- Inga Muller
- 18 Jan, 2024
- Frankfurt
European markets rebounded after falling in three previous sessions, and passenger car registration eased on the weakness in the German market in December.
The DAX index increased 0.5% to 16,474.56, the CAC-40 index rose 0.5% to 7,354.37, and the FTSE 100 index decreased 0.05% to 7,441.98.
The yield on 10-year German bonds edged up to 2.28%; French bonds inched higher to 2.81%; the UK gilts edged higher to 3.94%; and Italian bonds increased to 3.90%.
Automakers were in focus after car registration in the European Union declined for the first time in December after rising for 16 months in a row.
Volkswagen Group increased 0.2% to €108.90, Mercedes-Benz Group gained 0.8% to €59.78, Renault gained 2.2% to €34.53, Peugeot Invest SA added 0.8% to €99.40, and Stellantis NV inched up 0.6% to €19.76.
Richemont soared 9.3% to CHF 115.20 after the Swiss luxury-goods company reported a rebound in sales in its fiscal third quarter.
Telefonica SA decreased 0.7% after the Spanish telecom company completed the sale of a green bond worth €1.75 billion.
J. Sainsbury plc added 0.5% to 286.70 pence after the company said it is exploring business alternatives for its financial service unit.
BHP Group decreased 0.6% to 2,369.85 pence after the company said it may write down assets in its nickel mining unit.
Kier Group advanced 7% to 120.0 pence after the construction company said performance in its first half of the fiscal year was better than in the comparable period in the previous year.
Watches of Switzerland Group plunged 31% to 399.40 pence after the UK-based retailer lowered its fiscal year 2024 guidance.
- Bridgette Randall
- 18 Jan, 2024
- Frankfurt
European markets traded higher after falling for three days in a row amid rising tensions in the Middle East and fading rate expectations.
Benchmark indexes in Paris, Frankfurt, and London advanced in Thursday's trading, and investors reviewed car registration data in the European Union and the eurozone current account surplus.
Eurozone Current Account Surplus Widens
The current account surplus in the Euro Area in November soared to Є31.7 billion from a revised Є6.6 billion a year ago, Eurostat reported Thursday.
The goods surplus rose to Є38.1 billion from Є7.5 billion, and the services surplus increased to Є12.6 billion from Є7.9 billion from a year ago, respectively.
For the January–November period, the currency union's surplus widened to ±225.8 billion from a deficit of ±90.2 billion in the same period in 2022.
EU Passenger Car Registration Rises In 2023
Passenger car registration in the European Union in December decreased for the first time after rising for 16 months in a row, the European Automobile Manufacturers Association reported Thursday.
December passenger car registration declined 3.3% to 867,052 units, driven by a 23% plunge in Germany.
However, registrations rose in France by 14.5% and in Spain by 10.6%.
For the 2023 full year, passenger car registration increased 13.9% to 10.5 million, driven by an increase in all EU markets except for a fall of 3.4% in Hungary.
Double-digit sales were recorded in most countries, including 18.9% in Italy, 16.7% in Spain, and 16.1% in France, the three largest markets in the Union.
Petrol cars retained their top spot with a 35.3% market share, followed by hybrid-electric cars with a share of 25.8% and battery-powered cars with 14.6%, surpassing diesel cars with 13.6%.
Europe Indexes and Yields
The DAX index increased 0.5% to 16,474.56, the CAC-40 index rose 0.5% to 7,354.37, and the FTSE 100 index decreased 0.05% to 7,441.98.
The yield on 10-year German bonds edged up to 2.28%; French bonds inched higher to 2.81%; the UK gilts edged higher to 3.94%; and Italian bonds increased to 3.90%.
The euro edged higher to $1.089, the British pound inched lower to $1.268, and the U.S. dollar eased to 86.44 Swiss cents.
Brent crude advanced $0.47 to $78.34 a barrel, and the Dutch TTF natural gas decreased by €0.72 to €28.46 per MWh.
Europe Stock Movers
Automakers were in focus after car registration in the European Union declined for the first time in December after rising for 16 months in a row.
Volkswagen Group increased 0.2% to €108.90, Mercedes-Benz Group gained 0.8% to €59.78, Renault gained 2.2% to €34.53, Peugeot Invest SA added 0.8% to €99.40, and Stellantis NV inched up 0.6% to €19.76.
Richemont soared 9.3% to CHF 115.20 after the Swiss luxury-goods company reported a rebound in sales in its fiscal third quarter.
Telefonica SA decreased 0.7% after the Spanish telecom company completed the sale of a green bond worth €1.75 billion.
J. Sainsbury plc added 0.5% to 286.70 pence after the company said it is exploring business alternatives for its financial service unit.
BHP Group decreased 0.6% to 2,369.85 pence after the company said it may write down assets in its nickel mining unit.
