Asia: Mixed after upbeat Yellen testimony

01-Mar-2014 Intellasia | Business Times | Reuters | AFP | Bloomberg | AP | 8:25 AM Print This Post

Asian markets were mixed yesterday Friday February 28, 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.

HONG KONG: 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 rise today, after a single day of loss. Liquidity slid by nearly a half from yesterday.
The benchmark VN Index rose 1.69 points or 0.29% to 586.48. Volume increased by 47% to 119.4 million shares worth VND2.24 trillion.
Put-through trading contributed 3.07 million shares worth of VND188.3 billion.
The market breadth was negative with 137 gainers, 88 losers and 69 unchanged.
The VN30 increased 1.07 points or 0.16% to 663.81. Among 30 constituents, 13 gained, 16 fell, 1 stood still.
On the Hanoi Stock Exchange, the HNX increased 0.49 point or 0.59% to 83.12. Trading volume tumbled by 30% to 77.3 million shares worth VND732 billion
The breadth was positive with 141 gainers, 80 losers, 88 unchanged and the rest untraded.
The HNX30 gained 1.24 points or 0.75% to 166.08.

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: After two months of trading, the stock market is back where it started.

The Standard & Poor’s 500 index rose 4.3 percent in February, the biggest gain since October 2013, helped by strong corporate earnings and a Federal Reserve that seems to have Wall Street’s back at every turn. But the rise in February must be taken in the context that investors spent the month making up the ground they lost in January.

“February looked a lot like January, just moving in the opposite direction,” said Scott Clemons, chief investment strategist with Brown Brothers Harriman Wealth Management.

Investors are also now staring at a stock market, while numbers-wise is basically where it was on Jan. 1, that is a lot more defensive than it was two months ago.

Investor caution was also evident in the bond market, which has done reasonably well in the last two months. The yield on the benchmark U.S. 10-year Treasury note has fallen from 2.97 percent to 2.65 percent in the last two months as investors returned to the relative safety of government debt. The Barclays U.S. Aggregate bond index, which tracks a broad mix of corporate and government bonds, is up 1.6 percent this year.

February’s rise came in spite of several economic reports that showed the U.S. economy slowed in the previous month.

It started with the January jobs report, which showed employers only created 113,000 jobs that month. It was far fewer than economists had expected. Other economic reports told a similar story. Consumer confidence, manufacturing and the housing market all fell sharply in January.

Investors blamed the weather, and rightly so. Many companies, particularly retailers, said winter storms of the past two months dramatically impacted their business. Macy’s said that at one time in January, 30 percent of its stores were closed because of inclement weather.

Even with the economic concerns, investors were able to set aside the volatility of January for three reasons, market watchers said.

First, corporate earnings for the fourth quarter overall turned out to be pretty good. Earnings at companies in the S&P 500 index grew 8.5 percent over the same period last year, according to FactSet. Revenue growth also picked up, albeit slightly.

The Federal Reserve, once again, also came to the market’s side. Janet Yellen, who in February took over the role as chair of the Federal Reserve, reaffirmed that the central bank plans to keep its market-friendly, low interest rate policies in place for the foreseeable future.

Lastly, weather, by its very nature, is temporary.

Spring will come, at some point, and the winter storms that have kept businesses closed and consumers away from stores will fade, investors say. All that pent-up demand will help the economy recover some of the ground lost in January and February.

“I think 70 percent, 80 percent, of the weakness we saw in January and February was weather related and we will pick up strength in the spring thaw,” said Bob Doll, chief equity strategist at Nuveen Asset Management.

Investors will have less information to work with in March than they did in February.

Earnings season is basically over. Of the companies in the S&P 500 index, 484 have reported their results, as have all 30 members of the Dow, so investors won’t have any corporate earnings news to respond to.

In the absence of company news, investors would typically look to the steady stream of economic data to find direction. However the severe winter weather of last two months is likely to make the upcoming economic reports even more difficult to interpret.

“You’re going to be able to put on spin on any report: ‘well that better than it should have been’ or ‘well, it was the weather,’” Clemons said. “We’ll get more trustworthy numbers in April.”

On Friday, the S&P 500 rose 5.16 points, or 0.3 percent, to 1,859.45. It was the second all-time closing high for the S&P 500 in a row. The S&P 500 is now up 0.6 percent for the year.

The Dow Jones industrial average rose 49.06 points, or 0.3 percent, to 16,321.76. The Nasdaq composite lost 10.81 points, or 0.3 percent, to 4,308.12.

Benchmark Currency Rates

USD EUR JPY GBP CHF CAD AUD HKD

USD

1.3802 0.0098 1.6745 1.1361 0.9039 0.8924 0.1289

EUR

0.7246 0.0071 1.2131 0.8231 0.6549 0.6471 0.0934

JPY

101.8000 140.4900 170.4480 115.6490 92.0040 90.8800 13.1172

GBP

0.5972 0.8243 0.0059 0.6784 0.5397 0.5334 0.0770

CHF

0.8803 1.2149 0.0086 1.4734 0.7957 0.7860 0.1134

CAD

1.1064 1.5271 0.0109 1.8527 1.2576 0.9875 0.1426

AUD

1.1205 1.5462 0.0110 1.8761 1.2728 1.0126 0.1443

HKD

7.7602 10.7102 0.0762 12.9933 8.8160 7.0139 6.9287

Source: Bloomberg

 


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