Market Update
Nikkei 225 and Topix In Tokyo Halt 2-Day Rally Amid Worries of Rising Trade Tensions
Akira Ito
26 Nov, 2024
Tokyo
Sentiment in Tokyo soured, and benchmark indexes traded down, reversing gains of the previous two sessions.
The Nikkei 225 stock average fell 1.4%, and the broader Topix index fell 1.5% as investors worried about the U.S. trade policy uncertainty and rising geopolitical tensions.
Japan exports about 18% of its goods to China, and the worsening economic outlook in the second-largest economy has kept investor sentiment negative.
Moreover, the next U.S. administration is likely to increase tariffs on all imported goods, including products made in Japan and made by Japan in Asia and Mexico and Canada.
Rising trade barriers, export controls, and escalation of tariffs are likely to provide additional headwinds to export-driven companies in Japan and dampen overall economic growth.
Japan, with heavy reliance on exports to China, remains vulnerable to economic volatility and slowdown in the second-largest economy.
On the economic front, investors are looking forward to the release of Tokyo area inflation data on Friday, and the region's trend is generally indicative of the broader patterns in Japan.
Japan Stock Movers
The Nikkei 225 Stock Average decreased 1.4% to 38,247.44, and the broader Topix index fell 1.5%.
Volatile tech stocks led the decliners, and semiconductor equipment stocks topped the chart.
Tokyo Electron decreased 2.7% to ¥22,510.0, Advantest Corp. fell 4.4% to ¥8,827.0, Lasertec declined 5.7% to ¥16,670.0, and Disco Corp. eased 3.3% to ¥41,340.0.
Keisei Electric Railway Co. Ltd. increased 1.5% and extended two-day gains to over 15% after an activist investor took a stake in the company, which could force the company to boost shareholder return.
East Japan Railway decreased 0.6% to ¥2,824.50, West Japan Railway added 0.1%, and Oriental Land eased 1.1% to ¥3,440.0.
Haseko Corp rose 2.2% to ¥1,980.0, Daiwa House decreased 0.1% to ¥4,651.0, and Sekisui House edged down 0.1% to ¥3,586.0.
Toyota Motor declined 1% to ¥2,667.50, Honda Motor fell 1.9% to ¥1,333.0, and Nissan Motor dropped 3.6% to ¥392.10.
Nikkei 225 and Topix In Tokyo Halt 2-Day Rally Amid Worries of Rising Trade Tensions
Akira Ito
26 Nov, 2024
Tokyo
Sentiment in Tokyo soured, and benchmark indexes traded down, reversing gains of the previous two sessions.
The Nikkei 225 stock average fell 1.4%, and the broader Topix index fell 1.5% as investors worried about the U.S. trade policy uncertainty and rising geopolitical tensions.
Japan exports about 18% of its goods to China, and the worsening economic outlook in the second-largest economy has kept investor sentiment negative.
Moreover, the next U.S. administration is likely to increase tariffs on all imported goods, including products made in Japan and made by Japan in Asia and Mexico and Canada.
Rising trade barriers, export controls, and escalation of tariffs are likely to provide additional headwinds to export-driven companies in Japan and dampen overall economic growth.
Japan, with heavy reliance on exports to China, remains vulnerable to economic volatility and slowdown in the second-largest economy.
On the economic front, investors are looking forward to the release of Tokyo area inflation data on Friday, and the region's trend is generally indicative of the broader patterns in Japan.
Japan Stock Movers
The Nikkei 225 Stock Average decreased 1.4% to 38,247.44, and the broader Topix index fell 1.5%.
Volatile tech stocks led the decliners, and semiconductor equipment stocks topped the chart.
Tokyo Electron decreased 2.7% to ¥22,510.0, Advantest Corp. fell 4.4% to ¥8,827.0, Lasertec declined 5.7% to ¥16,670.0, and Disco Corp. eased 3.3% to ¥41,340.0.
