Asian markets tumble as oil collapses again

HONG KONG—The slump in oil dominated the mood on Asian markets Wednesday after falling back below $30 a barrel, hammering energy firms once again and sending stocks deeper into the red.

With the euphoria of Friday’s Bank of Japan stimulus but a distant memory, Tokyo led the regional losses followed by Hong Kong, where insurance giant AIA lost almost a 10th of its value on fears China would tighten insurance rules.

The plunge in oil prices to 12-year lows has sent shudders through world markets, helping wipe trillions of dollars off valuations, even leading to the word “recession” raising its head.

Crude resumed its downward trend this week, jettisoning most of the gains seen in a four-day rally last week fuelled by hopes for OPEC-Russian talks on output cuts.

US benchmark West Texas Intermediate crashed more than 11 percent on Monday and Tuesday to fall back through the $30 level for the first time since January 21. Brent lost almost six percent in the same period.

And on Wednesday the losses piled up ahead of a US report that analysts warned could see a further increase in stockpiles. WTI lost one percent and Brent 0.9 percent in early Asian trade.

Oil prices have crumbled about 75 percent since mid-2014, hit by a perfect storm of weak demand, oversupply, overproduction, a slowing global economy and a strong dollar.

After already taking a hit on Tuesday, regional energy stocks were buffeted again on Wednesday.

In Hong Kong, CNOOC shed 5.7 percent and PetroChina dived five percent while Kunlun Energy sank 5.6 percent.

Sydney-listed Santos lost 7.5 percent and mining giant BHP Billiton lost 4.2 percent while Woodside Petroleum fell 4.3 percent.

Inpex gave up three percent in Tokyo, where JX Holdings was 2.8 percent off.

‘Talk of recession louder’

The losses followed other big guns in New York and Europe. BP lost 8.7 percent in London after it suffered a loss of $6.48 billion last year and announced another 3,000 job cuts. Chief executive Bob Dudley warned: “We expect 2016 to be tough.”

BP’s American rival, ExxonMobil, managed to stay profitable, but reported a 58 percent drop in fourth-quarter earnings and announced plans to slash its capital budget and suspend its share repurchase programme.

“The underlying fundamentals are deteriorating and the talk of recession is getting louder,” Chris Weston, chief market strategist at in Melbourne at IG Ltd., told Bloomberg News.

“When you see BP coming out with disastrous results and when you see Exxon cutting back on expenditures again, you realise the implication weak oil has on economies.”

Tokyo’s Nikkei index sank 3.1 percent by lunch, while Hong Kong was almost three percent off, Sydney lost 2.1 percent and Seoul shed 1.1 percent. Shanghai slipped one percent.

There were also sharp losses across other parts of Asia, with Singapore, Manila and Kuala Lumpur worst hit.

In Hong Kong, insurance giant AIA lost 8.8 percent in the morning following a Bloomberg News report that China would clamp down on the purchase of overseas cover. AIA’s US shares lost more than five percent.

Beijing wants to close a loophole in its capital controls aimed at stemming the outflow of its depreciating yuan currency, as the economy logs its slowest growth in 25 years.

Manulife, another Hong Kong-listed insurer, shed 5.5 percent.

source: business.inquirer.net

S&P 500, Dow end at record highs, boosted by healthcare

NEW YORK - The Dow and S&P 500 closed at record highs on Tuesday, lifted by further gains in healthcare shares and hopes for a stronger global economy.

The S&P 500 scored its fourth straight day of gains.

Actavis Plc, Gilead Sciences and other biotechs were among the biggest drivers, a day after Allergan agreed to be bought by Actavis. The Nasdaq biotech index rose 2.1 percent.

The S&P health care index added 1.6 percent. Shares of Actavis were up 8.7 percent at $269.60, helped by bullish analyst notes, while Gilead's stock rose 3.3 percent to $103.71 percent.

"A little bit of a risk trade is coming back on, and those are the areas for the M&A," said Uri Landesman, president of Platinum Partners in New York. "It's a very, very good environment to buy growth, so I don't quibble with the notion that there's going to be more M&A."

Among the biggest boosts to the Dow, shares of UnitedHealth were up 1.8 percent at $98.19.

Further supporting stocks, news of a snap election and a delayed tax increase in Japan strengthened hopes for new stimulus, a day after data showed Japan back in recession. In Europe, German analyst and investor sentiment advanced this month for the first time in almost a year.

Benign U.S. inflation data also helped.

The Dow Jones industrial average rose 40.07 points, or 0.23 percent, to 17,687.82, a record high. The S&P 500 gained 10.48 points, or 0.51 percent, to 2,051.8, its biggest one-day move since Nov. 5.

