Market Update
Europe Movers: French Bank, Landore, Legal & General, Rentokil, Skanska
Inga Muller
12 Jun, 2024
Frankfurt
European stocks and bonds rebounded after a two-day selloff following Sunday's European Parliament election results.
French bond yields remained under pressure after the French president dissolved parliament and announced a surprise election that could lead to political gridlock until the next presidential election in 2027.
The DAX index increased by 0.6% to 18,471.95; the CAC-40 index rose by 0.4% to 7,818.58; and the FTSE 100 index advanced by 0.6% to 8,196.35.
The yield on 10-year German bonds edged lower to 2.60%. French bonds inched lower to 3.20%; the UK gilts edged lower to 4.25%; and Italian bonds decreased to 4.03%.
French banks rebounded after two days of selloffs, and bond yields recovered.
Societe Generale gained 0.9% to €23.08, Credit Agricole rose 2.4% to €13.90, and BNP Paribas advanced 1.7% to €61.79.
Legal & General declined 5% to 230.89 pence after the newly appointed chief executive launched a restructuring plan to focus on three core units.
Rentokil Initial plc soared 12.3% to 466.40 pence after activist investor Trian Fund Management acquired a substantial stake in the company.
Skanska AB jumped 0.7% to SEK 186.90 after the Swedish construction company sold its multi-family rental business in Denmark to NREP for about 737 million Danish kroner, or 1.1 billion Swedish kronor.
Landore Resource surged 33% to 3.80 pence after the gold mining company secured £3.7 million to expand its gold project in Northwestern Ontario, Canada.
The BAM Gold Project, an early-stage development project, spanning 30,507 hectares is estimated to have at least one million ounces of gold deposits.
The company sold 153.47 million shares at a price of 2.40 pence per share in a two-tranche offering to investors, representing 49.56% of the enlarged share capital.
European Markets Halted a two-day Selloff, French Politics In Uncharted Territory
Bridgette Randall
12 Jun, 2024
Frankfurt
European stock market indexes and bonds in the eurozone rebounded after two days of losses following France's surprise election announcement.
The euro held firm for the second day in active trading as investors still assessed the impact of French President Macron's surprise announcement of the parliamentary election.
The risky move threw French politics into turmoil and raised the prospect of the opposition winning control of the parliament, causing legislative gridlock and slowing down progress in lowering the government's debt.
The results of the European Union election on Sunday showed the far-right political parties winning more seats, but the three leading blocs—the EPP, Renew Europe, and S&D—retained majority control after winning 407 of the 720 seats.
However, the shift to the right led to political upheaval in France, Germany, Austria, and Belgium.
French President Emmanuel Macron dissolved the parliament after the far-right National Rally Party garnered 31.5% of votes, more than 15.2% won by Macron's Renaissance party.
On the economic front, Germany's inflation rose for the first time in five months, as initially estimated, Destatis confirmed Wednesday.
Consumer price inflation in May accelerated to 2.4% from a stable 2.2% in April, which was the lowest level in three years.
Europe Indexes and Yields
The DAX index increased by 0.6% to 18,471.95; the CAC-40 index rose by 0.4% to 7,818.58; and the FTSE 100 index advanced by 0.6% to 8,196.35.
The yield on 10-year German bonds edged lower to 2.60%. French bonds inched lower to 3.20%; the UK gilts edged lower to 4.25%; and Italian bonds decreased to 4.03%.
The euro edged higher to $1.075; the British pound inched higher to $1.275; and the U.S. dollar weakened to 89.58 Swiss cents.
Brent crude decreased $0.77 to $81.68 a barrel, and the Dutch TTF natural gas rose by €1.08 to €35.22 per MWh.
Europe Stock Movers
French banks rebounded after two days of selloffs, and bond yields recovered.
Societe Generale gained 0.9% to €23.08, Credit Agricole rose 2.4% to €13.90, and BNP Paribas advanced 1.7% to €61.79.
Legal & General declined 5% to 230.89 pence after the newly appointed chief executive launched a restructuring plan to focus on three core units.
Rentokil Initial plc soared 12.3% to 466.40 pence after activist investor Trian Fund Management acquired a substantial stake in the company.
Skanska AB jumped 0.7% to SEK 186.90 after the Swedish construction company sold its multi-family rental business in Denmark to NREP for about 737 million Danish kroner, or 1.1 billion Swedish kronor.
Landore Resource surged 33% to 3.80 pence after the gold mining company secured £3.7 million to expand its gold project in Northwestern Ontario, Canada.
The BAM Gold Project, an early-stage development project, is estimated to have at least one million ounces of gold deposits.
The company sold 153.47 million shares at a price of 2.40 pence per share in a two-tranche offering to investors, representing 49.56% of the enlarged share capital.
Japan's Producer Price Inflation Accelerates Fourth Consecutive Month, Stoking Fears of a Pick Up in Consumer Inflation
Akira Ito
12 Jun, 2024
Tokyo
Benchmark indexes in Tokyo traded down on Wednesday, trimming gains from the week and erasing gains from the previous session.
The Nikkei and the Topix indexes dropped more than 0.5% as investors reviewed the latest update on producer price inflation.
Producer price inflation rose 2.4% in May and accelerated for the fourth month in a row, the Bank of Japan reported on Wednesday.
Investors turned cautious after the annual pace of factory-gate price inflation rose faster than expected, stoking fears of an acceleration in consumer price inflation.
Producer price inflation was positive for the 40th month in a row, indicating manufacturers are passing higher raw material prices on to consumers.