Keisei Electric Railway Co. Ltd. increased 1.5% and extended two-day gains to over 15% after an activist investor took a stake in the company, which could force the company to boost shareholder return.
East Japan Railway decreased 0.6% to ¥2,824.50, West Japan Railway added 0.1%, and Oriental Land eased 1.1% to ¥3,440.0.
Haseko Corp rose 2.2% to ¥1,980.0, Daiwa House decreased 0.1% to ¥4,651.0, and Sekisui House edged down 0.1% to ¥3,586.0.
Toyota Motor declined 1% to ¥2,667.50, Honda Motor fell 1.9% to ¥1,333.0, and Nissan Motor dropped 3.6% to ¥392.10.
China Investors Discount Trump Threats of Punitive Tariffs, Stock Indexes Move Higher
Li Chen
26 Nov, 2024
Hong Kong
Stock market indexes in China and Hong Kong advanced as investors looked beyond brewing tariff wars with the U.S. and the European Union.
The Hang Seng index increased 0.4%, and the CSI 300 index edged higher by 0.35% as investors debated the scope and depth of potential U.S. tariffs on goods shipped from China.
Investors are taking a wait-and-see approach with the potential increase in U.S. tariffs and diversifying their manufacturing base to minimize the impact.
Chinese automakers are ramping up production in Thailand, Vietnam, Mexico, and Hungary, as manufacturing companies are shifting more assembly operations to overseas locations.
The supply chain elongation trend has been in place since 2018, when the U.S. imposed punitive tariffs for the first time, only to see exports from China surge over the next six years.
China's exports to the U.S. are set to surpass $560 billion in 2024 from $479 billion in 2018, despite rising trade barriers, punitive tariffs, and export controls, according to data available from the U.S. and Chinese government agencies.
The U.S. tariffs so far have increased operating costs for businesses and living expenses for households and contributed to keeping U.S. inflation at elevated levels.
China Stock Movers
The Hang Seng index increased 0.4% to 19,244.63, and the mainland China-focused CSI 300 index gained 0.4% to 3,861.81.
Baidu jumped 5.2% to HK $81.90, and the search company is set to launch trial operations for its autonomous ride-hailing operation in Hong Kong as early as this month.
Meituan advanced 2.7% to HK $166.40 ahead of the company's quarterly results on Friday.
Investors are hoping that the online delivery platform operator is likely to report a three-fold surge in its profit.
CNSIG Anhui Hongsifang Fertilizer soared more than 15-fold to 129.34 yuan on the first day of trading in Shanghai.
The fertilizer company placed 50 million shares in its initial public offering priced at 7.98 yuan per share.
China Markets
Li Chen
26 Nov, 2024
Hong Kong
Stock market indexes in China and Hong Kong advanced as investors looked beyond brewing tariff wars with the U.S. and the European Union.
The Hang Seng index increased 0.4%, and the CSI 300 index edged higher by 0.35% as investors debated the scope and depth of potential U.S. tariffs on goods shipped from China.
Investors are taking a wait-and-see approach with the potential increase in U.S. tariffs and diversifying their manufacturing base to minimize the impact.
Chinese automakers are ramping up production in Thailand, Vietnam, Mexico, and Hungary, as manufacturing companies are shifting more assembly operations to overseas locations.
The supply chain elongation trend has been in place since 2018, when the U.S. imposed punitive tariffs for the first time, only to see exports from China surge over the next six years.
China's exports to the U.S. are set to surpass $560 billion in 2024 from $479 billion in 2018, despite rising trade barriers, punitive tariffs, and export controls, according to data available from the U.S. and Chinese government agencies.
The U.S. tariffs so far have increased operating costs for businesses and living expenses for households and contributed to keeping U.S. inflation at elevated levels.
China Stock Movers
The Hang Seng index increased 0.4% to 19,244.63, and the mainland China-focused CSI 300 index gained 0.4% to 3,861.81.
