- Bridgette Randall
- 15 Jul, 2024
- London
European markets halted a three-day rally as investors reviewed global developments.
Benchmark indexes in Paris, London, and Frankfurt declined around 0.5% after China reported mixed economic data, and U.S. election uncertainty reached a new high after an assassination attempt on former president Donald Trump.
Closer to home, industrial output fell less than expected in May, Eurostat reported Monday.
Industrial output declined by 0.6% from the previous month in May, following a flat reading in the previous month.
On an annual basis, output decreased 2.9% in May from an upwardly revised 3.1% in April.
Europe Indexes and Yields
The DAX index decreased by 0.4% to 18,676.88; the CAC-40 index fell by 0.7% to 7,673.76; and the FTSE 100 index rose by 0.4% to 8,224.75.
The yield on 10-year German bonds edged lower to 2.49%. French bonds inched lower to 3.15%; the UK gilts inched lower to 4.11%; and Italian bonds decreased to 3.77%.
The euro edged lower to $1.09; the British pound inched higher to $1.29; and the U.S. dollar weakened to 89.36 Swiss cents.
Brent crude decreased $0.14 to $84.89 a barrel, and the Dutch TTF natural gas rose by €0.39 to €31.18 per MWh.
Europe Stock Movers
The Swatch Group dropped 10.9% to CHF 169.60 after the Swiss watch group reported a sharp decline in sales and earnings in the first half due to a slowdown in China.
Burberry Group plunged 16.9% to 738.60 pence after the UK-based luxury group issued a profit warning and rehired its chief executive.
Luxury stocks in Paris declined after China reported mixed economic data and slower-than-estimated second-quarter economic growth of 4.7%.
LVMH, Kering, and Hermes declined between 2% and 4%.
Ericsson AB decreased 1.1% to SEK 70.10, and the Swedish telecom equipment maker signed a cross-licensing patent agreement with the China-based mobile handset maker Oppo.
Brunner Investment Trust increased 1.1% to 1,390.0 pence after the investment fund reported an increase in profit in the first half.
ME Group International PLC gained 0.5% to 182.68 pence, and the UK-based vending machine operator reported strong results in the six months ending in April.
BayWa plunged 33% to €15.18 after the Germany-based agriculture nutrition company said that the financially challenged company is seeking a restructuring opinion.
CompuGroup Medical decreased 0.1% to €15.97 after the German medical software company reported its second quarter results.
- Akira Ito
- 15 Jul, 2024
- Tokyo
Benchmark indexes in Tokyo dropped sharply in Friday's trading after the yen jumped more than 3%.
The Nikkei 225 stock average and the Topix declined between 2% and 1%, respectively.
Financial markets are closed on Monday in Japan for a public holiday.
The suspected market intervention by the Bank of Japan and the ministry of finance lifted the battered yen to 157.85 against the U.S. dollar for the second session in a row.
Moreover, the Bank of Japan stepped up pressure on currency traders and conducted exchange rate verification for the euro-yen trade.
The Bank of Japan has been struggling to balance its government bond purchase plan while keeping the yen from falling rapidly.
However, mixed messages from the Bank of Japan policymakers exacerbated the yen weakness due to the wide yield differential between Japanese and U.S. government bonds.
Tech stocks were among the leading decliners in Friday's trading, following the weakness in the sector after investors rotated out to smaller company stocks in New York.
In other economic news in the region, China's economic growth and retail sales in the second quarter fell short of market expectations.
Growth in the second quarter in the world's second-largest economy slowed to 4.7%, and retail sales slowed to 2% in June, the government data showed.
Moreover, fixed-asset investment growth eased to 3.9% in the first five months of May after property market investment plunged sharply from a year ago.
Moreover, the jobless rate held at 5% in June, matching the rate in the previous month.
Japan Stock Movers
In Friday's trading, the Nikkei 225 stock average dropped 2.5% to 41,190.68, and the Topix index declined 1.1% to 2,894.56.
Tokyo Electron, Advantest, Disco Corp., Lasertec, and SoftBank declined between 2% and 4%.
- Li Chen
- 15 Jul, 2024
- Mumbai
Amid cautious market sentiment, indexes in Shanghai and Hong Kong traded down after weaker-than-expected economic data.
The Hang Seng index plunged as much as 1.5%, and the CSI 300 index traded volatile but stayed closed to the flatline.
GDP growth in the second quarter fell short of market expectations, and a significant increase in retail sales in June showed persistent consumer demand weakness.
China's economy expanded at an annual pace of 4.7% in the second quarter, falling short of the market estimate of an increase of 5.1%, the National Bureau of Statistics reported Monday.
