Asia: Mixed after upbeat Yellen testimony

04-Mar-2014 Intellasia | Business Times | Reuters | AFP | Bloomberg | AP | 8:17 AM Print This Post

Asian markets were mixed yesterday Monday March 03, 2014 after US Federal Reserve chief Janet Yellen provided an upbeat view of the United States economy and hinted the bank could ease up on its stimulus taper if the growth outlook weakens.
The comments provided the platform for a record close on Wall Street, while forex traders sold the dollar on the possibility that the bank’s bond-buying could continue for longer.
Tokyo lost 0.55 per cent to end at 14,841.07 owing to the stronger yen, while Sydney was off 0.12 per cent at 5,404.8 points. Seoul was flat, nudging up 1.56 points to 1,979.99 points, while Shanghai rose 0.44 per cent to 2,056.30.
Taipei was closed for a public holiday.
Yellen told the Senate Banking Committee that central bank policymakers thought severe weather across much of the country was to blame for a disappointing run of economic data over the past two months, including on jobs, industrial output and consumption.
Analysts said her hint that the taper could be flexible, and her stronger statement that unemployment remains a big problem, suggests less of a determination to push ahead with policy tightening than was evident a few months ago.

HONGKONG: SHARES edged up for a third straight session yesterday following a cautiously optimistic view of the US economy from the head of the Federal Reserve.
The benchmark Hang Seng Index rose 0.04 per cent to end at 22,836.96 on turnover of HK$76.97 billion.
HSBC added 0.43 per cent to HK$82.25 and Henderson Land Development was up 0.69 per cent at HK$43.50, while Cheung Kong Holdings advanced 0.91 per cent to HK$121.60.
Meanwhile, CNOOC lost 0.31 per cent to HK$12.72 and China Mobile fell 0.27 per cent to HK$73.75.

SINGAPORE: THE Straits Times Index (STI) ended 14.04 points, or 0.45 per cent, higher to 3110.78 yesterday.
The FTSE ST Mid Cap Index gained 0.06 per cent while the FTSE ST Small Cap Index added 0.11 per cent. Of the active stocks, SingTel shed 1.37 per cent, DBS advanced 0.73 per cent, UOB fell 0.34 per cent , OCBC declined 0.21 per cent and GLP appreciated 0.36 per cent.
The outperforming sector, FTSE ST Industrials went up 2.19 per cent. Of its two biggest stocks, Jardine Strategic Holdings jumped 3.99 per cent and Jardine Matheson Holdings rose 5.06 per cent.

KUALA LUMPUR: SHARE prices on Bursa Malaysia ended mixed yesterday on lack of buying support ahead of the weekend.
The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) rose four points to close at 1,835.66, after moving between 1,825.82 and 1,836.14 throughout the day.
Market breadth was negative with losers leading gainers by 582 to 268, with 305 counters unchanged, 475 untraded and 30 others suspended.
Volume rose to 2.45 billion shares worth RM2.68 billion, from 2.38 billion shares worth RM2.09 billion on Thursday.
On the scoreboard, the Finance Index earned 115.19 points to 16,606.12 while the Industrial Index decreased 9.54 points to 3,129.13 and the Plantation Index fell 50.55 points to 8,759.13.
The FBM Emas Index added 20.89 points to 12,669.52, the FBMT100 Index gained 30.78 points to 12,355.76, the FBM 70 earned 49.57 points to 13,833.71 but the FBM ACE fell 145.15 points to 6,443.87.
Among actives, Asia Bioenergy fell two sen to 11.5 sen, PDZ Holdings rose half-a-sen to 12.5 sen and Astral Supreme was flat at 22 sen.
Of the heavyweights, Maybank rose eight sen to RM9.78, Tenaga Nasional added four sen to RM12 and CIMB improved six sen to RM7.16.
Meanwhile, the FBM KLCI futures contracts on Bursa Malaysia Derivatives closed lower yesterday despite the rebound in the underlying cash market that followed overnight gains in US markets.
June 2014 and September 2014 decreased two points each to 1,830 and 1,826, respectively.
Turnover fell to 11,366 lots from Thursday’s 12,144 lots while open interest decreased to 45,614 contracts from 47,641 contracts yesterday.