Baidu jumped 5.2% to HK $81.90, and the search company is set to launch trial operations for its autonomous ride-hailing operation in Hong Kong as early as this month.
Meituan advanced 2.7% to HK $166.40 ahead of the company's quarterly results on Friday.
Investors are hoping that the online delivery platform operator is likely to report a three-fold surge in its profit.
CNSIG Anhui Hongsifang Fertilizer soared more than 15-fold to 129.34 yuan on the first day of trading in Shanghai.
The fertilizer company placed 50 million shares in its initial public offering priced at 7.98 yuan per share.
India Indexes Extend 3-Day Gains After Crude Oil and Gold Prices Weaken
Arun Goswami
26 Nov, 2024
Mumbai
Stocks in Mumbai traded higher following a sharp decline in crude oil and gold prices in international markets.
The Sensex index increased 0.3% to 80,363.24, and the Nifty index edged up 0.3% to 24,302.85.
Crude oil prices in London and New York dropped more than $3 a barrel on reports that Israel's military and Hezbollah are nearing a ceasefire agreement as early as this week.
The ceasefire agreement could lower tensions in the Middle East and risks of supply disruptions in the region.
Texas crude oil prices edged down 0.4% to $69.20 in New York, and Brent crude oil fell 0.5% to $73.30 a barrel in London.
Gold approached $2,600 an ounce in New York but rebounded to $2,630.39 an ounce in Asian trading, following the reports of a ceasefire agreement in the Middle East and the resurgent U.S. dollar.
U.S. President-elect Donald Trump said starting his first day in office he plans to impose 25% tariffs on all shipments from Mexico and Canada and additional 10% tariffs on goods from China.
India Stock Movers
Hindustan Unilever increased 1.2% to ₹2,474.95 after the company's board approved spinning off its ice cream business as a separate listed company.
Vedanta decreased 0.2% to ₹444.50, and the resource company is likely to access the international bond market next week to raise as much as $500 million.
The bond offering will test the high-yield market's appetite for Indian offerings following the U.S. allegations of bribery and fraud schemes against the Adani Group.
Interglobe Aviation gained 0.7% to ₹4,274.50, and the airline struck a deal with Japan Airlines, which will provide access to 18 destinations in India.
Edelweiss Financial Services advanced 2.2% to ₹108.10, and the financial service company is looking to sell a minority stake in its mutual fund company.
Ashoka Buildcon inched higher 3.8% to ₹242.0, and the company won a project worth ₹1,391 crore to build a road in West Bengal from the National Highways Authority of India.
KEC International traded higher by 0.5% to ₹1,055.50 after the company won two new orders totaling 1,114 crore in several of its business segments.
India Indexes Extend 3-Day Gains After Crude Oil and Gold Prices Weaken
Arun Goswami
26 Nov, 2024
Mumbai
Stocks in Mumbai traded higher following a sharp decline in crude oil and gold prices in international markets.
The Sensex index increased 0.3% to 80,363.24, and the Nifty index edged up 0.3% to 24,302.85.
Crude oil prices in London and New York dropped more than $3 a barrel on reports that Israel's military and Hezbollah are nearing a ceasefire agreement as early as this week.
The ceasefire agreement could lower tensions in the Middle East and risks of supply disruptions in the region.
Texas crude oil prices edged down 0.4% to $69.20 in New York, and Brent crude oil fell 0.5% to $73.30 a barrel in London.
Gold approached $2,600 an ounce in New York but rebounded to $2,630.39 an ounce in Asian trading, following the reports of a ceasefire agreement in the Middle East and the resurgent U.S. dollar.
U.S. President-elect Donald Trump said starting his first day in office he plans to impose 25% tariffs on all shipments from Mexico and Canada and additional 10% tariffs on goods from China.
India Stock Movers
Hindustan Unilever increased 1.2% to ₹2,474.95 after the company's board approved spinning off its ice cream business as a separate listed company.