Investors were also cautious ahead of the U.S. Federal Reserve's monetary policy decisions later in the day, and the central bank is widely anticipated to hold its interest rate range steady between 5.25% and 5.5%.
The Japanese yen weakened to 157.23 against the U.S. dollar, and the yield on a 10-year Japanese government bond stayed below 1% at 0.98%.
Japan Stock Movers
The Nikkei 225 stock average declined 0.5% to 38,913.50, and the Topix index fell 0.7% to 2,756.88.
Banks, tech companies, and vehicle makers were among the leading decliners.
Mitsubishi UFJ, Mizuho Financial Group, and Sumitomo Mitsubishi declined between 0.5% and 1.5%.
Softbank, Advantest, Tokyo Electron, and Screen Holdings traded mixed and ranged between a decline of 0.3% and a gain of 0.2%.
Toyota Motor decreased 1.4% to ¥3,208.0, Honda Motor rose 0.1% to ¥1,710.0, and Nissan Motor fell 0.1% to ¥545.30.
China Deflation Worries Keep Indexes In Hong Kong and Shanghai Down
Li Chen
12 Jun, 2024
Hong Kong
Market indexes in Shanghai and Hong Kong traded down after the release of inflation data.
Consumer price inflation rose for the fourth month in a row in May, but the increase of 0.3% in May fell short of market expectations.
On a monthly basis, inflation decreased 0.1% after rising 0.1% in April, indicating persistent demand weakness amid a protracted property market slump and fragile economic recovery.
The annual pace of retail inflation was steady, but food price inflation fell for the 11th month in a row, the National Bureau of Statistics reported on Wednesday.
Core inflation, which excludes food and energy prices, rose 0.6% from a year ago, compared to a 0.7% rise in April.
In a separate report, the statistics bureau said producer price inflation declined 1.4% in May after falling at a 2.5% annual rate in April.
The factory-gate prices fell for the 20th month in a row and fell at the slowest pace since February 2023, amid persistent domestic demand weakness and rising job market uncertainty outside of the top three cities.
Over the first five months, producer price inflation dropped 2.4% from a year ago, and the prices are expected to remain weak for the rest of the year.
China Stock Movers
The CSI 300 index decreased 0.2% to 3,536.85, and the Hang Seng index dropped 1.5% to 17,913.10.
The Hang Seng index extended losses to 9% from the peak last month, as the market rally appears to lose steam amid a lack of consistent policy support and an ongoing decline in the residential property market.
Tech stocks traded lower amid broad market weakness, and Tencent Holdings declined 0.6% to HK$371.20 and Alibaba Group fell 0.9% to HK$74.15.
Real estate developers were under pressure ahead of the U.S. Federal Reserve's monetary policy decisions at 2:00 p.m. ET later today.
The Federal Reserve is widely anticipated to hold the Fed Funds rate range between 5.25% and 5.50%, and the central bank is likely to signal higher rates for the rest of the year.
Hong Kong monetary policy moves in sync with U.S. announcements because the Hong Kong dollar is linked to the U.S. dollar.
Higher interest rates for longer are likely to dampen demand for new properties in Hong Kong, amid an ongoing economic slowdown and elevated home prices in the city.
China Vanke declined 0.9% to HK$5.45, China Resources Land dropped 2.9% to HK$26.70, and Sun Hung Kai fell 1.1% to HK$71.95.
Wuhan Dameng Database, the database developer for banks and state-owned power entities' stock soared nearly 190% on the first day of trading after the company priced its initial offering at 250 yuan per share.
Tencent-backed QuantumPharm priced its initial public offering at HK$5.28 and raised HK$989.3 million ahead of its listing on Thursday.
The public offering of artificial intelligence-based drug research service provider was oversubscribed by 75 times.
India Movers: Cipla, Patanjali Foods, Tube Investments, TVS Supply Chain
Arun Goswami
12 Jun, 2024
Mumbai
Market indexes advanced in Mumbai's trading as investors awaited the release of industrial output and consumer price inflation data.
The Sensex index increased by 0.4% to 76,743.39, and the Nifty index rose by 0.4% to 23,353.70.
On the Mumbai stock exchange, 65 stocks traded at their 52-week highs, and 6 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds inched higher to 7.03%, and the Indian rupee edged higher at ₹83.48 against the U.S. dollar.
Cipla increased 0.8% to ₹1,542.45, and the generic pharmaceutical company lost a preliminary appeal in a court in Patna, Bihar, for a tax credit. The company said it plans to appeal the decision.
Patanjali Foods gained 1.3% to ₹1,492.40, and the food and vitamin supplement maker said it plans to acquire the nonfood business of Patanjali Ayurved Ltd.
The company's proposal will be reviewed by a committee of independent board members, and the committee may seek external help in determining the valuation for the proposed transaction.
TVS Supply Chain Solutions jumped 7.1% to ₹180.69, and the company said it signed a five-year agreement with Daimler Truck South East Asia Pte Ltd. for an integrated supply chain solution service in Singapore.
Tube Investments of India jumped 1.4% to ₹180.69, and the company signed an agreement with South Asia Growth Invest III LLC and South Asia EBT Trust III LLC to facilitate the sale of ₹160 crore convertible preference shares.
Elevate Inflation Data May Upend the Fed's Narrative of Restrictive Rates
Alexander Garcia
11 Jun, 2024
Miami
Stocks lacked direction as the Federal Reserve policymakers kicked off a two-day meeting.
Stocks were in a holding pattern in early trading on Tuesday as investors awaited rate decisions and consumer price inflation data on Wednesday.
