Market Update
U.S. Movers: Alpine Immune, CarMax, Regional Banks, Vertex Pharmaceuticals
Scott Peters
11 Apr, 2024
New York City
Vertex Pharmaceuticals edged up 0.6% to $400.0 after the company agreed to acquire Alpine Immune Sciences for $4.9 billion in cash, or about $65 per share.
Alpine Immune soared 36% to $64.21.
CarMax declined 7.2% to $73.65 after the used car retailer reported weaker-than-expected quarterly results.
Revenue in the fiscal fourth quarter ending in February declined 1.7% to $5.6 billion from $5.7 billion, net income dropped to $50.3 million from $69.0 million, and diluted earnings per share decreased to 32 cents from 44 cents a year ago.
Retail unit sales in the quarter increased 1.3% to 172,057 units from 169,884 units, and wholesale vehicle sales decreased 4% to 115,546 from 120,330.
The average sale price of a used vehicle decreased 2.3% to $25,985 and that of a that of a wholesale vehicle fell 3.2% to $8,034 from $8,297 a year ago, respectively.
The company pushed back its long-term goal of selling 2 million vehicles in a year to between fiscal years 2026 and 2030, citing macroeconomic uncertainties.
The company repurchased 685,600 shares for $49.3 million at the end of the fiscal fourth quarter, and as of February 29, had $2.36 billion available for repurchase under the outstanding authorization.
In fiscal year 2025, the company intends to "modestly accelerate the pace of share repurchases," above the pace that was implemented in the third quarter of fiscal year 2024.
Regional banks were in focus, after Treasury yields advanced following two inflation reports over the last two days.
New York Community Bancorp traded near its low for the year at $2.96, Western Alliance declined 0.1% to $57.32, and MVB Financial dropped 0.3% to $19.78.
U.S. Indexes Trade Volatile After Producer Price Inflation Accelerates to a Three-month High
Barry Adams
11 Apr, 2024
New York City
Stock market indexes were flat in early trading on Thursday, and investors reviewed the producer price index update.
The S&P 500 index and the Nasdaq Composite traded sideways in quiet trading as investors reviewed two inflation reports over two days.
The producer price index rose 2.1% from a year ago. In March, it inched higher by 0.2% on the month, the U.S. Bureau of Labor Statistics reported Thursday.
Monthly producer prices rose at the slowest pace in three months, following a 0.6% rise in February and a 0.4% increase in January.
Producer prices increased in March, driven by a 0.3% rise in services, and goods price inflation decreased by 0.1% after rising 1.2% in the previous month.
The core producer price index, which excludes food and energy prices, rose 0.1% on the month and increased 2.4% from a year ago.
On Wednesday, consumer price inflation accelerated to a three-month high.
Consumer price inflation in March accelerated to an annual pace of 3.5% and advanced 0.4% for the month, the U.S. Bureau of Labor Statistics reported Wednesday.
Annual inflation accelerated for the second month in a row to 3.5% in March, up from 3.2% in February and 3.1% in January.
Core inflation, which excludes food and energy prices, held steady at 0.4% from the previous month and rose 3.8% from a year ago in March.
U.S. Indexes and Yields
The S&P 500 index increased 0.02% to 5,162.49, and the Nasdaq Composite rose 0.3% to 16,238.15.
The yield on 2-year Treasury notes edged higher to 4.94%, 10-year Treasury notes inched up to 4.53%, and 30-year Treasury bonds edged up to 4.63%.
WTI crude oil increased $0.83 to $85.41 a barrel, and natural gas prices decreased 4 cents to $1.83 a thermal unit.
Gold increased by $5.09 to $2,341.46 an ounce, and silver rose 9 cents to $28.02.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 105.11.
U.S. Stock Movers
CarMax declined 7.2% to $73.65 after the used car retailer reported weaker-than-expected quarterly results.
Vertex Pharmaceuticals edged up 0.6% to $400.0 after the company agreed to acquire Alpine Immune Sciences for $4.9 billion in cash, or about $65 per share.
Alpine Immune soared 36% to $64.21.