Vedanta decreased 0.2% to ₹444.50, and the resource company is likely to access the international bond market next week to raise as much as $500 million.
The bond offering will test the high-yield market's appetite for Indian offerings following the U.S. allegations of bribery and fraud schemes against the Adani Group.
Interglobe Aviation gained 0.7% to ₹4,274.50, and the airline struck a deal with Japan Airlines, which will provide access to 18 destinations in India.
Edelweiss Financial Services advanced 2.2% to ₹108.10, and the financial service company is looking to sell a minority stake in its mutual fund company.
Ashoka Buildcon inched higher 3.8% to ₹242.0, and the company won a project worth ₹1,391 crore to build a road in West Bengal from the National Highways Authority of India.
KEC International traded higher by 0.5% to ₹1,055.50 after the company won two new orders totaling 1,114 crore in several of its business segments.
U.S. and Global Markets Retain Upward Bias, Gold and Oil Drop 3%
Alexander Garcia
25 Nov, 2024
Miami
Stocks on Wall Street extended previous week's gains after market sentiment reversed sharply in Friday's trading.
On Friday, Wall Street indexes resumed their upward climb after a private survey showed business activities expanded at the fastest pace in more than two years in November.
The investor mood reversed sharply, driven by the optimism about potential interest rate cuts, stronger economic growth, and pro-business policies.
In Monday's trading, market sentiment was further bolstered after President-elect Donald Trump appointed a seasoned financial executive and raised hopes to curb his extreme economic agenda, tackle rising defense spending, and cut the federal government deficit.
The S&P 500 index and the Nasdaq Composite advanced 0.5%, and Trump announced his plans to nominate Scot Bessent as Treasury secretary.
Investors hoped that the appointment of Bessent, founder of the hedge fund manager, Key Square Group, could mitigate some of President-elect Trump's trade protectionist policies.
Financial markets are closed on Thursday to observe the Thanksgiving holiday and close early on Friday, and trading volume on Wall Street is expected to be light this week.
In the holiday-shortened week, investors are looking forward to the release of FOMC meeting minutes, PCE inflation data, personal income and outlay figures, and a second estimate on the third quarter GDP.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.4% to $5,993.76, the Nasdaq Composite rose 0.5% to 19,101.23, and the Russell 2000 index inched higher 2.4% to 2,465.21.
The Russell 2000 index hits a new intraday record high on market optimism about the possible tax cuts under the next administration and additional interest rate cuts by the Federal Reserve.
The yield on 2-year Treasury notes edged higher to 4.37%, 10-year Treasury notes inched lower to 4.37%, and 30-year Treasury bonds decreased to 4.54%.
Crude oil and precious metals fell nearly 3% on profit-taking and on news Israel's military is nearing a ceasefire agreement with the Lebanon-based military group Hezbollah.
WTI crude oil decreased $2.18 to $69.06 a barrel, and natural gas prices edged up 32 cents to $3.44 a thermal unit.
Gold decreased by $82.85 to $2,632.66 an ounce, and silver declined by $1.19 to $30.15.
The dollar index, which weighs the US currency against a basket of foreign currencies, edged lower to 106.95.
U.S. Stock Movers
Bath & Body Works jumped 14.5% to $34.65 after the specialty retailer reported better-than-expected results in the third quarter.
Revenue in the fiscal third quarter, with 13 weeks ending on November 2, increased 3% to $1.61 billion from $1.56 billion, net income declined to $106 million from $119 million, and diluted earnings per share dropped to 49 cents from 52 cents a year ago.
The company estimated the fourth quarter 2024 net sales to decline between 4.5% and 6.5% from $2.91 billion a year ago, largely because of a shift in calendar.
Fourth quarter net sales are likely to be negatively impacted by 500 basis points because of the extra one week in the quarter a year ago.
Fourth quarter earnings per diluted share are expected to be between $1.94 and $2.07, compared to $2.55 in the fourth quarter 2023 and adjusted earnings per diluted share of $2.06 in the fourth quarter 2023.