Growth in the second quarter slowed to 0.7% from the increase of 1.6% in the first quarter, due to persistent demand weakness amid a protracted property market slump.
In separate reports, the statistical agency said retail sales in June from a year ago rose 2.0%, slower than 3.7% in May, and industrial output growth slowed to an annual pace of 5.3% from 5.6% in May.
Property market weakness continues to hamper China's overall fixed-asset investment growth.
Fixed-asset investment increased 3.9% in the five-month period to May from a 4% annual pace in the period a year ago.
Property investment declined 10.1% in June, matching the rate in the previous month.
The weakness in the property market, compounded by the slowdown in retail sales and fixed-asset investment, is likely to keep the second-largest economy's growth in check and may miss the 5% annual growth target set by the government.
Moreover, China's urban jobless rate held steady at 5% in June, matching the rate in the previous month.
China's economic data, especially the job market update, are widely viewed with skepticism because local governments have fudged economic growth estimates for years.
Aggregate new home prices in the 70 largest cities in China declined 0.7% from the previous month in June and slowed to 0.71% in May, the National Bureau of Statistics reported Monday.
New home prices declined 4.5% from a year ago in June, accelerating from a 3.9% decline in the previous month.
Moreover, property prices declined for the 12th month in a row and dropped at the fastest pace since June 2015.
Except for Shanghai, prices declined in all major cities across China.
However, existing home prices declined at a slower pace of 0.9% in June from the 1% fall in May, a separate report from the statistical agency showed.
China Stock Movers
The Hang Seng index decreased 1.5% to 18,021.19, and the CSI 300 index added 0.1% to 3,475.09.
Tech stocks led the decline in Hong Kong trading, and financial, industrial, and travel-related stocks were also among the decliners.
Baidu decreased 6% to HK $93.65, Tencent Holdings dropped 2% to HK $389.20, and Meituan fell 2.4% to HK $118.90.
Property stocks were also under pressure after property prices continued to decline in June and fixed-asset investment in the sector fell in June.
China Vanke decreased 2.2% to HK $4.66, China Resources Land declined 3.2% to HK $27.05, and Evergrande Property Services Group fell 4.2% to HK $0.68.
- Arun Goswami
- 15 Jul, 2024
- Mumbai
Consumer price inflation increased to a four-month high in June and stayed above the RBI's target range after food prices accelerated.
Industrial output rose to a seven-month high in May due to a surge in electricity production.
The Sensex index increased by 0.3% to 80,721.82, and the Nifty index rose by 0.3% to 24,567.70.
On the Mumbai stock exchange, 135 stocks traded at their 52-week highs, and 17 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds inched higher to 6.99%, and the Indian rupee edged higher to ₹83.54 against the U.S. dollar.
Jupiter Wagons increased 3.9% to ₹723.20, and the company completed a secondary offering and raised ₹800 crore.
HCL Technologies gained 2.7% to ₹1,601.90, and the software services provider reiterated revenue growth in the current financial year.
Revenue in the June quarter decreased 1.6% to ₹28,057 crore, and net income dropped 6.8% to ₹4,257 crore from a year earlier.
The company estimated constant currency revenue in the current fiscal year to increase between 3% and 5% and operating earnings margin between 18% and 19%.
The software service provider also declared a cash dividend of $12 per share.
Avenue Supermarts increased 0.7% to ₹4,981.15 after the grocery retailer reported June quarterly results that met investor expectations.
Revenue rose 18.5% to 18.6% to ₹14,069 crore, and net income advanced 17.5% to ₹774 crore from a year earlier.
Plastiblends India increased 3.4% to ₹326.35, and the manufacturing company reported better-than-expected quarterly results in the March quarter.
Revenue increased 8.1% to ₹211.6 crore, and net income surged 42% to ₹10.8 crore from a year earlier.
Bhansali Engineering Polymers decreased 1.4% to ₹141.83, and the plastic products maker reported higher-than-expected revenue and earnings in the June quarter.
Revenue increased 15% to ₹340 crore, and net income advanced 5.6% to ₹53.4 crore from a year earlier.
Geojit Financial Services advanced 5% to ₹110.80, and the company reported a surge in net income and revenue in the June quarter.
Consolidated revenue soared 56% to ₹181.2 crore, and net income jumped 107.5% to ₹45.8 crore from a year earlier.
- Scott Peters
- 12 Jul, 2024
- New York City
Citigroup decreased 0.8% to $65.15 after the global bank reported higher-than-expected revenue and earnings in the second quarter.