Regional banks were in focus after Treasury yields advanced following two inflation reports over the last two days.
New York Community Bancorp traded near its low for the year at $2.96, Western Alliance declined 0.1% to $57.32, and MVB Financial dropped 0.3% to $19.78.
Europe Movers: AstraZeneca, Darktrace, Gerresheimer, Givaudan, Lufthansa, Publicis, Societe Generale
Inga Muller
11 Apr, 2024
Frankfurt
European markets traded sideways ahead of the widely anticipated rate decisions from the European Central Bank and comments from EDB president Christine Lagarde.
Investors are hoping to get more clarity about the rate path and projections of interest rates, economic growth, and inflation rates.
The DAX index decreased by 0.6% to 17,994.90, the CAC-40 index fell by 0.2% to 8,033.83, and the FTSE 100 index inched lower by 0.2% to 7,941.36.
The yield on 10-year German bonds edged up to 2.45%; French bonds inched higher to 2.93%; the UK gilts edged higher to 4.23%; and Italian bonds inched lower to 3.81%.
Givaudan SA declined 1.3% to CHF 3,980.0, despite the Swiss fragrance and flavor maker reporting higher first-quarter sales.
Societe Generale increased 0.9% to €25.36 after the French lender agreed to sell its equipment leasing and financing business to BPCE for €1.1 billion.
AstraZeneca PLC rose 1.9% to 10,942.0 pence after the biopharmaceutical company announced its plan to increase its dividend by 7% in 2024.
Publicis Groupe SA added 1.5% to €102.10 after the French advertising company reported organic sales in the first quarter increased by 4.9%, driven by strong performance in all regions.
Deutsche Lufthansa decreased 2.5% to €6.98 after the state-controlled German airline suspended all flights to Tehran because of the rising tensions in the Middle East.
Gerresheimer AG dropped 4.4% to €6.98 after the German manufacturer of packing products for medication and drug delivery devices reported that its first-quarter income slightly declined.
Darktrace PLC increased 6.3% to 464.90 pence after the cybersecurity and artificial intelligence company returned to revenue growth in its fiscal third quarter.
Revenue increased 26.5% from a year ago to $176.1 million, and annual recurring revenue increased 23.5% at the end of the March quarter to $731.1 million.
The company raised its revenue growth expectation to 25.5%, 50 basis points higher than the upper end of its previously announced range, reflecting strong demand from customers and higher conversion rates.
The company revised its adjusted operating earnings margin to 23% from the minimum of 21% in the previous estimate.
European Markets Trade Sideways with All Ears On ECB President Lagarde Comments
Bridgette Randall
11 Apr, 2024
Frankfurt
European market indexes struggled to advance ahead of monetary policy decisions by the European Central Bank.
Benchmark indexes in Frankfurt, Paris, and London decreased, and investors looked forward to comments from European Central Bank president Christine Lagarde.
The ECB is widely expected to hold its main refinancing operation rate steady at a 22-year high of 4.50% and hold the deposit facility rate at 4.0%.
Inflation has steadily declined to 2.4% in March after peaking at 10.6% in October 2022, largely because of the fall in imported energy prices.
However, service inflation continues to stay elevated at 4%, making it harder for policymakers to bring down inflation below 2%.
Service sector inflation is closely watched by policymakers because about 70% of the labor force is employed in the sector.
Europe Indexes and Yields
The DAX index decreased by 0.6% to 17,994.90, the CAC-40 index fell by 0.2% to 8,033.83, and the FTSE 100 index inched lower by 0.2% to 7,941.36.
The yield on 10-year German bonds edged up to 2.45%; French bonds inched higher to 2.93%; the UK gilts edged higher to 4.23%; and Italian bonds inched lower to 3.81%.
The euro edged higher to $1.073; the British pound inched higher to $1.253; and the U.S. dollar edged lower to 91.22 Swiss cents.
Brent crude decreased $0.69 to $89.89. a barrel, and the Dutch TTF natural gas rose by €1.54 to €29.02 per MWh.