The S&P 500 index and the Nasdaq Composite lacked direction, and investors looked forward to the release of the Fed's monetary policy decision on Wednesday.
The Federal Reserve is widely anticipated to hold the Fed Funds rate range between 5.25% and 5.50% after the two-day policy meeting that starts today.
Investors are hoping that in the subsequent press conference, Fed Chairman Jerome Powell's comments and answers may provide deeper insights into future rate paths and possible rate cut timing.
Investors have lowered rate cut expectations to only one cut at the end of the September meeting, from the expectations of four rate cuts at the start of the year.
The Federal Reserve has raised rates eleven times in 2022 and 2023, but inflation has still remained above the Fed's target rate of 2%.
The Fed's rate hikes have clearly not slowed the economy; labor market conditions are moderating but still tight, and wages are still rising at a significantly faster rate of 4%.
Fed policymakers talk tough, but when it comes to fighting inflation, they take a softer and slower approach.
While policymakers are promoting the Fed's goal of price stability in public discourse, over the last four years, home prices have surged more than 100% in the fifty largest metropolitan areas, food prices have more than doubled, and the cost of most services is running ahead by 50% or more.
The Federal Reserve has no plans to bring down these skyrocketing prices of shelter and food, which have severely hit the hard-earned pockets of most families.
The Federal Reserve needs better and more advanced tools than a mere change in interest rate to tackle inflation, which was created in the first place by the central bank's reckless money printing during the COVID-19 pandemic.
U.S. Indexes and Treasury Yields
The S&P 500 index decreased 0.2% to 5,352.22, and the Nasdaq Composite rose 0.2% to 17,240.55.
The yield on 2-year Treasury notes edged lower to 4.85%, 10-year Treasury notes decreased to 4.44%, and 30-year Treasury bonds edged higher to 4.58%.
WTI crude oil increased $0.40 to $78.14 a barrel, and natural gas prices rose 16 cents to $3.07 a thermal unit.
Gold increased by $1.04 to $2,310.94 an ounce, and silver was down 55 cents to $29.16.
The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 105.30.
U.S. Stock Movers
General Motors jumped 1.4% to $48.34 after the company's board authorized a $6 billion stock repurchase plan.
Eli Lilly jumped 2.4% to $887.0 after a panel of FDA advisors recommended the approval of the company's drug to treat Alzheimer, donanemab.
Oracle Corp. declined 1.2% to $124.12 ahead of the software and database developer's quarterly results after the close of regular trading.
DXC Technology jumped 2.3% to $18.88 on a report that Apollo Global and Kyndryl Holdings are nearing a bid between $22 and $25 a share for the company.
The news was first reported by Reuters and could not be independently verified.
Cognizant traded down 1% to $66.25, and the company agreed to acquire Cincinnati-based Belcan for $1.3 billion in cash and stock.
European Markets Drop for the Second Day Amid Growing Political Turmoil in France and Germany
Rising political uncertainty and France's snap election announcement added to market anxieties in European trading.
Benchmark indexes in Paris, London, and Frankfurt declined for the second day in a row and extended 2-day losses to nearly 2%.
Far-right parties showed significant gains in the European Union parliament election, but leading mainstream parties retained the dominant position in this Sunday's election.
However, extreme right-wing parties in Germany, Austria, and France won a significant proportion of votes, signaling voter displeasure with the established parties.
The protest votes were largely about the failure of the governments in Germany and France to tackle economic stagnation, ineffective policies to stem rising immigration, and the high cost of living.
In a surprise move, French President Emmanuel Macron announced the dissolution of the parliament after the far-right National Rally Party won more than 30% of votes, twice as many as Macron's Renaissance Party.
President Macron's move is widely seen in French political circles as a risky gamble that could lead to a shift of power in parliament and significantly hinder the domestic economic and political agenda.
France will hold two-round national assembly elections on June 30 and July 7, just weeks before the start of the Olympic Games in Paris.
The French government's bond yield jumped to a 20224's high of 3.30% amid rising uncertainty.
Europe Indexes and Yields
The DAX index decreased by 0.7% to 18,369.94; the CAC-40 index fell by 1.3% to 7,789.21; and the FTSE 100 index declined by 0.95% to 8,147.81.
The yield on 10-year German bonds edged higher to 2.66%. French bonds inched higher to 3.30%; the UK gilts edged lower to 4.29%; and Italian bonds inched higher to 4.13%.
The euro edged higher to $1.074; the British pound inched higher to $1.274; and the U.S. dollar weakened to 89.65 Swiss cents.
Brent crude decreased $0.37 to $82.01 a barrel, and the Dutch TTF natural gas fell by €0.21 to €34.21 per MWh.
Europe Stock Movers
Rio Tinto declined 2.5% to 5,223.0 pence after the Anglo-Australian mining company agreed to acquire Mitsubishi Corp.'s 11.65% stake in Boyne Smelters for an undisclosed amount.
Societe Generale declined 2.9% to €23.39 on reports that the French lender is struggling to sell its securities services unit.
Senior plc gained 1.1% to 160.0 pence after the maker of high-tech components for aerospace and defense equipment received several orders from Collins Aerospace.
FirstGroup rose 1.1% to 169.90 pence after the private railroad and bus service operator reported a decline in annual revenue.
Revenue in the fiscal year 2024 ending in March declined to £4.71 billion from £4.76 billion, adjusted operating profit rose to £202.4 million from £154.0 million, and adjusted earnings per share rose to 16.4 pence from 10.7 pence a year ago.