Kier Group advanced 7% to 120.0 pence after the construction company said performance in its first half of the fiscal year was better than in the comparable period in the previous year.
Watches of Switzerland Group plunged 31% to 399.40 pence after the UK-based retailer lowered its fiscal year 2024 guidance.
- Arjun Pandit
- 18 Jan, 2024
- Mumbai
In Asia, market indexes in China continued to drift lower, and indexes in Japan and Korea advanced.
Tensions remained high in the Middle East, and Pakistan recalled its ambassador from Tehran and expelled the Iranian envoy in Islamabad, a day after Iran carried out a missile strike in Panjgur, Balochista
The U.S. military carried out strikes on 14 missiles that were ready to be launched from Yemen by Houthi rebels, the Central Command said in a post on its social media channel on X.
In Hong Kong, the Hang Seng index rebounded 0.5% to 15,343.88 after falling in the previous four sessions in a row and extended 2024 losses to 10%, the worst start since 2016.
Alibaba Group, Baidu, and Netease advanced between 1.4% and 2.0% amid a rise in tech stocks.
In mainland China trading, the CSI 300 index declined 0.6% to 3,208.91 as foreign investors continued to lower their holdings of Chinese stocks on protracted property market woes and a weakening economic growth backdrop.
The Nikkei 225 index in Tokyo declined 0.1% to 35,440.01 after investors continued to unwind bets on rate-cut hopes in the U.S. and Europe and focus on domestic corporate earnings.
The Nikkei extended losses to the third day in a row, but tech stocks rebounded after falling in two previous sessions and the yen struggled near 148 against the U.S. dollar.
Core machinery orders in Japan declined seasonally by 4.9% from the previous month in November to 816.7 billion yen, the Cabinet Office said on Thursday.
That was well shy of expectations of a 0.8% decrease following the 0.7 percent increase in October.
On a yearly basis, orders declined 5.0% in the month after falling 2.2% in the previous month.
Advantest jumped 3.5% to ¥5,351.0, Screen Holdings added 0.5% to 12,895.0, and Tokyo Electron gained 0.7% to ¥26,575.0.
SoftBank declined 0.8% to ¥6,471.0, and Uniqlo operator Fast Retailing edged slightly lower, 0.07% to ¥38,720.0.
Elsewhere in the region, the KOSPI index in Seoul added 0.2% to 2,440.38, and the ASX 200 index in Sydney fell 0.6% to 7,346.50.
India Stocks Extend Losses After Mixed Quarterly Results
Stocks in Mumbai edged lower for the second day in a row, and investors confronted elevated tensions in the Middle East, mixed corporate earnings results, and the latest comments from RBI Governor Das.
Reserve Bank of India Governor Shaktikanta Das said economic growth in the current fiscal year is likely to reach 7%, and the central bank is confident of inflation reaching its target rate of 4% in the near term.
Governor Das commented on the sidelines of the World Economic Forum in Davos, Switzerland, an annual four-day gathering of 2,800 business and world leaders and policymakers.
Governor Das added that when inflation is close to 6%, it is premature to talk about lowering the interest rate, and the central bank's policy has to remain "actively disinflationary."
The central bank also plans to build its foreign exchange reserve from the current level of $617 billion to meet sudden and unpredictable capital outflows witnessed during the global bond market jitters of 2013, when the U.S. Federal Reserve announced its plan to taper off its monetary stimulus.
India Targets $100 Billion In Annual FDI Flow
India is looking to attract more foreign investment as the country's economic growth picks up and the government ramps up infrastructure investment.
India is looking to increase its foreign direct investment to $100 billion over the next few years as the government targets electronics manufacturing and advanced technology-driven projects, Information Technology Minister Ashwini Vaishnaw said on the sidelines of the World Economic Forum in Davos, Switzerland.
India attracted $71 billion in the financial year ending in March 2023 and has attracted $66 billion in the fiscal first half ending in September 2023.
- Arun Goswami
- 18 Jan, 2024
- Mumbai
Stocks in Mumbai edged lower for the second day in a row as investors confronted mixed quarterly results and elevated geopolitical tensions in the Middle East.
The Sensex index decreased 396.62 points to 71,104.14, and the Nifty index fell 132.25 points to 21,439.70.
On the Mumbai stock exchange, 194 stocks traded at their 52-week highs and 18 stocks traded at their 52-week lows.
HDFC Bank declined 3.5% to ₹1,499.50 and extended two-day losses to close to 10% after the largest private bank reported only a slight gain in its quarterly profit.
ICICI Prudential dropped 6.2% to ₹483.30 after the insurance company said quarterly profit rose less than 3%.
Premium income in the December quarter increased to ₹9,929 crore from ₹9,465 crore, and net income rose to ₹227 crore from ₹221 crore a year ago.