Europe Stock Movers
Givaudan SA declined 1.3% to CHF 3,980.0, despite the Swiss fragrance and flavor maker reporting higher first-quarter sales.
Societe Generale increased 0.9% to €25.36 after the French lender agreed to sell its equipment leasing and financing business to BPCE for €1.1 billion.
AstraZeneca PLC rose 1.9% to 10,942.0 pence after the biopharmaceutical company announced its plan to increase its dividend by 7% in 2024.
Publicis Groupe SA added 1.5% to €102.10 after the French advertising company reported organic sales in the first quarter increased by 4.9%, driven by strong performance in all regions.
Deutsche Lufthansa decreased 2.5% to €6.98 after the state-controlled German airline suspended all flights to Tehran because of the rising tensions in the Middle East.
Gerresheimer AG dropped 4.4% to €6.98 after the German manufacturer of packing products for medication and drug delivery devices reported that its first-quarter income slightly declined.
Darktrace PLC increased 6.3% to 464.90 pence after the cybersecurity and artificial intelligence company returned to revenue growth in its fiscal third quarter.
Revenue increased 26.5% from a year ago to $176.1 million, and annual recurring revenue increased 23.5% at the end of the March quarter to $731.1 million.
The company raised its revenue growth expectation to 25.5%, 50 basis points higher than the upper end of its previously announced range, reflecting strong demand from customers and higher conversion rates.
The company revised its adjusted operating earnings margin to 23% from the minimum of 21% in the previous estimate.
Japan Stocks Decline After Hot U.S. CPI Report, Yen-Tumble Raises Fresh Intervention Risks
Akira Ito
11 Apr, 2024
Tokyo
Stocks in Tokyo declined following the weakness in New York after the latest inflation report dashed all hopes of an imminent interest rate cut.
Asian markets were on the defensive after the hotter-than-expected U.S. inflation in March dampened the hopes of a rate cut in June.
Investors pared back rate-cut expectations after U.S. inflation accelerated for the third month in a row in March to 3.5%.
Market participants are worried that persistent inflation above the Fed's target rate of 2% may force the Federal Reserve to push rate cuts all the way into 2025, contrary to the Fed's projection of as many as three rate cuts this year.
Yen Weakness Prompt Verbal Intervention from the Finance Ministry
The yen continued its decline and approached 153 against the U.S. dollar, the lowest since July 1990, sparking worries about government intervention.
The yen traded at 152.70 against the U.S. dollar in Tokyo at 1:30 p.m. local time.
The latest decline in the yen prompted Finance Minister Shunichi Suzuki to repeat his previous warnings on Thursday, highlighting that excessive currency swings are not desirable and currency markets should reflect economic fundamentals.
Despite the talk of government intervention, any effort by the ministry of finance coordinated with the central bank is largely going to be symbolic and temporary because the longer-term trend for the Japanese yen is still facing downwards.
Investors have been selling yen after the Bank of Japan ended its negative rate regime and lifted its policy rate for the first time since February 2007.
But the BOJ's rate increase to 0.1% failed to sway market participants, as the gap with the U.S. interest rate remains large.
Moreover, U.S. interest rates are likely to stay at the current level of 5.5% amid the persistent inflation rate above 2%.
Higher Commodity Prices Stoke Inflation Fears In Japan
Investors were also on guard after copper, aluminum, and gold traded at new highs following the reports over the last two weeks of strong manufacturing activities in the U.S., Japan, India, and Europe.
Global manufacturing activities have been growing at a steady pace, and China's manufacturing sector growth has improved, supported by better-than-expected exports of manufactured goods.
Japan's Money Supply Expands in March
The M2 money supply in March rose 2.5% to 1,243.9 trillion yen, the Bank of Japan reported Thursday.
M3 money supply increased at a slower pace of 1.8% to 1,596.8 trillion yen, and the L money stock, which includes all forms of money supplied to the economy, rose 2.1% to 2,127.2 trillion yen.
In the first quarter, M2 increased 2.5%, M3 rose 1.8%, and L advanced 2.2% from a year ago, respectively.