Total revenue in the second quarter increased 4% to $20.1 billion from $19.4 billion, net income advanced 10% to $3.2 billion from $2.9 billion, and diluted earnings per share rose to $1.52 from $1.33 a year earlier.
JP Morgan Chase declined 1.1% to $205.09 after the New York-based bank reported stronger-than-expected revenue in the second quarter.
Revenue increased 22% to $50.2 billion from $41.3 billion, net income advanced 25% to $18.1 billion from $14.5 billion, and diluted earnings per share rose to $6.12 from $4.75 a year ago.
Wells Fargo declined 6.6% to $56.19, and the financial service company reported weaker-than-expected net interest income in the second quarter.
Revenue in the quarter increased to $20.7 billion from $20.5 billion, net income decreased to $4.91 billion from $4.93 billion, and diluted earnings per share rose to $1.33 from $1.25 a year earlier.
Wells Fargo stock declined after net interest income declined 9% to $11.9 billion from $13.2 billion a year ago.
- Barry Adams
- 12 Jul, 2024
- New York City
Mega-cap tech stocks rebounded a day after a sharp selloff as investors reviewed the latest batch of earnings from major banks.
The S&P 500 index and the Nasdaq Composite advanced more than 0.5% after JP Morgan Chase and Citigroup reported better-than-expected second-quarter results.
Wells Fargo dropped more than 6% after the financial service company reported that net interest income declined in the second quarter, and the bank reiterated that its full-year net interest income would fall between 7% and 9%.
On the economic front, producer price inflation was 2.6% from a year ago and 0.2% from the previous month in June, according to the latest data released by the U.S. Bureau of Labor Statistics.
Producer price inflation increased at an annual pace of 2.6%, the fastest pace since March 2023, after increasing at an upwardly revised 2.4% in May.
Treasury yields continued to look down, and investors overlooked wholesale inflation and focused on Thursday's release of consumer price inflation of 3.0%.
Investors are still hoping the Federal Reserve will start cutting rates as early as September, but those hopes may be dashed as policymakers look for more evidence of a downward trajectory in inflation.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.4% to 5,606.72, and the Nasdaq Composite rose 0.7% to 18,405.71.
The yield on 2-year Treasury notes edged lower to 4.49%, 10-year Treasury notes increased to 4.21%, and 30-year Treasury bonds edged higher to 4.42%.
WTI crude oil increased $1.03 to $83.62 a barrel, and natural gas prices edged down 0.1 cent to $2.26 a thermal unit.
Gold decreased by $14.60 to $2,401.35 an ounce, and silver fell 70 cents to $30.70.
The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 104.17.
U.S. Stock Movers
Citigroup decreased 0.8% to $65.15 after the global bank reported higher-than-expected revenue and earnings in the second quarter.
Total revenue in the second quarter increased 4% to $20.1 billion from $19.4 billion, net income advanced 10% to $3.2 billion from $2.9 billion, and diluted earnings per share rose to $1.52 from $1.33 a year earlier.
JP Morgan Chase declined 1.1% to $205.09 after the New York-based bank reported stronger-than-expected revenue in the second quarter.
Revenue increased 22% to $50.2 billion from $41.3 billion, net income advanced 25% to $18.1 billion from $14.5 billion, and diluted earnings per share rose to $6.12 from $4.75 a year ago.
Wells Fargo declined 6.6% to $56.19, and the financial service company reported weaker-than-expected net interest income in the second quarter.
Revenue in the quarter increased to $20.7 billion from $20.5 billion, net income decreased to $4.91 billion from $4.93 billion, and diluted earnings per share rose to $1.33 from $1.25 a year earlier.
Wells Fargo stock declined after net interest income declined 9% to $11.9 billion from $13.2 billion a year ago.
- Inga Muller
- 12 Jul, 2024
- Frankfurt
European markets rebounded, the euro held firm, and bond yields edged lower after a week of political turmoil in France.
Germany's wholesale prices declined for the 14th month in a row.
The DAX index increased by 0.4% to 18,604.44; the CAC-40 index rose by 0.7% to 7,683.84; and the FTSE 100 index rose by 0.2% to 8,242.84.
The yield on 10-year German bonds edged lower to 2.51%. French bonds inched lower to 3.17%; the UK gilts inched lower to 4.14%; and Italian bonds decreased to 3.81%.
L M Ericsson Class B increased 2.4% to SEK 69.60, and the telecom equipment maker reported operating earnings in the second quarter exceeded market expectations.
Aker Solutions ASA jumped 16.1% to €4.18, and the Norwegian maker of products for renewable energy projects reported better-than-expected second-quarter earnings.
Ashmore Group decreased 1.4% to 177.59 pence after the company said the asset under management declined by $2.4 billion over the quarter ending in June.