Assets under management rose to ₹2.87 lakh crore from ₹2.52 lakh crore in the previous year's quarter.
Oracle Financial Services soared 19% to ₹6,069.95 after the database provider reported a surge in revenue and profit in its latest quarter.
Revenue in the December quarter jumped 26% to ₹1,823.6, and net income soared 69% to ₹740.8 crore.
Bharat Electronics decreased 0.8% to ₹184.05 in a weak market, and the company said it received two orders worth ₹1,034.3 core.
Nazara Technologies declined 2.9% to ₹909.0, and the online education games maker said it plans to raise ₹250 crore through a secondary stock offering.
LTIMindtree dropped 11.6% to ₹5,564.95 after the company reported weaker-than-expected quarterly results.
Revenue in the December quarter rose 4.6% from a year ago to ₹9,017 crore, and net income advanced to 16.8% from a year ago to ₹1,169 crore.
Zaggle Prepaid Ocean Services increased 1.9% to ₹212.50, and the recently listed expense management software developer signed a ₹200 core contract with Torrent Gas.
- Arjun Pandit
- 18 Jan, 2024
- Mumbai
Stocks in Mumbai edged lower for the second day in a row, and investors confronted elevated tensions in the Middle East, mixed corporate earnings results, and the latest comments from RBI Governor Das.
Reserve Bank of India Governor Shaktikanta Das said economic growth in the current fiscal year is likely to reach 7%, and the central bank is confident of inflation reaching its target rate of 4% in the near term.
Governor Das commented on the sidelines of the World Economic Forum in Davos, Switzerland, an annual four-day gathering of 2,800 business and world leaders and policymakers.
Governor Das added that when inflation is close to 6%, it is premature to talk about lowering the interest rate, and the central bank's policy has to remain "actively disinflationary."
The central bank also plans to build its foreign exchange reserve from the current level of $617 billion to meet sudden and unpredictable capital outflows witnessed during the global bond market jitters of 2013, when the U.S. Federal Reserve announced its plan to taper off its monetary stimulus.
Tensions remained high in the Middle East, and Pakistan recalled its ambassador from Tehran and expelled the Iranian envoy in Islamabad, a day after Iran carried out a missile strike in Panjgur, Balochistan.
Moreover, the U.S. military carried out strikes on 14 missiles that were ready to be launched from Yemen by Houthi rebels, the Central Command said in a post on its social media X.
India Indexes and Yields
The Sensex index decreased 396.62 points to 71,104.14, and the Nifty index fell 132.25 points to 21,439.70.
On the Mumbai stock exchange, 90 stocks traded at their 52-week highs and 5 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds eased 7.17%, and the Indian rupee edged lower to ₹83.15 against the U.S. dollar.
The gold price increased by 0.05% to ₹61,555 per ten grams, and silver rose by 0.05% to ₹71,505 per kilo.
Crude oil increased by 1.1% to ₹6,071 per barrel, and natural gas fell by 1.4% to ₹239.70 per thermal unit.
India Stock Movers
HDFC Bank declined 3.5% to ₹1,499.50 and extended two-day losses to close to 10% after the largest private bank reported only a slight gain in its quarterly profit.
ICICI Prudential dropped 6.2% to ₹483.30 after the insurance company said quarterly profit rose less than 3%.
Premium income in the December quarter increased to ₹9,929 crore from ₹9,465 crore, and net income rose to ₹227 crore from ₹221 crore a year ago.
Assets under management rose to ₹2.87 lakh crore from ₹2.52 lakh crore in the previous year's quarter.
Oracle Financial Services soared 19% to ₹6,069.95 after the database provider reported a surge in revenue and profit in its latest quarter.
Revenue in the December quarter jumped 26% to ₹1,823.6, and net income soared 69% to ₹740.8 crore.
- Barry Adams
- 17 Jan, 2024
- New York City
U.S. stock extended yesterday's losses as investors debated rate paths and worried about the rising geopolitical tensions in the Middle East.
The S&P 500 index and the Nasdaq Composite futures declined 0.7%, and investors reassessed their rate-cut outlook after policymakers in the U.S. and Europe pushed back against expectations.
Moreover, the prospect of a wider war in the Middle East also sapped market enthusiasm after Iran launched missile attacks in Syria, Iraq, and Pakistan.
Houthi rebels backed by Iran also continued their attacks on merchant ships traveling through the Red Sea, forcing most shipping companies to divert shipments along the coast of Africa, increasing costs and shipment times.
China reported the slowest economic growth in nearly three years, and GDP expanded at a slower-than-expected 5.2% in 2023, following the growth of 3.0% in 2022.
China's retail sales growth of 7.0% fell short of market expectations, but industrial output accelerated to 6.8%, reaching a 22-month high in December.