In other markets:
* Manila closed 1.11 per cent higher, adding 70.20 points, to 6,424.99. JG Summit gained 1.63 per cent to 46.90 pesos while Ayala Land rose 4.45 per cent to 30.50 pesos.
* Wellington rose 0.52 per cent, or 25.70 points, to 4,990.04. Air New Zealand was up 0.6 per cent at NZ$1.775 and Metlifecare fell 0.2 per cent to NZ$4.14, while Fletcher Building slipped 0.53 per cent to NZ$9.42.6
* Mumbai rose 0.63 per cent to end at 21,120.12 points. Jaiprakash Power Ventures gained 12.26 per cent or 1.81 rupees to 16.57 rupees a share and Piramal Enterprises rose 7.26 per cent to 555.00 rupees a share.
* Bangkok added 0.55 per cent to 1,325.33. Siam Cement gained 2.38 per cent to 430 baht, while oil company PTT rose 2.09 per cent to 293 baht.
* Jakarta ended up 1.12 percent, or 51.28 points, at 4,620.22. Car company Astra International appreciated 3.73 per cent to 6,950 rupiah, while palm oil firm Wilmar Cahaya Indonesia fell 3.01 per cent to 1,290 rupiah.

VIETNAM: Vietnamese stocks rebounded to loss today after a single day of gain last Friday as retail investors sold stocks for quick profit.
The benchmark VN Index tumbled by 13.1 points or 2.23% to 573.38. Volume increased by 20% to 143.3 million shares worth VND2.32 trillion.
Put-through trading contributed 1.33 million shares worth of VND46.5 billion.
The VN30 slid by 19.86 points or 2.99% to 643.95. Among 30 constituents, 2 gained, 25 fell, 3 stood still.
On the Hanoi Stock Exchange, the HNX lost 2.66 points or 3.2% to 80.46. Trading volume was up by 23% to 95.4 million shares worth VND889 billion
The breadth was negative with 59 gainers, 201 losers, 45 unchanged and the rest untraded.
The HNX30 dropped 6.83 points or 4.11% to 159.26.

EUROPE: European shares dipped yesterdayon Friday as eurozone inflation data came in above expectations, which investors said could lessen the prospect of new monetary stimulus measures from the European Central Bank.
The pan-European FTSEurofirst 300, which had been in positive territory before the publication of the data, fell 0.2 per cent to 1,342.49 points.
London’s benchmark FTSE 100 stocks index fell 0.13  per cent to stand at 6,801.10 points in midday deals. Frankfurt’s DAX 30 shed  0.10 percent to 9,579.36 points and Paris’ CAC 40 dipped 0.52 percent to  4,373.63.
“European markets are still in a consolidation pattern as optimism over the  an accelerating global economy is currently being neutralised by uncertainty  coming out of the Ukraine,” said trader Markus Huber at   Peregrine & Black.

AMERICA: Russia’s military advance into Ukraine rattled global markets Monday.

U.S. stocks fell the most in a month and the price of crude oil rose sharply as traders feared Russian exports could be affected by sanctions. Gold and bond prices rose as investors sought safety.

The Standard & Poor’s 500 index had its biggest drop since Feb. 3, following markets in Europe and Asia lower, as Russia’s military tightened its grip on the Crimea region of Ukraine.

It was the second time this year the U.S. stock market has been roiled by developments in emerging markets. Stocks slipped in January as investors worried about slowing growth in China and other emerging economies. Now a showdown in Ukraine has grabbed investors’ attention and stoked fears of a tit-for-tat campaign of economic sanctions between Russia and Western powers.

“Financial markets are doing exactly would you would expect them to,” said Phil Orlando, chief equity market strategist at Federated Investors. “You have no idea what is going to happen and how this is going to play out.”