The Nasdaq Composite added 31.44 points, or 0.67 percent, to 4,702.44.

Actavis was the S&P's biggest percentage gainer; the largest decliner was Urban Outfitters, down 6.6 percent at $28.79, following results.

On the Nasdaq 100, the largest gainer was Dish Network, up 3.9 percent to $67.85, while the largest decliner was Staples, down 1.6 percent at $12.76.

Among the most active NYSE stocks were Petrobras, up 0.96 percent at $9.42, and General Electric, up 1.50 percent at $27.01. On the Nasdaq, Apple, up 1.3 percent to $115.47, was among the most active.

About 6.1 billion shares traded on U.S. exchanges, below the 6.4 billion average this month, according to BATS Global Markets.

NYSE advancers outnumbered decliners 1,862 to 1,217, for a 1.53-to-1 ratio; on the Nasdaq, 1,645 issues rose and 1,079 fell for a 1.52-to-1 ratio.

The S&P 500 was posted 77 new 52-week highs and one new lows; the Nasdaq Composite recorded 95 new highs and 56 new lows.  — Reuters

Global Markets: Stocks struggle after euro zone growth reports

LONDON - European stocks fell back on Friday and US stocks looked set to open flat after a mixed bag of euro zone growth numbers that showed France and Germany growing marginally but others like Italy still firmly in recession.

Asian stocks had fallen earlier on the latest signs that growth in China is also slowing and the European data confirmed that the outlook for much of the world economy still looks much shakier than for the United States.

Energy stocks were depressed as crude oil edged up from a near four-year low hit in Asian time and the Russian ruble, hammered in recent weeks as world oil prices fell, was down almost 1 percent, testing record lows around 48 per dollar.

Germany's economy eked out growth of 0.1 percent on the quarter, while France - generally seen as in deeper trouble than its neighbor - grew by 0.3 percent, helping the euro zone as a whole to grow 0.2 percent.

"The German number is slightly positive - in line with expectations, but it's still soft," said Patrick Jacq, a rate strategist at BNP Paribas in Paris.

"The (French) growth in Q3 is only driven by inventories. It's just a one-off positive figure in a very weak environment and therefore this is not something which could lead the market to think that the economic situation is improving in France."

European shares fell 0.4 percent, with traders saying a dip below an important technical barrier had helped spur a slump in Frankfurt mid-morning.. France performed better but was still 0.1 percent lower.

Telecom gear maker Nokia was among the big losers, down 5.6 percent as traders cited disappointment with the group's updated profit margin targets.

MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.2 percent, countered by a half-point rise in Tokyo.

A Reuters poll showed Japanese companies overwhelmingly want Prime Minister Shinzo Abe to delay or scrap a planned tax increase, a move expected to come along with a decision, expected by many, to call a new election.

The yen, down more than 3 percent against a stronger dollar this month, fell another half percent to a seven-year low of 116.385 yen per dollar.

"The argument is that delaying the sales tax hike means the impulse to CPI inflation will start to drop," said Alvin Tan, a currency strategist at French bank Societe Generale in London.

"If there's no additional sales tax hike, the impulse to higher inflation starts to fade away quite rapidly. So in order to push inflation higher, which is what everybody wants, you need the currency to weaken a lot more."

New chapter
The perception that the US economy is faring better than either Europe's or Japan's, and expectations that monetary policy there will tighten next year as a result, has helped push the dollar higher against both the euro and yen.

The euro was down 0.2 percent at $1.2429, inching back towards a two-year low of $1.2358 struck last Friday.

Oil edged up from an early four-year low below $77 a barrel, still pressured by excess supply and skepticism that OPEC would cut output at a meeting in two weeks.

The International Energy Agency, which usually refrains from predicting oil prices, said in its monthly report that prices could fall further in 2015 and pressure was building on OPEC to cut supply.

"It is increasingly clear that we have begun a new chapter in the history of the oil markets," the IEA, which advises the United States and other industrialized countries, said.

"Barring any new supply disruption, downward price pressures could build further in the first half of 2015."

Brent hit an intra-day low of $76.76 in Asian time but had recovered to trade at $78.52 as of 1248 GMT.

Global benchmark Brent is down from $115 in June and has dropped for eight weeks in a row, its longest weekly losing streak since records began in 1988, based on Reuters data. — Reuters

Dow, S&P 500 close slightly lower; semis boost Nasdaq

NEW YORK - The S&P 500 and the Dow closed with slight losses on Monday after briefly touching intraday records, but strength in semiconductors boosted the Nasdaq.