China-exposed stocks traded down after the release of economic updates, and the Hang Seng index plunged 3.7% in Wednesday's trading.
Closer to home, U.S. retail sales were ahead of market expectations, suggesting resilient consumer spending and denting hopes of aggressive rate cuts from the Federal Reserve.
On Tuesday, Federal Reserve Governor Chris Wallace warned that investors may be too optimistic about the easing of monetary policy in the near term.
U.S. Retail Sales Advanced In December
Retail sales, adjusted for seasonal and calendar factors but not price changes, increased 5.6% from a year ago in December, the U.S. Census Bureau reported Wednesday.
Retail sales rose the most in eleven months, following a downwardly revised 4% rise in November.
Retail sales, unadjusted for price changes or inflation, increased 3.2% in the full year 2023.
U.S. Mortgage Applications Rebound
Mortgage applications surged 10.4% in the week ending January 12, faster than 9.9% in the previous week, the Mortgage Bankers Association reported Wednesday.
Mortgage applications to purchase a new home jumped 9% from the 6% increase the previous week, and applications to refinance a home loan advanced by 11% as lower rates lured home buyers back to the market.
The average contract rate for 30-year fixed-rate mortgages with loan balances of less than $726,200 decreased to 6.75% from 6.81% with a down payment of 20% and points rising to 0.62 from 0.61.
Commercial Property Mortgage Delinquency Rate Advanced
The delinquency rate for mortgages backed by commercial properties rose in the fourth quarter of 2023, MBA reported in a separate report released on Wednesday.
Delinquency rates jumped to 6.5% of balances for loans backed by office properties and to 6.1% for lodging-backed loans.
Delinquencies for loans backed by retail properties remain elevated at 5.0%, matching the rate from the previous quarter and staying elevated since the onset of the pandemic.
About 96.8% of outstanding loan balances were current or less than 30 days late at the end of the third quarter, down from 97.3% at the end of the third quarter of 2023.
U.S. Indexes and Yields
The S&P 500 index decreased 0.8% to 4,730.33, and the Nasdaq Composite fell 1.1% to 14,789.22.
The yield on 2-year Treasury notes increased to 4.29%. 10-year Treasury notes advanced to 4.07%, and 30-year Treasury bonds edged up to 4.29%.
WTI crude oil decreased $0.41 to $71.98 a barrel, and natural gas prices decreased 6 cents to $2.83 a thermal unit.
Gold decreased by $23.68 to $2,004.10 an ounce, and investors debated the future interest rate path.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.40.
U.S. Stock Movers
Charles Schwab decreased 1.3% to $63.51 after the financial services provider reported better-than-expected earnings but revenue fell short of market expectations.
U.S. Bancorp gained 0.3% to $41.49 after the regional bank reported lower-than-expected quarterly earnings.
China-linked stocks continued to drift lower for the second week this year after economic growth in the fourth quarter was below expectations.
JD.com, PDD Holdings, Alibaba Group Holdings, and Tencent Holdings declined between 4% and 6%.
European Markets Fall After Near-term Rate-cut Hopes Faded
Stock market sentiment in Europe turned negative after policymakers in the region pushed back against the timing of rate cuts.
Moreover, market sentiment was weak at the opening after China's GDP in the fourth quarter expanded at a slower-than-expected pace of 5.2% in the fourth quarter.
China's GDP for 2023 also rose at the same rate of 5.2%, the slowest pace in three decades amid a protracted property crisis, weak consumer spending growth, and global uncertainties.
While China's economy is still growing at a faster rate than the economies of the eurozone and the U.S., growth has steadily declined from as high as 7% enjoyed in the 2010s.
Benchmark indexes in Frankfurt, Paris, and London declined more than 1% on the economic uncertainties and interest rate outlook.
UK Consumer Inflation Accelerated In December
The UK's annual inflation in December rose to 4% from 3.9% in November, the Office for National Statistics reported on Wednesday.
Inflation perked up for the first time in ten months after prices of tobacco and alcohol jumped 12.9% from 10.2%, reflecting a higher duty on tobacco, and recreation and culture inflation advanced to 5.7% from 5.2% in the previous month, respectively.
However, inflation for food and non-alcoholic beverages eased to 8% from 9.2% and for restaurants and hotels to 7% from 7.5%.
Europe Indexes and Yields
The DAX index decreased 0.8% to 16,431.69, the CAC-40 index fell 1.1% to 7,318.69, and the FTSE 100 index dropped 1.5% to 7,446.29.
The yield on 10-year German bonds edged up to 2.23%; French bonds inched higher to 2.76%; the UK gilts edged higher to 3.87%; and Italian bonds increased to 3.84%.
The euro edged lower to $1.087, the British pound inched lower to $1.267, and the U.S. dollar eased to 86.21 Swiss cents.
