Asia: Mostly lower after MH17 crash news

19-Jul-2014 Intellasia | Business Times | Reuters | AFP | Bloomberg | AP | 7:29 AM Print This Post

Asian markets were mostly lower yesterday Friday July 18 after a Malaysia Airlines (MAS) jet came down in battle-wracked Ukraine, sparking geopolitical tensions and sending Wall Street tumbling as the US claimed the aircraft had been shot down.

Airline stocks retreated, led by a slump in already under-pressure MAS as the company faced up to its second major disaster in four months following Thursday’s tragedy that killed almost 300 people.

Tokyo fell one per cent, or 154.55 points, to 15,215.71, Seoul eased 0.07 per cent or 1.48 points to 2,019.42, while Sydney ended slightly higher, adding 0.17 per cent to close at 5,531.6 while Shanghai gained 0.17 per cent, or 3.48 points, to 2,059.07.

Regional markets ended broadly lower but made back some ground from early lows. MAS’ Flight MH17 was carrying 298 people from Amsterdam to Kuala Lumpur when it crashed in eastern Ukraine. US vice-president Joe Biden said the jet had been apparently “blown out of the sky”, while officials said it had been hit by a surface-to-air missile.

Shares in MAS fell by as much as 17.8 per cent on the news, which comes months after Flight MH370 went missing with hundreds on board in a remote part of the Indian Ocean. In afternoon trade shares were 11 per cent lower.

Combined with the airline’s perennial losses, the MH370 debacle has pummelled its shares this year — it has lost more than a third of its value since January 1 — and sparked speculation over whether it may be sold off or restructured.

Yesterday’s selloff also affected other airlines, with Japan’s JAL losing 0.7 per cent and ANA slipping 0.8 per cent. Hong Kong’s Cathay Pacific lost 0.7 per cent in the afternoon. Air New Zealand shed 2.5 per cent.

HONGKONG: STOCKS closed down 0.28 per cent yesterday as traders were spooked by news that a Malaysia Airlines plane had crashed in Ukraine, with the United States saying it was shot down.
The benchmark Hang Seng Index lost 66.08 points to 23,454.7 on turnover of HK$48.72 billion.
Cathay Pacific Airways fell 0.55 per cent to HK$14.40 and HSBC shed 0.56 per cent to HK$79.35.
In the meantime, Ping An Insurance of China slipped 0.59 per cent to end the day’s trade at HK$58.60 and China Mobile declined 0.31 per cent to close at HK$81.60.

SINGAPORE: THE Straits Times Index (STI) ended 3.64 points, or 0.11 per cent, higher to 3,310.53 points yesterday.
The FTSE ST Mid Cap Index rose 0.11 per cent while the FTSE ST Small Cap Index fell 0.27 per cent.
Of the actives, CapitaCommercial Trust added 2.70 per cent, DBS grew 0.58 per cent, SingTel lost 0.76 per cent, JMH 400 USD shed 0.60 per cent and Ezion lost 0.48 per cent.
The outperforming sector, FTSE ST Technology Index gained 1.09 per cent. Of its biggest stocks, Silverlake Axis advanced 0.44 per cent and STATS ChipPAC went up 3.33 per cent.