The increase in adjusted operating profit was driven by one extra week of trading and higher accrued variable fees in Frist Rail.
The company reiterated its fiscal year 2025 outlook and confirmed its plans to complete the share buyback before financing any new growth initiatives.
Atos SE decreased 11.4% to €1.01 after the French information technology company selected a financial restructuring proposal led by Onepoint, Butler Industries, and Econocom.
Yen Approached Recent Low and JGB Yield Rebounded Above 1% Ahead of BoJ's Rate Decisions
Benchmark indexes in Tokyo extended gains for the second day in a row, tracking gains in tech stocks in overnight trading in New York.
The Nikkei 225 and the Topix indexes diverged in lackluster trading, and tech stocks powered the market advance in Tuesday's trading.
The yen weakened to 157.25 against the U.S. dollar, and the yield on a 10-year Japanese government bond rebouned to 1.02% ahead of the Bank of Japan's monetary policy decisions on Thursday.
The BoJ is widely expected to hold rates steady and continue its purchase of Japanese government bonds, fueling another leg down in the yen.
The U.S. Federal Reserve is expected to hold its interest rate range steady between 5.25% and 5.50%, and the central bank is also likely to cool down rate expectations further.
The wide yield differential between the U.S. and Japan is likely to persist as the Bank of Japan shows no interest in lifting near-zero rates, despite the cost of rising imports.
The persistent yield gap is also putting additional pressure on the yen, and currency traders are bracing for the price to range between 165 and 170 before the year's end.
Japan Stock Movers
The Nikkei 225 Stock Average increased 0.2% to 39,098.62, and the Topix index fell 0.2% to 2,776.43.
Tech stocks led the gainers for the second day in a row, and Tokyo Electron, Advantest, Screen Holdings, and Socionext gained between 0.3% and 1.2%.
However, Softbank bucked the trend and edged lower by 0.6% to ¥9,666.0.
Automotive stocks lacked direction after investors looked for bargains in the beaten-down sector after a certification scandal engulfed the vehicle makers.
Toyota Motor decreased 0.5% to ¥3,254.0, Honda Motor was unchanged at ¥1,708.0, and Nissan Motor edged up 0.05% to ¥545.40.
Banks were in focus in active trading ahead of the Bank of Japan's rate decisions on Thursday.
Mitsubishi UFJ decreased 1.0.2% to ¥1,632.50, Sumitomo Mitsui declined 0.8% to ¥10,280.0, and Mizuho Financial fell 0.2% to ¥3,141.0.
Taiyo Yuden Company, the materials and electronics engineering company, advanced 3.3% to ¥3,576.0, and Ebara, the maker of turbines and pumps, increased 3.4% to ¥12,165.0.
Eisai Company decreased 3.3% to ¥6,649.0.
China Indexes Extended Downward Trend Ahead of Inflation Data
Market indexes in Shanghai and Hong Kong traded lower as investors set aside rate-cut expectations in the U.S. and China.
The CSI 300 and the Hang Seng indexes declined and trimmed this year's gains after property market worries and an uneven economic rebound overwhelmed market sentiment.
The Hang Seng index has dropped 8% from its high in May after China's weak import growth suggested weak domestic demand, and the weakness in manufacturing sector growth also contributed to market nervousness.
China is set to announce its inflation data on Wednesday, and economists are anticipating a slight pick-up in inflation, and consumer price inflation in May is likely to accelerate to an annual pace of 0.4% from the 0.3% pace in April.
The U.S. is also set to announce its inflation update on Wednesday, followed by the Federal Reserve releasing its monetary policy decisions and economic projections.
The Federal Reserve is expected to hold steady its interest rate range between 5.25% and 5.50% and provide insights into the possible rate cut later in the year.
Investors have lowered their rate-cut expectations to one from as high as four earlier in the year.
China Stock Movers
The CSI 300 index declined 1.1% to 3,533.97, and the Hang Seng index dropped 1.7% to 18,056.13.
Li Auto declined 4% to HK$74.90, BYD increased 2% to $229.20, and Nio decreased 3.4% to $36.95.
The Bank of China declined 2.7% to HK$3.71, and the and the Industrial and Commercial Bank of China decreased 1.5% to HK$4.35.
Gold mining and jewelry retailers traded down after the People's Bank of China halted its 18-month-long steady purchase of gold.
Zijin Mining Group declined 4.5% to HK$16.66, and Chow Tai Fook Jewellery Group fell 3.5% to HK$9.41.
U.S. Movers: Cognizant, DXC Technology, Eli Lilly, General Motors, Oracle
Scott Peters
11 Jun, 2024
New York City
General Motors jumped 1.4% to $48.34 after the company's board authorized a $6 billion stock repurchase plan.
Eli Lilly jumped 2.4% to $887.0 after a panel of FDA advisors recommended the approval of the company's drug to treat Alzheimer, donanemab.
Oracle Corp. declined 1.2% to $124.12 ahead of the software and database developer's quarterly results after the close of regular trading.
DXC Technology jumped 2.3% to $18.88 on a report that Apollo Global and Kyndryl Holdings are nearing a bid between $22 and $25 a share for the company.
The news was first reported by Reuters and could not be independently verified.
Cognizant Technology traded down 1% to $66.25, and the company agreed to acquire Cincinnati-based Belcan for $1.3 billion in cash and stock.
Caution Prevailed On Wall Street Ahead of Fed Decisions and Comments
Barry Adams
11 Jun, 2024
New York City
Stocks were in a holding pattern in early trading on Tuesday as investors awaited rate decisions and consumer price inflation data on Wednesday.