Nordstrom and Dell Technologies are among the leading companies scheduled to release earnings this week.
European Market Indexes Advance, Spain's Producer Price Deflation Extends to 20th Month
Stock market indexes in Europe advanced and extended previous week's gains as investors debated future rate paths amid a weakening economic backdrop.
Benchmark indexes in Paris, Frankfurt, Milan, and London edged higher, and the euro struggled near a three-year low as private sector activities remain depressed and consumer spending growth muted.
Global markets have been volatile over the last three weeks as investors worry about the U.S. trade policy uncertainty under the next administration, rising trade tensions with China, and deepening Russia-NATO war in Ukraine.
This week, investors are looking forward to the release of preliminary inflation reports in the eurozone, Spain, France, and the Netherlands.
In Germany, investors are looking forward to the release of retail sales, unemployment, and the consumer confidence index.
Spain's PPI Deflation Extends to 20th Month In October
Spain's producer price deflation extended to the 20th month in a row in October, the National Statistics Institute reported Monday.
The annual producer price inflation declined to 3.9% in October, following a 5.2% fall in the previous month, driven by a decline in energy prices of 13.9% compared to a fall of 16.9% in the previous month.
Excluding energy, producer prices rose 0.4% in October, matching the rate in the previous month.
Europe Indexes and Yields
The DAX index increased by 0.5% to 19,419.13; the CAC-40 index rose by 0.2% to 7,268.10; and the FTSE 100 index advanced by 0.5% to 8,303.45.
The yield on 10-year German bonds edged higher to 2.26%, French bonds inched up to 3.06%, the UK gilts edged higher to 4.38%, and Italian bonds increased to 3.52%.
The euro edged lower to $1.04; the British pound inched down to $1.24; and the U.S. dollar strengthened to 88.95 Swiss cents.
Brent crude decreased $2.11 to $73.06 a barrel, and the Dutch TTF natural gas rose by €0.69 to €47.59 per MWh.
Europe Stock Movers
Anglo American plc increased 1.9% to 2,403.0 pence after Peabody Energy agreed to acquire the company's coal mines in Australia for $3.78 billion.
Atos SE soared 115.7% to €0.34 after the French government proposed to acquire advanced computing activities included in its BDS unit for €500 million.
Airbus SE increased 0.7% to €138.94 after the company launched its second tranche of stock buyback program totaling about 2.1 million shares between November 25 and January 24, 2025.
Kingfisher plc plunged 14% to 253.53 pence after the home improvement retailer lowered its profit outlook.
Commerzbank declined 5.4% to €14.52 after German finance minister Joerg Kukies said Italy-based UniCredit is not likely to go ahead with its plans to acquire the bank because of objections raised by the German government.
Automakers advanced following reports that China and the European Union are nearing a solution to avoid tariffs on electric vehicles imported from China.
Mercedes-Benz Group advanced 0.1% to €52.30, BMW gained 0.6% to €68.22, Volkswagen AG fell 0.2% to €81.64, and Renault SA decreased 2.7% to €39.22.
Japan Indexes Rebounded 1.5% as Politicians Negotiated Policy Outlines Ahead of Diet Session
Stock market indexes in Monday's trading advanced for the second session in a row, mirroring gains in New York.
The Nikkei 225 stock average gained 1.7%, and the broader Topix index increased 1.1% following strong U.S. economic data and continued optimism about the U.S. election results.
Investors also reviewed the announcements from the ruling LDP-led coalition supporting additional stimulus supporting low-income populations and raised the income tax threshold from 1.03 million yen, or about $6,600, ahead of the start of the next Diet session on November 28.
The Japanese yen traded at 154.74 against the U.S. dollar amid growing speculation that the finance ministry and the Bank of Japan may be forced to conduct a second market intervention this year.