Brent crude advanced $0.97 to $77.34 a barrel, and the Dutch TTF natural gas decreased by €1.83 to €27.83 per MWh.
Europe Stock Movers
Just Eat Takeaway.com NV decreased 0.4% to 1,139.0 pence in a weak market after the food delivery company lifted its full-year core profit outlook.
Enel SpA declined 1.9% to €6.62 after the company launched a €1.75 billion bond offering.
Antofagasta plc declined 2.6% to 1,579.50 pence after the mining company released its annual production estimates.
Wizz Air Holdings fell 3.4% to 1,952.14 pence after the discount airline said it would pay an additional £1.2 million to customers in compensation.
Renault SA dropped 1.8% to €33.85 in a weak market, and the automaker reported a rise in global sales volume.
Luxury fashion houses with significant sales in China declined after China's economy expanded at the slowest pace in nearly three decades.
Kering SA declined 2.6% to €349.55, LVMH dropped 2% to €652.90, and Hermes International fell 1.1% to €1,805.20.
888 Holdings PLC dropped 7.4% to 75.03 pence after the international sports betting and gambling company reported weak revenue in the fourth quarter and fiscal 2023.
Asian Stocks Under Pressure
Stocks in Asia dropped sharply after China reported weaker-than-expected GDP growth and Iran launched drone strikes in Pakistan, Syria, and Iraq as the Israel-Hamas war spiraled into a wider war in the Middle East.
The Nikkei index in Tokyo edged up 0.2% to 35,671.79, the ASX index in Sydney fell 0.3% to 7,393.10, and the KOSPI index dropped 2.3% to 2,440.10.
Hong Kong Stocks Drop 3% After China Growth Falls Short of Expectations
Market indexes in China declined sharply after a government report showed the economy expanded at a slower-than-expected pace and home prices fell.
The weaker-than-expected growth rate raised the prospect of downward earnings revisions.
The Hang Seng Index in Hong Kong plunged 3.2% to 15,362.56, and the CSI 300 index dropped 1% to 3,268.69.
GDP in the fourth quarter expanded 5.2% from the previous year and rose at the same rate in the full-year 2023, the National Bureau of Statistics reported Wednesday.
The economy accelerated in the fourth quarter after expanding by 4.9% in the third quarter.
In full-year 2023, the economy expanded at a faster pace than the 3% increase in 2022, but expectations of faster growth at the start of the year ran high.
Protracted property market slumps and weak growth in consumer spending held back the economy from recovering from the pandemic era.
Economists and investors were anticipating China's economy to expand at a faster pace of 5.3% to 5.5% in the fourth quarter.
Retail sales in December rose 7.4% from a year ago, and industrial output accelerated to 6.8% in the month from 6.6% in the prior month, the statistics bureau noted in separate reports released Wednesday.
New home prices in major cities in mainland China declined by 0.45% from the previous month, the sharpest decline since February 2015.
Alibaba Group, Tencent, and JD.com declined between 3% and 4%, and property developers extended losses of 4% after new home prices fell.
Longfor Group, China Resources Land, and China Overseas Land declined between 4% and 6%.
India Stocks Drop 2% After Iran Attacked Pakistan
Iran conducted a "combination of missiles and drone strikes" targeting bases belonging to the Jaysh al-Dhulm, also known as the Jeysh al-Adl terrorist group, on Tuesday.
Iran said in mid-December that Jaish al-Adl stormed a police station in Sistan and Balouchestan province’s city of Rask, southeast of Iran, killing 11 Iranian police forces, according to Iran's state-aligned Tasnim news agency report today.
On Monday, Iran launched missile attacks in northern Iraq and Syria, and Iran-backed Houthi rebels stepped up their attacks in the Red Sea.
The prospect of a wider war disrupting crude oil supplies and merchant ship passage in the Red Sea kept investors in India and Asia on edge.
In Mumbai trading, the Nifty and Sensex indexes dropped as much as 1% in early trading after Iran conducted strikes in the southwest Baluchistan province of Pakistan.
The Nikkei index in Tokyo edged up 0.2% to 35,671.79, the ASX index in Sydney fell 0.3% to 7,393.10, and the KOSPI index dropped 2.3% to 2,440.10.
- Scott Peters
- 17 Jan, 2024
- New York City
Charles Schwab decreased 1.3% to $63.51 after the financial services provider reported better-than-expected earnings but revenue fell short of market expectations.
Net revenue in the fourth quarter declined 19% to $4.5 billion from $5.5 billion, net income dropped 47% to $1.1 billion from $1.98 billion, and diluted earnings per share fell to 51 cents from 97 cents a year ago.
The company added 3.8 million net new accounts and increased its total client base to 34.8 million.