Japan Stock Movers
The Nikkei 225 Stock Average decreased 0.4% to 39,429.36, and the Topix index increased 0.2% to 2,748.17.
Tech stocks were among the leading decliners, and financial stocks were among the leading gainers in Thursday's trading.
SoftBank, Advantest, Tokyo Electron, Screen Holdings, Disco Corp., and Sakura Internet declined between 1.5% and 4%.
Banks advanced after the yield on 10-year Japanese government bonds rose to 0.85% after investors dialed down U.S. interest rate expectations.
Mitsubishi UFJ, Sumitomo Mitsubishi, and Mizuho Financial rose between 0.3% and 0.5%.
Persistent Demand Weakness Drags Consumer Price Inflation In China
Li Chen
11 Apr, 2024
Hong Kong
Consumer price inflation rose less than expected, and producer price inflation declined for the eighteenth month in a row.
The consumer price index rose 0.1% from a year ago in March after rising at an annual pace of 0.7% in February, the National Bureau of Statistics reported Thursday.
The inflation index picked up in February because of the slight rebound in demand during the Lunar New Year holiday, when inflation advanced for the first time in six months.
Post-pandemic consumer demand has remained weak for the second year in a row, following worries about job stability and a protracted slump in property prices.
Families in China viewed investing in residential property as a safe bet after prices rose at a steady pace for nearly 25 years. But that began to change over the last eight years.
Property market weakness since 2016 has turned into a full-blown crisis after the zero-covid restrictions halted the completion of several real estate projects and pushed most large developers on the brink of debt defaults.
Core inflation, which excludes volatile food and energy prices, rose 0.6% in the month from a year ago, compared to a 1.2% rise in February and 0.4% growth in January.
Producer price index, a measures of wholesale inflation, eased 2.8% in March from a year ago, faster than the 2.7% annual pace of decline in February.
China has set a target for consumer prices to rise by 3.0%, a lofty goal considering inflation in 2023 was only 0.2%.
China Indexes Fall After Consumer Price Inflation Weakens
Li Chen
10 Apr, 2024
Hong Kong
Stocks in Shanghai and Hong Kong struggled after the latest inflation data stoked fears of protracted consumer demand weakness.
Investor sentiment was weak on the worry that policymakers may not provide strong enough stimulus to revive aggregate demand, dampening corporate earnings growth.
Property stocks in Hong Kong dropped sharply on the worry that interest rates would remain elevated following the release of U.S. inflation data.
The U.S. consumer price index in March accelerated to 3.5% from a year ago, and core inflation increased to 3.8%.
The overall consumer price index advanced for the third month in a row after dropping to 3.1% in January, denting all hopes of a rate cut in June.
The Hong Kong Monetary Authority follows the interest rate cycle set by the U.S. because the Hong Kong dollar has been pegged to the U.S. dollar since October 17, 1983, with a fixed exchange rate of HK$7.80 per U.S. dollar.
The CSI 300 index increased 0.1% to 3,507.51, and the Hang Seng index decreased 1% to 16,970.12.
China Vanke, Henderson Land Development, New World Development, and Sun Hung Kai declined between 1% and 4%.
China Life, AIA Group, and Prudential PLC fell between 2% and 4%.
Global Bond Market Adjusts to the Rising Possibilities of a No Landing Scenario
Barry Adams
10 Apr, 2024
New York City
Investors hit the sell button after the latest inflation report sent a strong signal to policymakers to delay the widely advertised rate cut.
Benchmark indexes on Wall Street fell more than 1%, after consumer price inflation was ahead of market expectations and Treasury yields scaled higher.
Policymakers are likely to take a cautionary view and wait for stronger evidence that inflation is on a sustainable downward trend towards the 2% level.
So far, that elusive trend has not emerged for the last nine months.
Inflation accelerated for the third month in a row after hitting the low of 3.1% in January, and the price increase has been rangebound, between 3.1% and 3.7% since last June.
The stubborn overall and core inflation of the last nine months raises the prospects of policymakers needing to lift the interest rate to bring down inflation to 2%, but that may come at the expense of slower economic growth or a weaker job market.