Japan Stock Movers
The Nikkei 225 index soared 1.7% to 38,933.83, and the broader Topix index advanced 1.1% to 2,725.96.
Tech stocks were among the leading gainers in Tokyo following a rise in the tech sector in Friday's trading in New York.
Tokyo Electron increased 4% to ¥23,130.0, Advantest Corp fell 2.4% to ¥9,221.0, Disco Corp. inched higher 0.6% to ¥42,860.0, and Lasertec Corporation gained 2% to ¥17,660.0.
Toyota Motor gained 1.4% to ¥2,702.50, Honda Motor inched higher 0.5% to ¥1,369.50, and Nissan Motor fell 0.1% to ¥406.20.
Bank stocks hovered near record highs amid expectations of higher interest rates over the next year.
Sumitomo Mitsui Financial increased 1.6% to ¥3,721.0, Mitsubishi UFJ advanced 0.01% to ¥1,825.50, and Mizuho Financial edged down 0.3% to ¥3,828.0.
Keisei Electric Railway jumped 14% to ¥4,381.0, and Keikyu Corp advanced 10.5% to ¥1,351.50 following the news that the activist investor Yoshiaki Murakami has taken stakes in both railroad operators.
Oriental Land jumped 3% to ¥3,483.0 in the hopes that the activist investor Murakami will convince Keisei to sell its stake in the struggling Tokyo Disneyland operator.
Hang Seng and CSI 300 Indexes Hover Near 2-Month Lows In Weak Turnover
Stock market indexes in China and Hong Kong struggled to stay above the flatline as investors stayed on the sidelines.
The Hang Seng index fell 0.5%, and the CSI 300 index dropped 0.6% amid a lack of catalysts as investors awaited more corporate results.
Investors were cautious following disappointing fiscal stimulus measures and a lack of support from policymakers in reviving consumer sentiment.
Stock trading turnover in Hong Kong continued to drift lower over the last five weeks and fell to nearly 82% of the last one month of trading.
The latest corporate earnings confirmed a lack of new domestic demand, and possible escalation of trade tensions with the United States and the European Union also contributed to the market weakness.
China Holds 1-Year MLF Rate at 2%
The People’s Bank of China held its one-year medium term-term lending rate at 2% for the second month in a row, following a record 30 basis points reduction in September,
In recent months, the central bank has been using other short term tools to inject liquidity into the financial system and announced a series of measures to support the economic growth and revive property market activities.
In the latest move, the central bank injected a total of 900 billion yuan into financial institutions through a one-year medium-term lending facility at an unchanged rate of 2.0%.
That compared with a total of 1.45 trillion yuan of MLF loans due this month, marking a net cash withdrawal of 550 billion yuan.
In addition, the central bank injected 249.3 billion yen through the seven-day reverse repo operation and held its rate at 1.5%.
China Stock Movers
The Hang Seng index declined 0.5% to 19,131.82, and the CSI 300 index fell 0.6% to 3,842.45.
Hang Seng Indexes, the manager of the benchmark index, announced changes to its widely followed Hang Seng Index.
New World Development dropped HK$6.3% to HK$6.51 after the real estate developer was dropped from the Hang Seng Index as of December 9.
New Oriental Education declined 0.6% to HK $57.36, and Kuaishou Technology increased 2.8% to HK $45.60 after the two companies were selected to be added to the city's benchmark index.
Tech companies were in focus after China launched its three-month regulatory overhaul program targeting online algorithms used in content recommendation, e-commerce platform lists, and work assignments on delivery platforms.
JD.com declined 3% to HK $133.40, Meituan eased 3.4% to $161.40, and Alibaba Group rose 1.6% to HK $82.0.
India Indexes Advance 1% After BJP-led Alliance Scored Strong Victory In Maharashtra State Polls
Stock market indexes in Mumbai opened sharply higher after the BJP-led alliance scored a strong victory in Maharashtra assembly polls.