The S&P 500 index and the Nasdaq Composite lacked direction, and investors looked forward to the release of the Fed's monetary policy decision on Wednesday.
The Federal Reserve is widely anticipated to hold the Fed Funds rate range between 5.25% and 5.50% after the two-day policy meeting that starts today.
Investors are hoping that in the subsequent press conference, Fed Chairman Jerome Powell's comments and answers may provide deeper insights into future rate paths and possible rate cut timing.
Investors have lowered rate cut expectations to only one cut at the end of the September meeting, from the expectations of four rate cuts at the start of the year.
U.S. Indexes and Treasury Yields
The S&P 500 index decreased 0.5% to 5,333.94, and the Nasdaq Composite fell 0.2% to 17,156.27.
The yield on 2-year Treasury notes edged lower to 4.85%, 10-year Treasury notes decreased to 4.44%, and 30-year Treasury bonds edged higher to 4.58%.
WTI crude oil increased $0.14 to $77.84 a barrel, and natural gas prices rose 15 cents to $3.05 a thermal unit.
Gold increased by $5.90 to $2,315.52 an ounce, and silver was down 35 cents to $29.35.
The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 105.30.
U.S. Stock Movers
General Motors jumped 1.4% to $48.34 after the company's board authorized a $6 billion stock repurchase plan.
Eli Lilly jumped 2.4% to $887.0 after a panel of FDA advisors recommended the approval of the company's drug to treat Alzheimer, donanemab.
Oracle Corp. declined 1.2% to $124.12 ahead of the software and database developer's quarterly results after the close of regular trading.
DXC Technology jumped 2.3% to $18.88 on a report that Apollo Global and Kyndryl Holdings are nearing a bid between $22 and $25 a share for the company.
The news was first reported by Reuters and could not be independently verified.
Cognizant traded down 1% to $66.25, and the company agreed to acquire Cincinnati-based Belcan for $1.3 billion in cash and stock.
Europe Movers: Atos, FirstGroup, Rio Tinto, Senior, Societe General
Inga Muller
11 Jun, 2024
Frankfurt
European market indexes declined for the second day in a row amid political turmoil in France and growing uncertainty in Germany.
The DAX index decreased by 0.7% to 18,363.76; the CAC-40 index fell by 0.9% to 7,826.87; and the FTSE 100 index declined by 0.8% to 8,164.06.
The yield on 10-year German bonds edged higher to 2.66%. French bonds inched higher to 3.30%; the UK gilts edged lower to 4.29%; and Italian bonds inched higher to 4.13%.
Rio Tinto declined 2.5% to 5,223.0 pence after the Anglo-Australian mining company agreed to acquire Mitsubishi Corp.'s 11.65% stake in Boyne Smelters for an undisclosed amount.
Societe Generale declined 2.9% to €23.39 on reports that the French lender is struggling to sell its securities services unit.
Senior plc gained 1.1% to 160.0 pence after the maker of high-tech components for aerospace and defense equipment received several orders from Collins Aerospace.
FirstGroup rose 1.1% to 169.90 pence after the private railroad and bus service operator reported a decline in annual revenue.
Revenue in the fiscal year 2024 ending in March declined to £4.71 billion from £4.76 billion, adjusted operating profit rose to £202.4 million from £154.0 million, and adjusted earnings per share rose to 16.4 pence from 10.7 pence a year ago.
The increase in adjusted operating profit was driven by one extra week of trading and higher accrued variable fees in Frist Rail.
The company reiterated its fiscal year 2025 outlook and confirmed its plans to complete the share buyback before financing any new growth initiatives.
Atos SE decreased 11.4% to €1.01 after the French information technology company selected a financial restructuring proposal led by Onepoint, Butler Industries, and Econocom.
European Markets Drop for the Second Day Amid Growing Political Uncertainty in France and Germany
Bridgette Randall
11 Jun, 2024
Frankfurt
Rising political uncertainty and France's snap election announcement added to market anxieties in European trading.
Benchmark indexes in Paris, London, and Frankfurt declined for the second day in a row and extended 2-day losses to nearly 2%.
Far-right parties showed significant gains in the European Union parliament election, but leading mainstream parties retained the dominant position in this Sunday's election.
However, extreme right-wing parties in Germany, Austria, and France won a significant proportion of votes, signaling voter displeasure with the established parties.
The protest votes were largely about the failure of the governments in Germany and France to tackle economic stagnation, ineffective policies to stem rising immigration, and the high cost of living.
In a surprise move, French President Emmanuel Macron announced the dissolution of the parliament after the far-right National Rally Party won more than 30% of votes, twice as many as Macron's Renaissance Party.
President Macron's move is widely seen in French political circles as a risky gamble that could lead to a shift of power in parliament and significantly hinder the domestic economic and political agenda.
France will hold two-round national assembly elections on June 30 and July 7, just weeks before the start of the Olympic Games in Paris.
The French government's bond yield jumped to a 20224's high of 3.30% amid rising uncertainty.
Europe Indexes and Yields
The DAX index decreased by 0.7% to 18,363.76; the CAC-40 index fell by 0.9% to 7,826.87; and the FTSE 100 index declined by 0.8% to 8,164.06.
The yield on 10-year German bonds edged higher to 2.66%. French bonds inched higher to 3.30%; the UK gilts edged lower to 4.29%; and Italian bonds inched higher to 4.13%.
The euro edged higher to $1.074; the British pound inched higher to $1.274; and the U.S. dollar weakened to 89.65 Swiss cents.