The S&P 500 index and the Nasdaq Composite decreased 1% on the worry that hotter-than-expected inflation will delay the Fed's widely advertised rate cuts.
Stocks have been struggling in April in anticipation of the inflation report, amid widespread expectations that the continued easing of inflationary forces over the last nine months will extend to March.
Market indexes have been struggling in April after surging nearly 10% in the first quarter and delivering the best performance in five years.
Consumer Price Inflation Accelerated in March
Consumer price inflation in March accelerated to an annual pace of 3.5% and advanced 0.4% for the month, the U.S. Bureau of Labor Statistics reported Wednesday.
Annual inflation accelerated for the second month in a row to 3.5% in March, up from 3.2% in February and 3.1% in January.
Core inflation, which excludes food and energy prices, held steady at 0.4% from the previous month and rose 3.8% from a year ago in March.
The persistent inflation was driven by a sharp jump in transportation prices of 10.7%, and steady but elevated housing inflation of 5.7%.
The index for shelter and gasoline contributed to over half of the monthly index for all items.
U.S. Indexes and Yields
The S&P 500 index decreased 1.1% to 5,150.31, and the Nasdaq Composite rose 1.2% to 16,122.60.
The yield on 2-year Treasury notes edged higher to 4.95%, 10-year Treasury notes inched up to 4.50%, and 30-year Treasury bonds edged up to 4.59%.
WTI crude oil increased $0.30 to $85.53 a barrel, and natural gas prices decreased 1 cent to $1.88 a thermal unit.
Gold decreased by $13.23 to $2,340.08 an ounce, and silver fell 14 cents to $27.99.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 105.25.
U.S. Stock Movers
Delta Air Lines increased 2.8% to $48.65 after the international carrier reported better-than-expected quarterly results.
Revenue increased 8% to $13.75 billion from $12.76 billion, net income swung to a profit of $37 million from a loss of $363 million, and diluted earnings per share were 6 cents compared to a loss of 57 cents a year ago.
The airline guided second-quarter revenue to increase between 5% and 7% and earnings per share to fall between $2.20 and $2.50.
The company also projected 2024 earnings per share to range between $6.0 and $7.0.
PriceSmart increased by 2.6% to $85.25 after the membership warehouse club operator reported better-than-expected second-quarter results.
Revenue in the fiscal second quarter ending in February rose 13.1% to $1.29 billion from $1.14 billion, net income rose to $39.3 million from $31.1 million, and diluted earnings per share rose to $1.31 from $1.02 a year ago.
The company declared a special dividend of $1.0 per share payable on April 30 to shareholders on record on April 19.
WD-40 decreased 2.8% to $248.0 after the lubricant and specialty oil products maker reported weaker-than-expected quarterly revenue.
Revenue in the fiscal second quarter ending in February increased 7% to $139.1 million from $130.2 million, net income edged lower to $15.5 million from $16.5 million, and diluted earnings per share eased to $1.14 from $1.21 a year ago.
NetEase declined 1.4% to 99.23, and Microsoft inched lower 1% to $422.16 after the two companies revived the agreement to distribute computer games in China.
Microsoft's online gaming unit Blizzard revived the previously available distribution partnership with China-based NetEase, including Overwatch and World of Warcraft.
Previously, Blizzard had terminated its partnership with NetEase, alleging intellectual copyright violations.
European Markets Extend Weekly Gains Ahead of ECB Rate Decisions
European markets advanced in Wednesday's trading as investors awaited release of the ECB's monetary policy decision on Thursday.
Market sentiment has wavered between euphoric and cautious over the last five trading sessions as investors debate rate paths and economic conditions in the Euro Area.
ECB President Christine Lagarde signaled, after the last rate-setting meeting on March 7, policymakers are likely to approve a rate cut at the end of the meeting in June or after.
Those comments from Lagarde set in motion a market advance and lifted benchmark indexes in France and Germany to new record highs.
Inflation has moderated from as high as 9% to close to 3% over the last eighteen months, but despite multiple interest rate hikes, inflation has stayed significantly above the central bank's target rate of 2%.