The Sensex index gained 1.4%, and the Nifty indexes advanced 1.6% following the decisive victory of the BJP-led alliance, winning 235 of the 288 seats in Maharashtra state elections.
The strong performance of the BJP alliance sets aside the worries of the party taking a back seat in the central government and possibly reviving infrastructure development plans in the financial capital, Mumbai.
BJP's strong victory in Maharashtra following the improving performance in Haryana is likely to increase Prime Minister Narendra Modi's and his party's influence in the central government.
However, the BJP-led alliance suffered a defeat in Jharkhand with only 24 of the 88 seats in the assembly polls.
In international trading, market indexes in Asia advanced, tracking market gains in New York and Europe in Friday's trading.
India Stock Movers
The Sensex index advanced 1.4% to 80,250.93, and the Nifty index gained 1.6% to 24,266.40.
Zomato decreased 0.7% to ₹264.89, and the company is set to join the widely followed Sensex index, replacing JSW Steel as of December 23.
The index manager, Asia Indexes, the subsidiary of the Bombay Stock Exchange, announced the index change.
PVR INOX jumped 3% to ₹1,490.0 after the movie theater chain operator said it plans to invest ₹200 crore to add 100 more movie screens by the end of 2026.
The company currently operates 1,747 screens in 356 movie theaters in 111 cities across India and Sri Lanka.
Solar energy stocks were in focus after the U.S. Securities Exchange Commission and the Department of Justice levied charges of a bribery scheme and fraud against several executives of Adani Group, including its chairman, Gautam Adani.
JSW Energy increased 2% to ₹702.30, KP Energy gained 4% to ₹606.0, Urja Gas advanced 2.3% to ₹17.48, and the Indian Renewable Energy Development Agency jumped 4.7% to ₹193.93.
Bank of India gained 2.8% to ₹105.95, and this week the company is set to raise as much as ₹5,000 crore through the sale of infrastructure bonds.
Signature Global India advanced 2.2% to ₹1,327.50, and the company said it plans to launch several new residential projects worth ₹50,000 crore over the next three years in the Delhi-NCR region.
Patanjali Ayurved increased 0.2% to ₹1,795.0 after the consumer goods company reported a strong rise in sales and earnings in the September quarter.
Revenue in the fiscal third quarter increased 23% to ₹9,335 crore, and net income soared five-fold to ₹2,901 crore, driven by a rise in other income.
U.S. and Global Markets Retain Upward Bias, Gold and Oil Drop 3%
Alexander Garcia
25 Nov, 2024
Miami
Stocks on Wall Street extended previous week's gains after market sentiment reversed sharply in Friday's trading.
On Friday, Wall Street indexes resumed their upward climb after a private survey showed business activities expanded at the fastest pace in more than two years in November.
The investor mood reversed sharply, driven by the optimism about potential interest rate cuts, stronger economic growth, and pro-business policies.
In Monday's trading, market sentiment was further bolstered after President-elect Donald Trump appointed a seasoned financial executive and raised hopes to curb his extreme economic agenda, tackle rising defense spending, and cut the federal government deficit.
The S&P 500 index and the Nasdaq Composite advanced 0.5%, and Trump announced his plans to nominate Scot Bessent as Treasury secretary.
Investors hoped that the appointment of Bessent, founder of the hedge fund manager, Key Square Group, could mitigate some of President-elect Trump's trade protectionist policies.
Financial markets are closed on Thursday to observe the Thanksgiving holiday and close early on Friday, and trading volume on Wall Street is expected to be light this week.
In the holiday-shortened week, investors are looking forward to the release of FOMC meeting minutes, PCE inflation data, personal income and outlay figures, and a second estimate on the third quarter GDP.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.4% to $5,993.76, the Nasdaq Composite rose 0.5% to 19,101.23, and the Russell 2000 index inched higher 2.4% to 2,465.21.
The yield on 2-year Treasury notes edged higher to 4.37%, 10-year Treasury notes inched lower to 4.37%, and 30-year Treasury bonds decreased to 4.54%.