Brent crude decreased $0.29 to $81.34 a barrel, and the Dutch TTF natural gas rose by €0.41 to €34.83 per MWh.
Europe Stock Movers
Rio Tinto declined 2.5% to 5,223.0 pence after the Anglo-Australian mining company agreed to acquire Mitsubishi Corp.'s 11.65% stake in Boyne Smelters for an undisclosed amount.
Societe Generale declined 2.9% to €23.39 on reports that the French lender is struggling to sell its securities services unit.
Senior plc gained 1.1% to 160.0 pence after the maker of high-tech components for aerospace and defense equipment received several orders from Collins Aerospace.
FirstGroup rose 1.1% to 169.90 pence after the private railroad and bus service operator reported a decline in annual revenue.
Revenue in the fiscal year 2024 ending in March declined to £4.71 billion from £4.76 billion, adjusted operating profit rose to £202.4 million from £154.0 million, and adjusted earnings per share rose to 16.4 pence from 10.7 pence a year ago.
The increase in adjusted operating profit was driven by one extra week of trading and higher accrued variable fees in Frist Rail.
The company reiterated its fiscal year 2025 outlook and confirmed its plans to complete the share buyback before financing any new growth initiatives.
Atos SE decreased 11.4% to €1.01 after the French information technology company selected a financial restructuring proposal led by Onepoint, Butler Industries, and Econocom.
Yen Approached Recent Low and JGB Yield Rebounded Above 1% Ahead of BoJ's Rate Decisions
Akira Ito
11 Jun, 2024
Tokyo
Benchmark indexes in Tokyo extended gains for the second day in a row, tracking gains in tech stocks in overnight trading in New York.
The Nikkei 225 and the Topix indexes diverged in lackluster trading, and tech stocks powered the market advance in Tuesday's trading.
The yen weakened to 157.25 against the U.S. dollar, and the yield on a 10-year Japanese government bond rebouned to 1.02% ahead of the Bank of Japan's monetary policy decisions on Thursday.
The BoJ is widely expected to hold rates steady and continue its purchase of Japanese government bonds, fueling another leg down in the yen.
The U.S. Federal Reserve is expected to hold its interest rate range steady between 5.25% and 5.50%, and the central bank is also likely to cool down rate expectations further.
The wide yield differential between the U.S. and Japan is likely to persist as the Bank of Japan shows no interest in lifting near-zero rates, despite the cost of rising imports.
The persistent yield gap is also putting additional pressure on the yen, and currency traders are bracing for the price to range between 165 and 170 before the year's end.
Japan Stock Movers
The Nikkei 225 Stock Average increased 0.2% to 39,098.62, and the Topix index fell 0.2% to 2,776.43.
Tech stocks led the gainers for the second day in a row, and Tokyo Electron, Advantest, Screen Holdings, and Socionext gained between 0.3% and 1.2%.
However, Softbank bucked the trend and edged lower by 0.6% to ¥9,666.0.
Automotive stocks lacked direction after investors looked for bargains in the beaten-down sector after a certification scandal engulfed the vehicle makers.
Toyota Motor decreased 0.5% to ¥3,254.0, Honda Motor was unchanged at ¥1,708.0, and Nissan Motor edged up 0.05% to ¥545.40.
Banks were in focus in active trading ahead of the Bank of Japan's rate decisions on Thursday.
Mitsubishi UFJ decreased 1.0.2% to ¥1,632.50, Sumitomo Mitsui declined 0.8% to ¥10,280.0, and Mizuho Financial fell 0.2% to ¥3,141.0.
Taiyo Yuden Company, the materials and electronics engineering company, advanced 3.3% to ¥3,576.0, and Ebara, the maker of turbines and pumps, increased 3.4% to ¥12,165.0.
Eisai Company decreased 3.3% to ¥6,649.0.
China Indexes Extended Downward Trend Ahead of Inflation Data
Li Chen
11 Jun, 2024
Hong Kong
Market indexes in Shanghai and Hong Kong traded lower as investors set aside rate-cut expectations in the U.S. and China.
The CSI 300 and the Hang Seng indexes declined and trimmed this year's gains after property market worries and an uneven economic rebound overwhelmed market sentiment.
The Hang Seng index has dropped 8% from its high in May after China's weak import growth suggested weak domestic demand, and the weakness in manufacturing sector growth also contributed to market nervousness.
China is set to announce its inflation data on Wednesday, and economists are anticipating a slight pick-up in inflation, and consumer price inflation in May is likely to accelerate to an annual pace of 0.4% from the 0.3% pace in April.
The U.S. is also set to announce its inflation update on Wednesday, followed by the Federal Reserve releasing its monetary policy decisions and economic projections.
The Federal Reserve is expected to hold steady its interest rate range between 5.25% and 5.50% and provide insights into the possible rate cut later in the year.
Investors have lowered their rate-cut expectations to one from as high as four earlier in the year.
China Stock Movers
The CSI 300 index declined 1.1% to 3,533.97, and the Hang Seng index dropped 1.7% to 18,056.13.
Li Auto declined 4% to HK$74.90, BYD increased 2% to $229.20, and Nio decreased 3.4% to $36.95.
The Bank of China declined 2.7% to HK$3.71, and the and the Industrial and Commercial Bank of China decreased 1.5% to HK$4.35.
Gold mining and jewelry retailers traded down after the People's Bank of China halted its 18-month-long steady purchase of gold.
Zijin Mining Group declined 4.5% to HK$16.66, and Chow Tai Fook Jewellery Group fell 3.5% to HK$9.41.