U.S. Bancorp gained 0.3% to $41.49 after the regional bank reported lower-than-expected quarterly earnings.
Total net revenue increased 6.7% to $6.7 billion from $6.4 billion, net income declined 7.4% to $861 million from $930 million, and diluted earnings per share dropped to 49 cents from 57 cents a year ago.
The common equity tier 1 capital ratio rose to 9.9% at the end of the December quarter from 9.7% at the end of the September quarter.
Average total deposit growth was 4.3% and average total loan growth was 3.6% from a year ago, respectively.
China-linked stocks continued to drift lower for the second week this year after economic growth in the fourth quarter was below expectations.
JD.com, PDD Holdings, Alibaba Group Holdings, and Tencent Holdings declined between 4% and 6%.
Tesla decreased 1.9% to $215.75 after the electric vehicle maker lowered the price of its model Y in Germany.
- Barry Adams
- 17 Jan, 2024
- New York City
U.S. stock extended yesterday's losses in pre-market trading, and investors confront multiple headwinds.
The S&P 500 index and the Nasdaq Composite futures declined 0.4%, and investors reassessed their rate-cut outlook after policymakers in the U.S. and Europe pushed back against expectations.
Moreover, the prospect of a wider war in the Middle East also sapped market enthusiasm after Iran launched missile attacks in Syria, Iraq, and Pakistan.
Houthi rebels backed by Iran also continued their attacks on merchant ships traveling through the Red Sea, forcing most shipping companies to divert shipments along the coast of Africa, increasing costs and shipment times.
China reported the slowest economic growth in nearly three years, and GDP expanded at a slower-than-expected 5.2% in 2023, following the growth of 3.0% in 2022.
China's retail sales growth of 7.0% fell short of market expectations, but industrial output accelerated to 6.8%, reaching a 22-month high in December.
China-exposed stocks traded down after the release of economic updates, and the Hang Seng index plunged 3.5% in Wednesday's trading.
Tesla declined 1.5% after the company lowered the price of its model Y in Germany, and Alibaba fell 3%.
U.S. Retail Sales Advanced In December
Retail sales, adjusted for seasonal and calendar factors but not price changes, increased 5.6% from a year ago in December, the U.S. Census Bureau reported Wednesday.
Retail sales rose the most in eleven months, following a downwardly revised 4% rise in November.
Retail sales, unadjusted for price changes or inflation, increased 3.2% in the full year 2023.
U.S. Mortgage Applications Rebound
Mortgage applications surged 10.4% in the week ending January 12, faster than 9.9% in the previous week, the Mortgage Bankers Association reported Wednesday.
Mortgage applications to purchase a new home jumped 9% from the 6% increase the previous week, and applications to refinance a home loan advanced by 11% as lower rates lured home buyers back to the market.
The average contract rate for 30-year fixed-rate mortgages with loan balances of less than $726,200 decreased to 6.75% from 6.81% with a down payment of 20% and points rising to 0.62 from 0.61.
Commercial Property Mortgage Delinquency Rate Advanced
The delinquency rate for mortgages backed by commercial properties rose in the fourth quarter of 2023, MBA reported in a separate report released on Wednesday.
Delinquency rates jumped to 6.5% of balances for loans backed by office properties and to 6.1% for lodging-backed loans.
Delinquencies for loans backed by retail properties remain elevated at 5.0%, matching the rate from the previous quarter and staying elevated since the onset of the pandemic.
About 96.8% of outstanding loan balances were current or less than 30 days late at the end of the third quarter, down from 97.3% at the end of the third quarter of 2023.
U.S. Indexes and Yields
The S&P 500 index decreased 0.4% to 4,773.12, and the Nasdaq Composite fell 0.7% to 14,843.08.
The yield on 2-year Treasury notes increased to 4.29%. 10-year Treasury notes advanced to 4.07%, and 30-year Treasury bonds edged up to 4.29%.
WTI crude oil decreased $1.40 to $71.03 a barrel, and natural gas prices decreased 11 cents to $2.78 a thermal unit.
Gold increased by $0.02 to $2,027.65 an ounce, and investors debated the future interest rate path.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.40.
U.S. Stock Movers
Charles Schwab decreased 1.3% to $63.51 after the financial services provider reported better-than-expected earnings but revenue fell short of market expectations.
U.S. Bancorp gained 0.3% to $41.49 after the regional bank reported lower-than-expected quarterly earnings.
China-linked stocks continued to drift lower for the second week this year after economic growth in the fourth quarter was below expectations.
JD.com, PDD Holdings, Alibaba Group Holdings, and Tencent Holdings declined between 4% and 6%.
- Inga Muller
- 17 Jan, 2024
- New York City
European markets declined more than 1% after rate-cut hopes receded, China's GDP growth slowed to a three-decade low, and the prospect of a regional war in the Middle East rose after Iran stepped up attacks.