Monday's subdued trading followed the Dow's biggest weekly gain since January 2013 and the S&P's biggest two-week jump since December 2011. Gains in recent weeks have largely come on the back of strong quarterly results, which have eased concerns over how corporations are faring in an uncertain global economy.

"We got back to the highs in the S&P 500 and Dow rather quickly, so I think you're running into some resistance and profit-taking," said Stephen Carl, principal and head of U.S. Equity Trading at The Williams Capital Group.

While the market's momentum is to the upside, near-term trading may be quieter as earnings season draws to a close. With results in from 73 percent of companies, three-quarters have beat analysts' expectations, according to Thomson Reuters data, above the long-term average of 63 percent.

The Dow Jones industrial average .DJI fell 24.28 points, or 0.14 percent, to 17,366.24, the S&P 500 .SPX lost 0.24 points, or 0.01 percent, to 2,017.81 and the Nasdaq Composite .IXIC added 8.17 points, or 0.18 percent, to 4,638.91.

Shares of AIG (AIG.N) rose 1.4 percent in after-hours trading. The company reported better-than-expected third-quarter earnings.

Sprint (S.N) shares fell 5.25 percent after hours. Its third-quarter revenue rose slightly less than expected.

Among the day's biggest movers, Sapient Corp (SAPE.O) rose 42 percent to $24.60 on heavy volume after Publicis (PUBP.PA) agreed to buy the digital ad company for $3.7 billion in cash.

Covance Inc (CVD.N) jumped 25.9 percent to $100.57 after Laboratory Corp of America Holdings (LH.N) agreed to buy the company for $6.1 billion. Laboratory Corp fell 7.4 percent to $101.23 as the S&P's biggest decliner.

In the latest economic data, U.S. construction spending fell 0.4 percent in September, well below expectations. However, manufacturing activity unexpectedly accelerated in October and automobile sales were strong, easing concerns of a significant moderation in economic growth.

NYSE declining issues outnumbered advancers 1,565 to 1,511, for a 1.04-to-1 ratio on the downside; on the Nasdaq, 1,487 issues fell and 1,199 advanced for a 1.24-to-1 ratio.

The S&P 500 posted 73 new 52-week highs and 1new low; the Nasdaq Composite recorded 131 new highs and 44 new lows.

About 7 billion shares changed hands on U.S. exchanges, below the 7.8 October average, according to data from BATS Global Markets.  — Reuters

Eurozone economy trapped in recession

Brussels — The dogged recession across the eurozone is deepening with the latest EU figures released Wednesday showing a full year-and-a-half of contraction as tens of millions languish in unemployment.

With governments trapped in austerity, banks refusing to lend and leaders resorting to urgent bids to unlock tax hidden in offshore bank vaults, the eurozone is now firmly entrenched as the global economy's "weakest link," according to Dutch-based ING analysts.

One week from another tense summit of EU leaders, official figures showed a 0.2 percent contraction between January and March, in the longest recession since the single currency bloc was established in 1999.

On a year-by-year comparison, data agency Eurostat said this translated into a 1.0 percent drop in output across the 17 states that share the euro—which are home to 340 million people.

While core economy Germany clambered out of negative territory with 0.1-percent growth after a 0.7-percent slide at the end of 2012, France sank into recession with a 0.2-percent reduction and both Italy and Spain posted 0.5-percent drops, the figures showed.

"We doubt that the region is about to embark on a sustained recovery any time soon," said Ben May of London-based Capital Economics, citing disappointing survey results in recent weeks.

The latest official European Commission forecast for 2013 published earlier this month tipped a 0.4-percent contraction, but the analyst said that was way off course with "something closer to a two-percent decline" likely.

His firm's pessimism was backed by Howard Archer of fellow London-based specialist analysts, IHS Global Insight.

"We expect the eurozone to suffer gross domestic product (GDP) contraction of 0.7 percent in 2013 with very gradual recovery only starting in the latter months of the year," said Archer.

"Today's GDP figures once again show that the eurozone remains the weakest link in the world economy," said the ING analyst, Peter Vanden Houte, though "a subdued recovery in the second half of the year is still possible."

But for that to happen, it would be "imperative that eurozone leaders maintain the momentum in the strengthening of the monetary union, with the banking union as a first important hurdle to be taken."

He tipped action by the European Central Bank to boost lending to small businesses.

No figures were given for growth in Ireland which, among the bailout economies, appeared to have turned the corner in the previous quarter with flat instead of negative growth.

However, Cyprus, at negative 1.3 percent, can expect a sharp deterioration later, given that the figure was for the period prior to bailout negotiations that saw banks in lockdown for a fortnight. — Agence France-Presse

source: gmanetwork.com