KUALA LUMPUR: SHARE prices on Bursa Malaysia ended lower yesterday on continuous selling activities in key blue chips and heavyweights.
The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) fell 10.17 points to close at 1,872.97, after moving between 1,871.4 and 1,877.34 throughout the day.
Losers trounced gainers by 550 to 303, with 307 counters unchanged, 479 untraded and 37 others suspended. Total volume fell to 2.38 billion units valued at RM2.18 billion from 2.12 billion units valued at RM2.21 billion.
“Markets reacted negatively to the crash of MAS flight MH17 over Ukraine yesterday, but this was not the sole reason,” said Maybank IB regional chartist Lee Cheng Hooi
The Finance Index dropped 107.17 points to 17,451.85, the Plantation Index slid 33.04 points to 9,012.83 and the Industrial Index declined 26.48 points to 3,239.03. The FBM Emas Index eased 75.81 points to 13,062.74, the FBMT100 Index fell 77.42 points to 12,653.36, the FBM ACE Index slipped 26.8 points to 6,851.83 and the FBM 70 Index lost 121.27 points to 14,345.72.
Among the actives, Sumatec Resources added half-a-sen to 42.5 sen, Talam Resources was flat at 11.5 sen and Malaysia Airlines fell 2.5 sen to 20 sen. Heavyweights Maxis was flat at RM6.76 and Maybank declined nine sen to RM9.91.
Meanwhile, FBM KLCI futures contracts on Bursa Malaysia Derivatives closed lower, in line with the cash market.
Spot month July 2014 and the August 2014 contract slipped 7.5 points each to 1,873 and 1,873.5, respectively. September 2014 declined nine points to 1,870 and December 2014 fell 11 points to 1,869.
Turnover rose to 8,438 lots from 4,212 on Thursday, while open interest increased to 38,125 contracts from 33,909 previously.

In other markets:

Taipei was marginally lower, losing 7.27 points to 9,400.97.

Taiwan Semiconductor Manufacturing Co fell 0.8 per cent to T$123.5 while smartphone maker HTC rose 2.94 per cent to TX$140.0.

Wellington edged down 3.46 points to 5,108.90.

Manila closed 0.21 per cent lower, giving up 14.29 points to 6,853.07.

Philippine Long Distance Telephone eased 0.07 per cent to 3,028.00 pesos, SM Investments fell 1.09 per cent to 774.00 pesos and SM Prime Holdings ended 1.63 per cent down at 15.74 pesos.

VIETNAM: Vietnamese stocks rose for the fifth day in a row today on high liquidity as investors continued to show confidence on the local market, FPT surged to the ceiling level of the talk that Apple might acquire it.
The benchmark VN Index added 5.89 points or 1% to 596.26. Volume rose 50% to 144.4 million shares worth of VND2.526 trillion. Put-through trading contributed 23.8 million shares worth of VND462.17 billion.
We saw 11.4 million MBB shares changed hands at the ceiling price and 2 million VIC shares changed hands at the reference price.
The market breadth was positive with 103 gainers, 98 losers and 78 unchanged.
The VN30 rose 9.22 points or 1.45% to 645.52. Among 30 constituents 17 gained, 5 fell and 8 stood still.
On the Hanoi Stock Exchange, The HNX-Index, the measure of 360 stocks, rose 0.3 point, or 0.37%, to end at 81.14, the highest since April 18. It jumped 3.2% this week.
The HNX 30 Index – the tracker of top 30 stocks calculated based on free float adjusted market capitalization – climbed 0.87 points, or 0.53%, to end at 165.58.

EUROPE: European shares fell yesterday as the shooting down of a passenger plane over Ukraine stoked tensions between Russia and the West and sapped appetite for assets which depend on economic growth.
“People in the market are still worried that there will be an escalation in the conflict (following the plane crash),” said Markus Huber, senior sales trader at Peregrine & Black. “But it’s so serious that maybe people will pull back from the conflict now.”
London’s benchmark FTSE 100 ended the day off by 0.68 per cent at 6,738.32 points, Frankfurt’s DAX 30 index shed 1.07 per cent to 9,753.88 and Paris’ CAC 40 was off by 1.21 per cent to close at 4,316.12.
Milan’s stock index plunged by 2.22 per cent, and its peer in Madrid gave up 1.17 per cent.
Broad-based falls saw all but one sector on the STOXX Europe 600 in negative territory, although declines were modest at between 0.1 per cent and 1.1 per cent.

AMERICA: Investors jumped on a wave of strong corporate financial results Friday, propelling stocks higher for the third time in five days.

The gains wiped out much of the market’s losses from the day before, when the downing of a Malaysian Airlines passenger jet in eastern Ukraine stirred concerns that tensions between Russia and the West could escalate. Israel’s launch of a ground offensive into Gaza also stoked geopolitical uncertainty.

Those worries appeared to ease Friday, as world leaders called for an immediate cease-fire in the region and international attention turned toward the task of determining what led to the aircraft being shot down. Investors turned their attention to the latest encouraging company earnings.

