Global shares mixed after Wall Street slump, oil price rally

KUALA LUMPUR, Malaysia — European stocks were mostly higher Thursday while Asian shares were mixed after a weak session on Wall Street. Tokyo shares rebounded after a weak start as the yen weakened against the U.S. dollar.

KEEPING SCORE: France’s CAC 40 rose 0.2 percent at 4,325.09 and Germany’s DAX gained 0.1 percent to 9,986.52. Britain’s FTSE 100 was nearly flat at 6,158.38. Dow and S&P 500 futures rose 0.4, suggesting a positive start for Thursday trading.

BRITISH FACTOR: A raft of data is due out later Thursday

and traders are watching for further clues on monetary policy from a speech by Bank of England Governor Mark Carney, especially in light of Britain’s referendum on continued EU membership due next month.

TOYOTA PROFIT: Shares in Toyota Motor Corp. fell 1.4 percent after a 6.1 percent drop overnight in New York. On Wednesday, the company projected a 35 percent plunge in profit for the fiscal year through March 2017 as the perks of a favorable exchange rate fade, and it reported a 4 percent drop in profit for January-March on-year. Other exporters can expect similar woes thanks to the yen’s recent gains against the U.S. dollar.

OIL PRICES: Already trading at its highest price in six months, benchmark U.S. crude rose overnight after the government reported a surprise decline of 3.4 million barrels in supplies for last week and a 6 percent reduction in U.S. oil output. U.S. oil gained 1 cent to $46.24 a barrel in electronic trading on the New York Mercantile Exchange. It jumped $1.57, or 3.5 percent, to $46.23 a barrel on Wednesday. Brent crude, the international benchmark, gained 5 cents to $47.65 a barrel. It had jumped $2.08, or 4.6 percent, to $47.60 a barrel in London.

ANALYST VIEWPOINT: “Commodity stocks are among the few positive movers today, following a major oil rally on the back of U.S. evidence consumption is eating into the historically high stock piles of crude,” Michael McCarthy of CMC Markets said in a commentary. “This better demand picture combined with a slightly weaker USD makes energy and materials the sectors du jour.”

ASIA’s DAY: Japan’s Nikkei 225 stock index rose 0.4 percent to 16,646.34, while the Hang Seng index of Hong Kong dropped 0.7 percent to 19,915.46. South Korea’s Kospi lost 0.1 percent to 1,977.49 and Australia’s S&P/ASX 200 fell 0.2 percent to 5,359.30. Taiwan fell but most benchmarks in Southeast Asia rose.

CURRENCIES: The dollar rose to 108.99 yen from 108.40 in the previous session. The euro slipped to $1.1413 from $1.1424. The yen-dollar rate has “slipped back down to 108 levels, as a short-squeeze in the early week abated with no more official talk of intervention yesterday, while markets are also doubting if Japan would intervene in advance of the G7 summit,” Mizuho Bank Ltd. (Singapore branch) said in a commentary. TVJ

source: business.inquirer.net

M&A fever helps European stocks rally

Paris — European stocks rose on Monday as a flurry of big mergers and acquisitions deals boosted sentiment and helped the market bounce back after a two-session dip.

Shares in Irish drugmaker Elan jumped 8.3 percent after US peer Perrigo agreed to buy the firm for $8.6 billion, sparking a rally in health care stocks, with Shire up 2.1 percent and AstraZeneca up 1.2 percent.

Media shares also surged, boosted by a merger plan between Publicis and Omnicom unveiled over the weekend, in a deal worth $35.1 billion.

France's Havas soared 5.7 percent and UK's WPP added 1.7 percent. Publicis shares were halted on Monday.

At 0802 GMT, the FTSEurofirst 300 index of top European shares was up 0.4 percent at 1,209.40 points, after losing about 0.8 percent in two sessions. The benchmark index has risen 9 percent since late June.

Also among the biggest gainers on Monday, France's Essilor, an ophthalmic optics company, rose 4.1 percent after buying a 51 percent stake in photochromic lens unit Transitions Optical from PPG Industries Inc. for $1.73 billion.

The media and health care sectors have outperformed the market this year, with the STOXX Europe 600 media index up 17 percent and the STOXX Europe 600 health care index up 14.4 percent, while the FTSEurofirst 300 is up 6.9 percent.

"These big M&A deals are a big boost for the market, although the buzz is usually short-lived, so I remain relatively cautious at this point," said Philippe de Vandiere, analyst at Altedia Investment Consulting, in Paris.

"The market has risen quite a lot already and even though we didn't really have nasty surprises in earnings, there's no big catalyst seen ahead, and we see investors turning more defensive."

On the earnings front, French food group Danone gained 3.1 percent after saying sales growth accelerated in the second quarter, and keeping its full-year 2013 profit and sales outlook.

Siemens rose 1.5 percent. The German engineering conglomerate said its supervisory board will decide on the early departure of its chief executive on July 31.

Around Europe, UK's FTSE 100 index was up 0.6 percent, Germany's DAX index up 0.8 percent, and France's CAC 40 up 0.5 percent. The euro zone's blue-chip Euro STOXX 50 index was up 0.3 percent at 2,748.96.

"I'm quite positive, the market goes up slowly with some consolidation moves happening during the session," TradingSat analyst Alexandre Tixier said.

"Trading volumes remain brisk, which is a sign of strong buying appetite at this point. Our exposure to equities is at 80 percent right now." — Reuters

source: gmanetwork.com

European stocks claw back ground as markets steady

London — European stocks, bonds and the dollar traded in a calmer fashion on Monday after last week's turbulence, though another three percent dive in Japan's Nikkei kept investors on edge.

Last week's shakeout of equity, bond and currency markets was triggered by concerns the US Federal Reserve could wind in its support sooner that had been expected, weak China data and doubts over how low Japan will allow the yen to go.

With UK and US markets both closed for public holidays, European equity and bond markets saw a quieter than usual start to the week.

The FTSEurofirst 300 index of top European shares started up 0.3 percent as last week's falls tempted buyers, while demand for safe-haven 10-year German government bond futures eased.

The dollar was also steadier, though it dipped to 101.00 against the yen as the latest steep fall in Japanese equities saw investors continue to unwind their dollar hedges and head for bonds. The euro was little changed at $1.2940.

"Markets are currently experiencing difficulty fully and precisely understanding both the pace of global growth and the implications of central banks' activism," Credit Agricole said in a note.

"Expectations cannot remain stable for long and so investors should be prepared for periods of higher volatility in particular asset classes," they added.

In commodity markets, Brent crude slipped towards $102 per barrel, extending last week's 2 percent drop, as a weak economic outlook in a well-supplied market pressured prices. The broader market nerves also helped gold firm as it looked to build on last week's best run in a month. — Reuters

 

source: gmanetwork.com