The DAX index decreased 1.1% to 16,397.04, the CAC-40 index fell 1.1% to 7,314.56, and the FTSE 100 index dropped 1.6% to 7,433.07.
The yield on 10-year German bonds edged up to 2.23%; French bonds inched higher to 2.76%; the UK gilts edged higher to 3.87%; and Italian bonds increased to 3.84%.
Just Eat Takeaway.com NV decreased 0.4% to 1,139.0 pence in a weak market after the food delivery company lifted its full-year core profit outlook.
Enel SpA declined 1.9% to €6.62 after the company launched a €1.75 billion bond offering.
Antofagasta plc declined 2.6% to 1,579.50 pence after the mining company released its annual production estimates.
Wizz Air Holdings fell 3.4% to 1,952.14 pence after the discount airline said it would pay an additional £1.2 million to customers in compensation.
Renault SA dropped 1.8% to €33.85 in a weak market, and the automaker reported global sales volume rose 9% from a year ago to 2.23 million in 2023.
In the year, passenger car sales increased 6.9% from a year ago to 1.83 million and light commercial vehicle sales soared 20% to 397,594 vehicles.
In France, Renault brand passenger car sales jumped 18% to 277,914 sales and light commercial vehicle sales advanced 13% to 112,569.
Luxury fashion houses with significant sales in China declined after China's economy expanded at the slowest pace in nearly three decades.
Kering SA declined 2.6% to €349.55, LVMH dropped 2% to €652.90, and Hermes International fell 1.1% to €1,805.20.
888 Holdings PLC dropped 7.4% to 75.03 pence after the international sports betting and gambling company reported weak revenue in the fourth quarter and fiscal 2023.
- Bridgette Randall
- 17 Jan, 2024
- Frankfurt
Stock market sentiment in Europe turned negative after policymakers in the region pushed back against the timing of rate cuts.
Moreover, market sentiment was weak at the opening after China's GDP in the fourth quarter expanded at a slower-than-expected pace of 5.2% in the fourth quarter.
China's GDP for 2023 also rose at the same rate of 5.2%, the slowest pace in three decades amid a protracted property crisis, weak consumer spending growth, and global uncertainties.
While China's economy is still growing at a faster rate than the economies of the eurozone and the U.S., growth has steadily declined from as high as 7% enjoyed in the 2010s.
Benchmark indexes in Frankfurt, Paris, and London declined more than 1% on the economic uncertainties and interest rate outlook.
UK Consumer Inflation Accelerated In December
The UK's annual inflation in December rose to 4% from 3.9% in November, the Office for National Statistics reported on Wednesday.
Inflation perked up for the first time in ten months after prices of tobacco and alcohol jumped 12.9% from 10.2%, reflecting a higher duty on tobacco, and recreation and culture inflation advanced to 5.7% from 5.2% in the previous month, respectively.
However, inflation for food and non-alcoholic beverages eased to 8% from 9.2% and for restaurants and hotels to 7% from 7.5%.
Europe Indexes and Yields
The DAX index decreased 1.1% to 16,397.04, the CAC-40 index fell 1.1% to 7,314.56, and the FTSE 100 index dropped 1.6% to 7,433.07.
The yield on 10-year German bonds edged up to 2.23%; French bonds inched higher to 2.76%; the UK gilts edged higher to 3.87%; and Italian bonds increased to 3.84%.
The euro edged lower to $1.087, the British pound inched lower to $1.267, and the U.S. dollar eased to 86.21 Swiss cents.
Brent crude advanced $1.67 to $76.64 a barrel, and the Dutch TTF natural gas decreased by €0.80 to €28.86 per MWh.
Europe Stock Movers
Just Eat Takeaway.com NV decreased 0.4% to 1,139.0 pence in a weak market after the food delivery company lifted its full-year core profit outlook.
Enel SpA declined 1.9% to €6.62 after the company launched a €1.75 billion bond offering.
Antofagasta plc declined 2.6% to 1,579.50 pence after the mining company released its annual production estimates.
Wizz Air Holdings fell 3.4% to 1,952.14 pence after the discount airline said it would pay an additional £1.2 million to customers in compensation.
Renault SA dropped 1.8% to €33.85 in a weak market, and the automaker reported a rise in global sales volume.
Luxury fashion houses with significant sales in China declined after China's economy expanded at the slowest pace in nearly three decades.
Kering SA declined 2.6% to €349.55, LVMH dropped 2% to €652.90, and Hermes International fell 1.1% to €1,805.20.
888 Holdings PLC dropped 7.4% to 75.03 pence after the international sports betting and gambling company reported weak revenue in the fourth quarter and fiscal 2023.