India Movers: APL Apollo Tubes, Interglobe Aviation, KIOCL, NLC India, RVNL, Siemens India
Arun Goswami
11 Jun, 2024
Mumbai
Stocks in Mumbai extended gains and erased last Tuesday's losses as market confidence rebounded after the BJP-led NDA alliance swiftly formed the central government.
The Sensex index decreased by 0.1% to 76,423.47, and the Nifty index fell by 0.03% to 23,251.35.
On the Mumbai stock exchange, 98 stocks traded at their 52-week highs, and 6 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds inched higher to 7.03%, and the Indian rupee edged higher at ₹83.48 against the U.S. dollar.
NLC India increased 0.7% to ₹231.19 after the state-controlled coal mining company's board approved the plan to raise $600 million in foreign currency loans.
APL Apollo Tubes jumped 0.5% to ₹1,637.25 after the company signed a power purchase agreement with BluePine Energy.
The company also agreed to take a 26% stake in the power plant company's solar power project in Chhattisgarh.
RVNL advanced 3.1% to ₹385.55 and Siemens India jumped 2.1% to ₹7,000.40 after the consortium of the two companies won an order to set up a rail and power line from Bangalore Metro Rail Corporation.
Interglobe Aviation decreased 2.8% to ₹4,437.90 on a report that an entity controlled by the promoter Rahul Bhatia is looking to sell as much as a 2% stake in a company with a floor price of ₹4,266.
KIOCL declined 1.1% to ₹420.0 after the iron ore mining company said it plans to temporarily shut down production at a palletization plant in Mangalore because of weak demand.
With the Expectations of the Fed On Hold, Market Indexes Rebound In Cautious Trading
Alexander Garcia
10 Jun, 2024
Miami
Market indexes managed to climb higher after the morning doldrums as investors awaited the Fed's monetary policy decisions and May's inflation update.
Stocks struggled to find their footing in early trading on Monday following the benchmark index advance or more than 1% in the previous week.
The S&P 500 index and the Nasdaq Composite advanced 1.3% and 2.4%, respectively, in the previous week after the nonfarm payrolls surpassed the highest expectations.
Investors are hoping to get more insights into the policymakers' thinking as the Federal Reserve is set to announce its rate decisions and economic growth projections on Wednesday.
The Fed is expected to keep its interest rate range unrevised between 5.25% and 5.50%, and policymakers may provide clues about the timing and number of likely rate cuts later in the year.
Market participants have dialed down their rate-cut expectations from as high as four to only one after the Fed's meeting in September.
Investors are also looking forward to May's inflation data on Wednesday, which could provide additional insights on the strength of inflationary pressures and the future rate path.
The consumer price index is expected to hold steady at 3.4%, and core inflation is likely to edge slightly lower to 3.5%.
Last week, the S&P 500 index traded at a new intraday record high amid continued strength in semiconductor stocks powering artificial intelligence development.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.1% to 5,353.07, and the Nasdaq Composite rose 0.3% to 17,180.76.
The yield on 2-year Treasury notes edged higher to 4.89%, 10-year Treasury notes decreased to 4.46%, and 30-year Treasury bonds edged higher to 4.59%.
WTI crude oil increased $1.70 to $77.30 a barrel, and natural gas prices rose 13 cents to $3.05 a thermal unit.
Gold increased by $15.46 to $2,308.67 an ounce, and silver rose 52 cents to $29.66.
The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 105.24.
U.S. Stock Movers
Nvidia edged down 0.2% to $120.10 after the advanced chipmaker traded for the first time, reflecting a 10-for-1 stock split.
Nvidia's market cap crossed the $3 trillion mark for the first time in Friday's trading after investors bid up the stock by 10% in the previous week.
GameStop declined 4.5% to $27.07, and the video game retailer extended losses following the roller-coaster trading in the previous week.
Meme stock plunged in Friday's trading after the company announced another stock offering and said sales plunged in its latest quarter.
Trader and meme stock influencer Keith Gill, also known by his screen name "Roaring Kitty," announced in his first ever live stream on X and YouTube in a few years that he did not have institutional investors.
Previously, Gill shared a screenshot of his holding on GameStop that showed a market worth of $116 million.
KKR, GoDaddy, and CrowdStrike advanced after the S&P Dow Jones Indices plans to include these three stocks in the S&P 500 index, replacing Robert Half, Comerica, and Illumina.
KKR jumped 8.8% to $106.56, GoDaddy advanced 2.2% to $142.40, and CrowdStrike Holdings gained 7.7% to $376.60.
Robert Half declined 0.4%, Illumina fell 5.5%, and Comerica dropped 2.4%.
Far-right Parties Make Significant Gains In EU Elections
European markets faced heavy selling pressure in Monday's trading, and the euro fell to a one-month low after far-right parties gained ground in European Union elections.
Benchmark indexes in Frankfurt, Paris, and London declined sharply amid fresh political uncertainty in the region, as far-right parties made sizable gains in Germany, France, Austria, and Italy.
French President Emmanuel Macron's Renaissance party suffered heavy defeat from the far-right National Rally party, and German Chancellor Olaf Scholz's center-left Social Democrats dropped to third place behind the extreme right-wing party Alternative for Germany.
Amid a wave of anti-establishment on the continent, leading mainstream parties held on to the majority of the 720-member European Parliament on Sunday but suffered heavy defeats from the rise of far-right parties.
The National Rally Party is expected to win 33% of the incoming European Union parliament, more than double the 15% vote by Macron's Renaissance party, forcing the French president Macron to dissolve parliament.