Moreover, energy prices have rebounded in the last five weeks, and higher prices are likely to fuel inflationary forces.
In addition, service inflation has stayed firmly above 4%, posing a challenge to policymakers in lowering inflation to closer to its target rate.
Later in the day, the U.S. consumer price inflation report is scheduled to be released at 2:30 p.m. CET.
Investors are anticipating the overall annual pace of inflation in March to rise to 3.4%, and increase 0.35% from the previous month.
Europe Indexes and Yields
The DAX index increased by 0.1% to 18,095.96, the CAC-40 index rose by 0.05% to 8,045.35, and the FTSE 100 index inched higher by 0.3% to 7,961.21.
The yield on 10-year German bonds edged down to 2.36%; French bonds inched lower to 2.86%; the UK gilts edged higher to 4.07%; and Italian bonds inched lower to 3.69%.
The euro edged higher to $1.086, the British pound inched higher to $1.27, and the U.S. dollar edged lower to 90.34 Swiss cents.
Brent crude decreased $0.20 to $89.66. a barrel, and the Dutch TTF natural gas rose by €0.10 to €27.46 per MWh.
Europe Stock Movers
Semiconductor equipment companies advanced, following better-than-expected quarterly results from Taiwan Semiconductor.
Infineon Technologies increased 1.9% to €34.19, STMicroelectronics gained 1.4% to €40.12, and ASML Holding added 1.5% to €912.50.
Barry Callebaut soared 8.1% to CHF 1,330.0, after the Swiss chocolate maker reported higher first-half sales.
Revenue in the first half ending in February increased 11.1% to CHF 4.6 billion from CHF 4.2 billion; recurring net profit declined 7.9% to CHF 215.8 million from CHF 234.3 million; and free cash outflow surged to CHF 1.1 billion from CHF 188 million a year ago, respectively.
The chocolate company secured additional financing of CHF 600 million to mitigate higher cash requirements in cocoa bean sourcing and the long cash conversion cycle from cocoa bean sourcing to chocolate sales.
The company projected cocoa bean prices are likely to stay volatile for the rest of the year, and reiterated its annual flat volume and annual recurring operating earnings.
Philips NV rose 2.6% to €19.63 after the Dutch medical device company reached a final settlement with U.S. regulators, primarily linked to its Respironics operations.
Tesco PLC jumped 4.5% to 300.40 pence after the UK-based grocery chain posited a 11% increase in profit in the financial year 2023-2024, and the supermarket chain operator estimated an increase in profit in the current year.
Mining companies advanced for the third day in a row after commodity prices continued to rise on the back of strong global manufacturing activity.
Copper jumped to a 15-month high and approached the record high reached two years ago; gold traded near the record high; and silver hovered near the multi-year high.
Glencore, BHP, Rio Tinto, Anglo American, and Antofagasta advanced between 0.5% and 1.4%.
THG PLC dropped 9% to 62.0 pence after the cosmetics and dietary supplement e-commerce retailer said its revenue declined after the company discontinued loss-making operations.
Revenue in 2023 declined 8.7% to £2.1 billion from £2.2 billion, and adjusted operating earnings from continuing operations rose 78% to 114.1 million from £64.1 million a year ago.
The company said revenue trends in 2024 are "continuing to improve with notable momentum in beauty" and added that the company is likely to "meet consensus estimates" for its annual results.
Asian Markets Extend Weekly Gains Amid Global Rate Jitters
Market indexes in Asia generally traded higher as investors awaited the release of the U.S. consumer price inflation report later today and monetary policy decisions from the European Central Bank on Thursday.
Moreover, China is also scheduled to release its foreign trade and inflation data later in the week.
China's exports for March are expected to decline by about 2%, but the trade surplus may rise on account of the larger decline in imports.
Consumer price inflation in China is expected to rise 0.4% from the previous month in March, the second monthly increase in a row.
Financial markets are closed in South Korea for Election Day and shuttered in Malaysia, Indonesia, and Singapore to celebrate Eid ul-Fitr.