Lifco AB increased 8.2% to SEK 321.80 after the diversified business company reported better-than-expected second quarter results.
Revenue increased 4.6% to SEK 12.7 billion, net income fell 2.9% to SEK 1.6 billion, and earnings per share eased to SEK 2.50 from SEK 2.60 a year earlier.
Revenue in the second quarter ending in June increased 8.4% to SEK 6.7 billion, and net income rose 5% to SEK 914 million.
- Bridgette Randall
- 12 Jul, 2024
- London
European markets extended gains for the third session in a row as investors prepare for a flood of earnings next week.
Benchmark indexes in London and Frankfurt are set to extend weekly gains, while those in Paris trim weekly losses.
The euro was in focus for the second week in a row, and investors debated the growing division among political parties and the shape of the next coalition government.
The odds are rising that French President Emmanuel Macron may be forced to appoint a technocrat leader as the next prime minister after parities of various ideologies show no sign of compromise.
French business leaders are also worried that the rise of far-left parties could alter the government's spending priorities and programs that are business-unfriendly.
On the economic front, Germany's wholesale prices declined for the 14th month in a row, but the decline was the smallest in the latest series, the Federal Statistical Office, or Destatis, reported Friday.
Producer price index decreased 0.6% from a year ago in June, after falling 0.7% in the previous month.
On a monthly basis, producer prices unexpectedly declined by 0.3% in June, the first fall in four months after rising by 0.1% in May.
Europe Indexes and Yields
The DAX index increased by 0.4% to 18,604.44; the CAC-40 index rose by 0.7% to 7,683.84; and the FTSE 100 index rose by 0.2% to 8,242.84.
The yield on 10-year German bonds edged lower to 2.51%. French bonds inched lower to 3.17%; the UK gilts inched lower to 4.14%; and Italian bonds decreased to 3.81%.
The euro edged lower to $1.08; the British pound inched higher to $1.29; and the U.S. dollar weakened to 89.58 Swiss cents.
Brent crude increased $0.52 to $85.91 a barrel, and the Dutch TTF natural gas rose by €0.24 to €31.32 per MWh.
Europe Stock Movers
L M Ericsson Class B increased 2.4% to SEK 69.60, and the telecom equipment maker reported operating earnings in the second quarter exceeded market expectations.
Aker Solutions ASA jumped 16.1% to €4.18, and the Norwegian maker of products for renewable energy projects reported better-than-expected second-quarter earnings.
Ashmore Group decreased 1.4% to 177.59 pence after the company said the asset under management declined by $2.4 billion over the quarter ending in June.
Lifco AB increased 8.2% to SEK 321.80 after the diversified business company reported better-than-expected first-half results.
Revenue increased 4.6% to SEK 12.7 billion, net income fell 2.9% to SEK 1.6 billion, and earnings per share eased to SEK 2.50 from SEK 2.60 a year earlier.
Revenue in the second quarter ending in June increased 8.4% to SEK 6.7 billion, and net income rose 5% to SEK 914 million.
- Akira Ito
- 12 Jul, 2024
- Tokyo
Benchmark indexes in Tokyo traded down and trimmed weekly gains after the yen advanced more than 2% on the suspected market intervention.
The Nikkei 225 declined more than 2%, and the Topix index decreased more than 1.5%.
The yen strengthened to 159.05 against the U.S. dollar after U.S. consumer price inflation eased in June, raising the prospect of a rate cut as early as September.
The probable U.S. rate cut is likely to shrink the rate differential between the yields on U.S. and Japanese bonds, supporting the advance in the yen.
Market participants also did not rule out a possible government intervention and support for the yen after the currency drifted to new lows over the last two weeks of trading.
Nearly half the market capitalization of the Japanese stock market is driven by export-driven companies, and a stronger yen cuts into the profit outlook.
Japan Stock Movers
The Nikkei 225 stock average decreased 2.3% to 41,244.36, and the Topix index fell 1.6% to 2,895.55.
SoftBank, Advantest, Tokyo Electron, Disco Corp., and Screen Holdings fell between 4% and 7%.
Financial services stocks were among the leading decliners.
Mitsubishi UFJ, Mizhuo Financial Services, and Sumitomo Mitsui declined by around 2%.
Retailers fell sharply after the yen rebounded.
Seven & I, Isetan Mitsukoshi, and Takashimaya declined between 3% and 4%.
Honda Motor, Toyota Motor, and Nissan Motor declined by around 0.3%.
- Li Chen
- 12 Jul, 2024
- Hong Kong
Benchmark indexes in Hong Kong advanced but in Shanghai declined as investors reacted to the easing of U.S. inflation and China's international trade data.