The S&P 500 index fell 13.72 points, or 0.7 percent, to 1,845.73, the biggest drop since Feb. 3. The index was down as much as 25 points at one point before recouping some of the ground it lost

The Dow Jones industrial average dropped 153.68 points, or 0.9 percent, to 16,168.03. The Nasdaq composite fell 30.82 points, or 0.7 percent, to 4,277.30.

European markets fell even more. Germany’s DAX sank 3.4 percent and Russia’s benchmark stock index plunged 12 percent.

“Europe gets a lot of energy supplies from Russia,” said David Kelly, chief global strategist at JPMorgan funds. “So, Europe would be a lot more directly affected by a trade war with Russia than the United States would.”

The price of gold rose $28.70, or 2.2 percent, to $1,350.30 an ounce, its biggest gain of the year. The yield on the 10-year Treasury note, which moves inversely to its price, fell to 2.60 percent from 2.64 percent on Friday.

The price of crude following warnings by Washington and other governments that Russia, a major oil exporter, might face sanctions after it seized control of Ukraine’s Crimean Peninsula. Russia was the world’s second-largest producer of oil in 2012, accounting for 12.6 percent of global supplies, according to the International Energy Agency.

The prices of crude oil climbed $2.33, or 2.3 percent, to $104.92 a barrel, its highest price of the year.

Russian stocks that trade in the U.S. were also hit hard. Mechel, a mining company, fell 18 cents, or 9.5 percent, to $1.72; Phone company VimpelCom fell 51 cents, or 5 percent, to $9.65. Energy company LukOil fell $3.20, or 5.9 percent, to $51.20.

The drop in stocks might also present investors with the opportunity to buy stocks at lower prices, said Terry Sandven, chief equity strategist for U.S. Bank.

“Clearly geopolitical risks are elevated, but it’s too early to tell about the longer-term implications,” Sandven said. “It’s still a buy-on-the-dip equity market and the fundamental backdrop is still favorable for equities to trade higher.”

The developments in the Ukraine also overshadowed some encouraging developments on the U.S. economy.

Manufacturing in the U.S. expanded at a faster pace in February as new orders and businesses boosted their stockpiles. The Institute for Supply Management, a group of purchasing managers, said Monday that its manufacturing index rose to 53.2 in February from 51.3 in January. Any reading above 50 signals growth.

Americans also spent more in January, but the increase came from a surge in spending on heating bills during the harsh winter. Spending in areas such as autos and clothing declined. Spending rose 0.4 percent in January after a 0.1 percent gain in December, the Commerce Department said Monday. The December figure was revised down from a 0.4 percent increase.

Among other stocks making big moves on Monday:

— Lorillard, the maker of Newport cigarettes, rose $4.55, or 9.3 percent, to $53.61 after the Financial Times reported that rival RJ Reynolds, the maker of Lucky Strike and Camel cigarettes, was considering making a bid for the company.

— Darden Restaurants, the parent company of Olive Garden, slumped $2.73, or 5.3 percent, to $48.33 after the restaurant operator said that exceptionally rough winter weather reduced earnings in its latest quarter by about 7 cents per share. Expenses related to the company’s plan to split off its Red Lobster chain also hurt earnings.

Benchmark Currency Rates

USD EUR JPY GBP CHF CAD AUD HKD

USD

1.3732 0.0098 1.6659 1.1317 0.9026 0.8953 0.1289

EUR

0.7282 0.0072 1.2132 0.8242 0.6574 0.6520 0.0938

JPY

101.5500 139.4400 169.1730 114.9210 91.6570 90.9190 13.0844

GBP

0.6003 0.8242 0.0059 0.6793 0.5418 0.5374 0.0773

CHF

0.8837 1.2133 0.0087 1.4719 0.7976 0.7911 0.1139

CAD

1.1076 1.5212 0.0109 1.8456 1.2538 0.9918 0.1428

AUD

1.1170 1.5338 0.0110 1.8605 1.2641 1.0082 0.1439

HKD

7.7605 10.6556 0.0764 12.9283 8.7833 7.0051 6.9475

Source: Bloomberg

 


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