French President Macron acknowledged the defeat and showed his commitment to democratic ideals by calling the snap election a risky move that could make his remaining three years of presidency ineffective.
“I’ve heard your message and your concerns, and I won’t leave them unanswered," and Macron added, "France needs a clear majority to act in serenity and harmony."
Provisional results of the European Parliament, the legislative branch of the 27-member trade bloc, showed Social Democrats losing 4 seats to 135, Christian Democrats gaining 13 seats to 189, and the pro-business Renew group down 19 to 83.
Georgia Meloni's Brothers Party in Italy won 28% of the vote, surpassing the 26% it won in the national election in 2022.
On the economic front, investors are looking forward to several key indicators this week.
In Germany, wholesale prices are expected to advance for the third month in a row, and industrial production is expected to rise in the eurozone and Italy but decline in the U.K. after rising in the previous two months in a row.
Investors are also looking forward to the release of international trade balances in the Euro Area.
Europe Indexes and Yields
The DAX index decreased by 0.8% to 18,406.18; the CAC-40 index fell by 2.0% to 7,841.65; and the FTSE 100 index declined by 0.4% to 8,216.71.
The yield on 10-year German bonds edged higher to 2.65%. French bonds inched higher to 3.20%; the UK gilts edged higher to 4.31%; and Italian bonds inched lower to 4.03%.
The euro edged higher to $1.073; the British pound inched higher to $1.269; and the U.S. dollar weakened to 89.67 Swiss cents.
Brent crude decreased $0.06 to $79.61 a barrel, and the Dutch TTF natural gas fell by €0.71 to €32.50 per MWh.
Europe Stock Movers
French banks declined following the broad market fall following the surprise legislative snap election announcement by French President Emmanuel Macron.
Credit Agricole declined 4.4% to €14.0, BNP Paribas dropped 4.8% to €63.21, and Societe Generale fell 7.3% to €24.12.
Airbus SE decreased 1.1% to €148.34 after the defense company and plane maker's satellite unit received an order to launch satellites from an entity controlled by the U.A.E.
Pennon Group plc declined 1.2% to 589.50 pence after the British water company announced the appointment of David Sproul as chairman, replacing Gill Rider, after the company's annual general meeting on July 24.
Tristel plc rose 2% to 438.50 pence, and the maker of infection prevention products appointed Matthew Sassone as chief executive officer effective September 2.
Japan's GDP Decline Was Less than Previously Expected
Benchmark indexes in Tokyo advanced in Monday's trading, and investors reviewed two key economic reports.
The Nikkei 225 and the Topix gained as much as 1% after the GDP growth decline was less than previously expected and the current account surplus rose more than expected.
Japan's economy shrank 1.8% in the first quarter, less than the previously estimated decline of 2.0% by the government.
The revision was largely because of a smaller decline in private investment of 0.4%, less than 0.5% in the previous quarter.
On a quarterly basis, Japan's GDP decline of 0.5% was unrevised, according to the data released by the Cabinet Office.
Japan's GDP contracted as consumption and exports declined from the previous quarter, and the weaker yen contributed to a higher import bill for energy and other raw materials.
Current Account Surplus Rebounded
Japan's current account surplus rose more than expected to 2.05 trillion yen, an increase of 8.2% from a year ago, according to the Ministry of Finance.
However, the current account surplus decreased from 3.399 trillion yen in March.
Japan Stock Movers
The Nikkei 225 Stock Average increased 0.9% to 39,038.16, and the Topix index advanced 1% to 2,782.49.
Tech stocks led the gainers in Tokyo following the late rebound in Friday's trading in New York.
Tokyo Electron, Socionext, Advantest, Screen Holdings, and SoftBank gained between 0.3% and 4%.
Banks were among the leading gainers in Monday's trading.
Mitsubishi UFJ, Sumitomo Mitsubishi, and Mizuho Financial Group added between 0.5% and 0.7%.
Hitachi, Sumitomo Pharma, Sumitomo Electric, and Dai-Ichi Life gained more than 3%.
Kao Corp., the maker of chemicals and cosmetics, declined 4.5% to ¥6,740.0.
U.S. Movers: Comerica, CrowdStrike, GameStop, GoDaddy, Illumina, KKR, Nvidia, Robert Half
Scott Peters
10 Jun, 2024
New York City
Nvidia edged down 0.2% to $120.10 after the advanced chipmaker traded for the first time, reflecting a 10-to-1 stock split.
Nvidia's market cap crossed the $3 trillion mark for the first time in Friday's trading after investors bid up the stock by 10% in the previous week.
GameStop declined 4.5% to $27.07, and the video game retailer extended losses following the roller-coaster trading in the previous week.
Meme stock plunged in Friday's trading after the company announced another stock offering and said sales plunged in its latest quarter.
Trader and meme stock influencer Keith Gill, also known by his screen name "Roaring Kitty," announced in his first ever live stream on X and YouTube in a few years that he did not have institutional investors.
Previously, Gill shared a screenshot of his holding on GameStop that showed a market worth of $116 million.
KKR, GoDaddy, and CrowdStrike advanced after the S&P Dow Jones Indices plans to include these three stocks in the S&P 500 index, replacing Robert Half, Comerica, and Illumina.
KKR jumped 8.8% to $106.56, GoDaddy advanced 2.2% to $142.40, and CrowdStrike Holdings gained 7.7% to $376.60.
Robert Half declined 0.4%, Illumina fell 5.5%, and Comerica dropped 2.4%.