Japan Stocks Halt Two-day Rally, PPI Holds Steady
Stocks in Tokyo headed lower and halted a two-day rally after producer price indexes rose in March.
The producer price index in March rose to 0.8% from an upwardly revised 0.7% increase in February, the Bank of Japan said on Wednesday.
Investors were on the defensive after the measure of wholesale prices in March rose by 0.2% from the previous month and matched the increase in the previous month.
The overall bank lending in Japan rose 3.2% from a year ago to 619.6 trillion yen and accelerated from the 3.0% annual pace in February.
Overall lending in the first quarter rose 3.1%, the Bank of Japan added.
Investors turned cautious in the absence of other local economic news ahead of the U.S. consumer price inflation report later in the day.
The Nikkei 225 Stock Average decreased 0.4% to 39,613.30, and the Topix index declined 0.3% to 2,745.93.
Financial stocks were among the leading losers.
Mizuho Financial, Sumitomo Mitsui Financial, and Mitsubishi UFJ declined between 0.5% and 1.2%.
Tokyo Gas, Tokyo Electric Power, and Japan Steel Works added more than 3.5%.
Advantest, Screen Holdings, Disco Corp., and Softbank declined between 0.3% and 1.1%.
Hong Kong Stocks Advance After Stock Buybacks Support Prices
Stocks in China extended their weekly losses, but stocks advanced in Hong Kong after corporations stepped up stock-buying activities.
Investors are looking forward to the release of inflation data later in the day and the foreign trade report on Thursday.
The CSI 300 index decreased 0.3% to 3,518.42, and the Hang Seng index rose 1.9% to 3,518.42. Both indexes are trading below their historical earnings ratio of below eight.
The Hong Kong market index is nearing a 4-week high after government intervention supported stock prices and foreign investors returned in search of bargains.
About 61 Hong Kong-listed companies repurchased their stocks worth HK$4.59 billion last week, with Tencent Holdings buying back HK$3 billion worth of its stock, Zheshang Securities said in a note to its clients.
Hang Seng Bank gained 5.6% to HK$99.30 after the company announced its stock repurchase plan of HK$3.0 billion.
BYD Auto gained 2.2% to HK$211.80, Li Auto advanced 3% to HK$125.60, and Xpeng gained 7% to HK$32.05.
Zijin Mining Group soared 5.5% to HK$17.70 after the gold miner tracked a record high gold price in Shanghai and New York as central banks in China and India continued to add to their holdings.
China Auto Sales Expanded Amid Price Wars and New Models
China's passenger car sales increased 5.7% in March from a year ago to 1.678 million units and rebounded 53% from the previous month after consumer demand rebounded following the Lunar New Year holiday.
Electric vehicles account for about 41.5% of all passenger car sales in China.
Electric vehicle sales rose 10.5% in March from a year ago as automakers launched new vehicles and offered significant price discounts and additional financing incentives.
BYD sales increased 46% to 302,500 units, LI Auto sales advanced 39% to 28,984 units, and Cherry sales rose 45.3% to 181,585 units.
Geely Auto said sales advanced 39% to 150,800 units, and Nio deliveries increased 14.3% to 11,866 units.
Specifically, Chinese carmakers' sales in the first quarter rose 49% from a year ago to 475,700 vehicles, including vehicle exports of 87,000.
The China Passenger Car Association estimated that wholesale new energy vehicle sales, which account for battery EVs and plug-in EVs, increased 33% from a year ago to 820,000 units in March, an 84% rise from the previous month.
China's overall passenger car export growth accelerated to 39% in March, from 18% in February, to 406,000 units.
Rising sales came with a sharp fall in profit margins for Chinese companies after they slashed prices and introduced cheaper models.
The profit margin of the Chinese auto industry has declined to 4.3% from 8.7% in 2015, said Cui Dongshu, the secretary general of the China Passenger Car Association.
Rising exports from China also have policymakers and officials worried in Europe and the U.S.
U.S. Treasury Secretary Janet Yellen confirmed on Monday that tariffs are still likely to stem the rising exports of Chinese vehicles.
