russian regions.
The firm said last week it is working on plans to minimising the impact of the sanctions.
The oil market mostly shrugged off better-than-expected official US gross domestic product and stockpiles data.
The US economy grew a forecast-beating 4.0 percent in the second quarter, rebounding from a 2.1 percent slump in the first three months linked to severe winter weather, the Commerce Department reported.
The Department of Energy said crude-oil stockpiles fell 3.7 million barrels to 367.4 million in the week ended July 25, more than double what was expected.
Gupta said major declines in oil prices are not expected as “conflicts in Libya, Ukraine, Iraq and Israel continue to pose a risk of disruption in the supply of crude”. - Sapa-AFP]]>
The S&P 500 and Nasdaq ended higher on Wednesday after the Federal Reserve gave a rosier assessment of the US economy.]]> |||
New York - The S&P 500 and Nasdaq ended higher on Wednesday after the Federal Reserve gave a rosier assessment of the US economy while reaffirming that it is in no hurry to raise interest rates.
The US central bank also, as expected, reduced its monthly asset purchases to $25 billion from $35 billion.
Among the biggest positives were bank shares, with the S&P financial index up 0.4 percent, helping to support the S&P 500. Shares of Wells Fargo gained 1.1 percent to $52.10.
“We got the taper as expected, and the real viewpoint of the committee is they can keep monetary policy accommodative even after we reach our inflation and employment goals,” said Art Hogan, chief market strategist at Wunderlich Securities in New York.
Biotechnology stocks boosted the Nasdaq for a second straight day. The Nasdaq biotech index was up 1 percent after Amgen posted better-than-expected earnings and raised its outlook, sending its shares up 5.4 percent to $130.01.
The Dow Jones industrial average fell 31.75 points, or 0.19 percent, to 16,880.36, the S&P 500 gained 0.12 points, or 0.01 percent, to 1,970.07, and the Nasdaq Composite added 20.20 points, or 0.45 percent, to 4,462.90.
The S&P 500 had traded lower ahead of the Fed announcement.
Earlier on Wednesday, government data showed gross domestic product grew at a 4 percent annualised rate in the second quarter, above the 3 percent rate that had been expected and a sharp reversal from the weather-impacted first quarter, when the economy contracted a revised 2.1 percent.
Separately, the ADP National Employment Report showed companies hired 218 000 workers in July, below analysts' projections of 230 000 and less than June's total.
Among other big gainers, Twitter surged 20 percent to $46.30, its biggest ever one-day advance, after reporting that monthly active users rose a better-than-expected 24 percent in the second quarter.
Insurance stocks fell after Humana, WellPoint and Aflac Inc all reported lower earnings, though WellPoint's profit was above expectations.
Humana fell 5.6 percent to $120.34, WellPoint lost 0.1 percent to $112.47, and Aflac slid 2.8 percent to $61.38. UnitedHealth lost 1.6 percent to $82.95 and was the biggest drag on the Dow.
After the bell, shares of Whole Foods Markets fell 5.4 percent to $36.99 after the company cut its 2014 forecasts for a fourth time. Akamai Technologies declined 5.9 percent to $57.17 following its results.
About 6.2 billion shares changed hands on US exchanges, above the 5.6 billion average for the month to date, according to data from BATS Global Markets. - Reuters]]>