- Arjun Pandit
- 17 Jan, 2024
- Mumbai
Stocks in Asia dropped sharply after China reported weaker-than-expected GDP growth and Iran launched drone strikes in Pakistan, Syria, and Iraq as the Israel-Hamas war spiraled into a wider war in the Middle East.
Market indexes in China declined sharply after a government report showed the economy expanded at a slower-than-expected pace and home prices fell.
The weaker-than-expected growth rate raised the prospect of downward earnings revisions.
The Hang Seng Index in Hong Kong plunged 3.2% to 15,362.56, and the CSI 300 index dropped 1% to 3,268.69.
GDP in the fourth quarter expanded 5.2% from the previous year and rose at the same rate in the full-year 2023, the National Bureau of Statistics reported Wednesday.
The economy accelerated in the fourth quarter after expanding by 4.9% in the third quarter.
In full-year 2023, the economy expanded at a faster pace than the 3% increase in 2022, but expectations of faster growth at the start of the year ran high.
Protracted property market slumps and weak growth in consumer spending held back the economy from recovering from the pandemic era.
Economists and investors were anticipating China's economy to expand at a faster pace of 5.3% to 5.5% in the fourth quarter.
Retail sales in December rose 7.4% from a year ago, and industrial output accelerated to 6.8% in the month from 6.6% in the prior month, the statistics bureau noted in separate reports released Wednesday.
New home prices in major cities in mainland China declined by 0.45% from the previous month, the sharpest decline since February 2015.
Alibaba Group, Tencent, and JD.com declined between 3% and 4%, and property developers extended losses of 4% after new home prices fell.
Longfor Group, China Resources Land, and China Overseas Land declined between 4% and 6%.
Iran conducted a "combination of missiles and drone strikes" targeting bases belonging to the Jaysh al-Dhulm, also known as the Jeysh al-Adl terrorist group, on Tuesday.
Iran said in mid-December that Jaish al-Adl stormed a police station in Sistan and Balouchestan province’s city of Rask, southeast of Iran, killing 11 Iranian police forces, according to Iran's state-aligned Tasnim news agency report today.
On Monday, Iran launched missile attacks in northern Iraq and Syria, and Iran-backed Houthi rebels stepped up their attacks in the Red Sea.
The prospect of a wider war disrupting crude oil supplies and merchant ship passage in the Red Sea kept investors in India and Asia on edge.
In Mumbai trading, the Nifty and Sensex indexes dropped as much as 1% in early trading after Iran conducted strikes in the southwest Baluchistan province of Pakistan.
The Nikkei index in Tokyo edged up 0.2% to 35,671.79, the ASX index in Sydney fell 0.3% to 7,393.10, and the KOSPI index dropped 2.3% to 2,440.10.
- Arun Goswami
- 17 Jan, 2024
- Mumbai
Stocks in Mumbai dropped sharply on the worries of a wider war in the Middle East after Iran stepped up attacks on its neighbors and Houthi rebels continued their attacks on merchant ships in Red Sea lanes.
The Sensex index decreased 1,062.91 points to 72,065.86, and the Nifty index fell 293.80 points to 21,739.90.
On the Mumbai stock exchange, 112 stocks traded at their 52-week highs and 13 stocks traded at their 52-week lows.
HDFC Bank declined 5.7% to ₹1,582.25 after the largest private sector bank reported a weaker-than-expected quarterly profit.
Net income in the December quarter rose 34% to ₹16,373 crore, and net interest margin jumped 24% to ₹28,471 crore, missing the market estimate.
L&T Technology Service said consolidated operating revenue increased 12% to 2,422 crore and net income advanced to 336 crore from 297 crore a year ago.
ICICI Securities declined 2.5% to ₹764.95 after the brokerage firm reported quarterly results.
Revenue in the December quarter rose 50% to ₹1,322 crore, and net income soared 67% to ₹465 crore from a year ago, respectively.
ICICI Lombard General Insurance increased 6% to ₹1,458.55 after the company reported a sharp jump in premiums and investment income.
Net premium in the December quarter increased 13.5% from a year ago to ₹4,305 crore, and net profit rose 22.4% from a year ago to ₹431 crore.
TV18 Broadcast jumped 8.8% to ₹66.10 after the company swung to net profit in the latest quarter after the company stepped up investment in digital and sports channels.
Consolidated revenue in the December quarter decreased 5.2% to ₹1,676.19 crore, and the company suffered a loss of ₹55.83 crore compared to a profit of ₹37.81 crore a year ago.
PNC Infratech advanced 1.8% to ₹412.55 after the company received a 1,174 crore order from a Madhya Pradesh government agency for several projects.
Larsen & Toubro increased 0.5% to ₹3,593.90 after the company said it won several significant orders in India, including a railway electrification project worth at least ₹10,000 crore and orders from a private company in Oman.