“China is now simply too large for the rest of the world to absorb this enormous capacity,” Janet Yellen said at a press conference on Monday.
India Indexes Inch Higher In Record Territory Ahead of Tech Earnings
Stocks in Mumbai edged higher, and bond yields held steady ahead of a public holiday on Thursday.
The Sensex and Nifty indexes traded sideways with an upward bias as investors awaited earnings releases from tech services providers later in the week.
Market indexes are expected to trade volatile in thin trading as financial markets are closed for the Ramzan Id public holiday on Thursday.
The Sensex index increased by 0.3% to 74,873.93, and the Nifty index edged higher by 0.3% to 22,705.85.
The yield on the 10-year Indian government bonds inched higher to 7.15%, and the Indian rupee edged lower at ₹83.21 against the U.S. dollar.
Consumer Price Inflation Accelerated in March, Core Inflation Stays Elevated
Brian Turner
10 Apr, 2024
New York City
Consumer price inflation in March accelerated to an annual pace of 3.5% and advanced 0.4% for the month, the U.S. Bureau of Labor Statistics reported Wednesday.
Annual inflation accelerated for the second month in a row to 3.5% in March, up from 3.2% in February and 3.1% in January.
Core inflation, which excludes food and energy prices, held steady at 0.4% from the previous month and rose 3.8% from a year ago in March.
The persistent inflation was driven by a sharp jump in transportation prices of 10.7%, and steady but elevated housing inflation of 5.7%.
The index for shelter and gasoline contributed to over half of the monthly index for all items index.
Food inflation held steady at 2.2% in March, while energy inflation rebounded to 2.1% from a decline of 1.9% in February.
The new vehicle price declined by 0.1% after rising by 0.4% in February, and the used vehicle price decline accelerated to 2.2% from the 1.1% fall in February.
Investors have bid up stocks over the last two months, in the hopes that inflation is likely to continue to ease in the months ahead.
But consumer prices rebounded for the third month in a row after dropping to 3.1% in January 2024.
Consumer price inflation peaked at 9.1% in June 2022 and fell steadily to 3.1% in June 2023, and since then has bounced between 3.1% and 3.7%, significantly higher than the Fed's target rate of 2%.
U.S. Movers: Delta Air, Microsoft, NetEase, PriceSmart, WD 40
Scott Peters
10 Apr, 2024
London
Delta Air Lines increased 2.8% to $48.65 after the international carrier reported better-than-expected quarterly results.
Revenue increased 8% to $13.75 billion from $12.76 billion, net income swung to a profit of $37 million from a loss of $363 million, and diluted earnings per share were 6 cents compared to a loss of 57 cents a year ago.
The airline guided second-quarter revenue to increase between 5% and 7% and earnings per share to fall between $2.20 and $2.50.
The company also projected 2024 earnings per share to range between $6.0 and $7.0.
PriceSmart increased by 2.6% to $85.25 after the membership warehouse club operator reported better-than-expected second-quarter results.
Revenue in the fiscal second quarter ending in February rose 13.1% to $1.29 billion from $1.14 billion, net income rose to $39.3 million from $31.1 million, and diluted earnings per share rose to $1.31 from $1.02 a year ago.
The company declared a special dividend of $1.0 per share payable on April 30 to shareholders on record on April 19.
WD-40 decreased 2.8% to $248.0 after the lubricant and specialty oil products maker reported weaker-than-expected quarterly revenue.
Revenue in the fiscal second quarter ending in February increased 7% to $139.1 million from $130.2 million, net income edged lower to $15.5 million from $16.5 million, and diluted earnings per share eased to $1.14 from $1.21 a year ago.
NetEase declined 1.4% to 99.23, and Microsoft inched lower 1% to $422.16 after the two companies revived the agreement to distribute computer games in China.
Microsoft's online gaming unit Blizzard revived the previously available distribution partnership with China-based NetEase, including Overwatch and World of Warcraft.
Previously, Blizzard had terminated its partnership with NetEase, alleging intellectual copyright violations.