The Hang Seng index gained more than 2% in the hopes that the U.S. Federal Reserve is more likely to lower interest rates in September after consumer price inflation eased in June.
Property developers in Hong Kong soared on the expectation that Hong Kong interest rates are likely to go down, matching the rate cuts in the U.S., because the Hong Kong dollar is linked to the U.S. dollar.
China's customs agency showed exports rose more than expected, raising speculation that buyers are stocking goods ahead of the expected increase in tariffs.
But the muted growth in imports suggested that demand for food, animal feed, and raw materials is affected by weak consumer demand and prolonged property market decline.
China's Exports Growth Drives Trade Surplus to a 2-year High
China's exports in June rose 8.6% to a 21-month high of $307.9 billion, indicating the fastest growth in shipments since October 2023, China's General Administration of Customs reported Friday.
Among China's largest trading partners, exports rose 6.6% to the U.S., 0.9% to Japan, 27.6% to Taiwan, 15.0% to the ASEAN region, and 4.1% to the European Union.
Meanwhile, China's imports declined 2.3% to $208.8 billion, resulting in a trade surplus of $99.1 billion, an increase from $82.6 billion in the previous month.
Trade surplus expanded to a high not seen since June 2022, after exports advanced and imports unexpectedly declined.
China's exports are expected to face growing headwinds in the second half amid rising geopolitical tensions and the additional imposition of high tariffs in some of its key markets.
China Stock Movers
The Hang Seng index increased 2.3% to 18,246.77, and the CSI 300 index decreased 0.1% to 3,466.80.
For the week, the Hang Seng index advanced 3.3% and the CSI 300 index gained 1.5%
Property developers in Hong Kong advanced in the hopes that Hong Kong rates are likely to ease following the slight decline in U.S. inflation.
China Vanke soared 5.1% to HK $4.75, Sun Hung Kai Properties rose 5.6% to HK $72.05, and Henderson Lad Development gained 7.4% to HK $23.35.
Cirrus Aircraft declined a fraction after the small jet manufacturer priced its stock at HK $27.50 per share in its initial public offering and raised HK $1.5 billion, or $193 million.
- Arun Goswami
- 12 Jul, 2024
- Mumbai
Stocks in Mumbai edged higher in cautious trading after Tata Consultancy reported better-than-expected revenue in the June quarter.
For the week, the Sensex and the Nifty indexes extended weekly gains to the sixth consecutive week.
The Sensex index increased by 0.1% to 80,242.50, and the Nifty index rose by 0.2% to 24,387.60.
On the Mumbai stock exchange, 145 stocks traded at their 52-week highs, and 9 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds inched lower to 6.97%, and the Indian rupee edged higher to ₹83.52 against the U.S. dollar.
Tata Consultancy Services jumped 1.6% to ₹3,980.0, and the tech services export reported June quarter results that surpassed market expectations.
Revenue in the quarter increased 3.9% to $7.5 billion, net income rose 8.7% to $1.44 billion, and earnings per share increased to 40 cents from 37 cents a year ago.
The company declared a ₹10 per share dividend to shareholders on record on July 20 and payable on August 5.
In rupees, revenue increased 5.4% to ₹62,613 crore, net income advanced 8.7% to ₹12,040 crore, and diluted earnings per share advanced to ₹33.28 from ₹30.26 a year ago.
Mahindra & Mahindra increased 0.7% to ₹2,716.0, and the company said total vehicle production increased 8% to 69,045 and total sales rose 11% to 66,800 from a year ago, respectively.
The company said it lowered its stake in Switzerland-based Gamaya, the provider of sugarcane crop remote monitoring systems, to 4.3% from 15.1%.
Prestige Estates Projects rose 0.6% to ₹1,780.85, and the residential real estate developer said June quarter sales declined.
Revenue in the June quarter decreased to ₹3.029 crore from ₹3,914 crore, and sales volume declined to 28.6 lakh square feet from 38.3 lakh square feet a year ago, respectively.
Aditya Birla Fashion increased 0.5% to ₹325.30, and the apparel retailer said it increased its stake in Goodview Fashion.
The retailer increased its stake to 51% from 33% for ₹127 crore in the Tarun Tahiliani-branded apparel maker.
Adani Wilmar increased 1% to ₹337.80, and the company is set to acquire a 67% stake in Omkar Chemical Industries for an enterprise value of ₹56.3 crore.
Allcargo Terminals increased 6.3% to ₹54.0, and the company said container freight station volume in June rose 20% from a year ago to 55,900 twenty-foot equivalent.