“Typically when these events hit the news, it’s kind of a sell-now, ask-questions-later moment, and then there is a reassessment, and that’s exactly what we had,” said Quincy Krosby, market strategist at Prudential Financial. “Today, the market focused again on earnings, which for the most part were good, surprising to the upside, and the markets just basically got back to their normal business.”

Signs of a rebound appeared early. The major stock indexes edged higher in premarket trading and demand for bonds waned, sending the yield on the 10-year Treasury note lower. Gold and oil prices also declined.

Strong earnings from several companies kept the market in positive territory after it opened. Investors drove up shares in Google, Honeywell International, furniture company Knoll and Huntington Banchsares, among others.

The Conference Board’s latest index of leading indicators, designed to predict the economy’s trajectory, stoked the market further. The index climbed in June for the fifth consecutive month. At the same time, investors brushed off a preliminary report showing consumer confidence dipped slightly.

The market built steadily on its gains throughout the day, reversing nearly all of the prior day’s losses and putting all three major U.S. indexes into the green for the week.

The Standard & Poor’s 500 index added 20.10 points, or 1 percent, to 1,978.22. The Dow rose 123.37 points, or 0.7 percent, to 17,100.18. The Nasdaq composite gained 68.70 points, or 1.6 percent, to 4,432.15.

The three major indexes remain ahead for the year.

Bond prices fell. The yield on the 10-year Treasury note rose to 2.48 percent from 2.45 percent late Thursday.

All 10 sectors in the S&P 500 rose, led by health care. The sector is up 10.6 percent this year.

Gilead Sciences notched the biggest gain among the 500 companies in the index, rising $4.12 or 4.8 percent, to $89.19. NVIDIA fell the most, shedding 86 cents, or 4.5 percent, to $18.44.

Investors largely looked through the brewing geopolitical hot spots this week in part because company earnings have been favorable, said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management.

“Clearly the equity market remains remarkably resilient,” he said. “Despite heightened political issues on the horizon the path of least resistance for equities is still up.”

Generally, early results this earnings season have been in line with investors’ expectations, and in some cases, much better, noted Lawrence Creatura, portfolio manager at Federated Investors.

Late Thursday, Google reported higher earnings and revenue, even as advertising rates continued to drop. Its stock added $24.29, or 4.2 percent, to $605.11.

Honeywell International gained $1.65, or 1.7 percent, to $96.82 after reporting that its income rose sharply in the latest quarter and beat investors’ forecasts.

Furniture and accessories company Knoll and semiconductor Skyworks Solutions also got a lift from quarterly results that exceeded Wall Street’s expectations. Knoll jumped $1.18, or 7 percent, to $18.15, while Skyworks rose $6.53, or 14.1 percent, to $52.87.

Banks have mostly reported strong second-quarter results, including Citigroup and Goldman Sachs earlier this week. Huntington Bancshares was no exception, reporting stronger earnings and net interest income. Its shares added 45 cents, or 4.8 percent, to $9.75.

The second-quarter earnings season enters its busiest period next week, when the market will get financial results from companies including McDonald’s, Apple, Boeing and AT&T.

Benchmark Currency Rates

USD

1.3524 0.0099 1.7088 1.1131 0.9316 0.9390 0.1290

EUR

0.7395 0.0073 1.2634 0.8230 0.6889 0.6946 0.0954

JPY

101.3400 137.0800 173.1550 112.7990 94.4050 95.1650 13.0739

GBP

0.5852 0.7916 0.0058 0.6515 0.5453 0.5499 0.0755

CHF

0.8985 1.2151 0.0089 1.5352 0.8370 0.8437 0.1159

CAD

1.0733 1.4518 0.0106 1.8342 1.1947 1.0079 0.1385

AUD

1.0644 1.4402 0.0105 1.8198 1.1845 0.9921 0.1374

HKD

7.7511 10.4835 0.0765 13.2451 8.6274 7.2210 7.2803

 

Source: Bloomberg

 


Category: FinanceAsia

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