Crude oil and precious metals fell nearly 3% on profit-taking and on news Israel's military is nearing a ceasefire agreement with the Lebanon-based military group Hezbollah.
WTI crude oil decreased $2.18 to $69.06 a barrel, and natural gas prices edged up 32 cents to $3.44 a thermal unit.
Gold decreased by $82.85 to $2,632.66 an ounce, and silver declined by $1.19 to $30.15.
The dollar index, which weighs the US currency against a basket of foreign currencies, edged lower to 106.95.
U.S. Stock Movers
Bath & Body Works jumped 14.5% to $34.65 after the specialty retailer reported better-than-expected results in the third quarter.
Revenue in the fiscal third quarter, with 13 weeks ending on November 2, increased 3% to $1.61 billion from $1.56 billion, net income declined to $106 million from $119 million, and diluted earnings per share dropped to 49 cents from 52 cents a year ago.
The company estimated the fourth quarter 2024 net sales to decline between 4.5% and 6.5% from $2.91 billion a year ago, largely because of a shift in calendar.
Fourth quarter net sales are likely to be negatively impacted by 500 basis points because of the extra one week in the quarter a year ago.
Fourth quarter earnings per diluted share are expected to be between $1.94 and $2.07, compared to $2.55 in the fourth quarter 2023 and adjusted earnings per diluted share of $2.06 in the fourth quarter 2023.
Nordstrom and Dell Technologies are among the leading companies scheduled to release earnings this week.
European Market Indexes Advance, Spain's Producer Price Deflation Extends to 20th Month
Stock market indexes in Europe advanced and extended previous week's gains as investors debated future rate paths amid a weakening economic backdrop.
Benchmark indexes in Paris, Frankfurt, Milan, and London edged higher, and the euro struggled near a three-year low as private sector activities remain depressed and consumer spending growth muted.
Global markets have been volatile over the last three weeks as investors worry about the U.S. trade policy uncertainty under the next administration, rising trade tensions with China, and deepening Russia-NATO war in Ukraine.
This week, investors are looking forward to the release of preliminary inflation reports in the eurozone, Spain, France, and the Netherlands.
In Germany, investors are looking forward to the release of retail sales, unemployment, and the consumer confidence index.
Spain's PPI Deflation Extends to 20th Month In October
Spain's producer price deflation extended to the 20th month in a row in October, the National Statistics Institute reported Monday.
The annual producer price inflation declined to 3.9% in October, following a 5.2% fall in the previous month, driven by a decline in energy prices of 13.9% compared to a fall of 16.9% in the previous month.
Excluding energy, producer prices rose 0.4% in October, matching the rate in the previous month.
Europe Indexes and Yields
The DAX index increased by 0.5% to 19,419.13; the CAC-40 index rose by 0.2% to 7,268.10; and the FTSE 100 index advanced by 0.5% to 8,303.45.
The yield on 10-year German bonds edged higher to 2.26%, French bonds inched up to 3.06%, the UK gilts edged higher to 4.38%, and Italian bonds increased to 3.52%.
The euro edged lower to $1.04; the British pound inched down to $1.24; and the U.S. dollar strengthened to 88.95 Swiss cents.
Brent crude decreased $2.11 to $73.06 a barrel, and the Dutch TTF natural gas rose by €0.69 to €47.59 per MWh.
Europe Stock Movers
Anglo American plc increased 1.9% to 2,403.0 pence after Peabody Energy agreed to acquire the company's coal mines in Australia for $3.78 billion.
Atos SE soared 115.7% to €0.34 after the French government proposed to acquire advanced computing activities included in its BDS unit for €500 million.
Airbus SE increased 0.7% to €138.94 after the company launched its second tranche of stock buyback program totaling about 2.1 million shares between November 25 and January 24, 2025.
Kingfisher plc plunged 14% to 253.53 pence after the home improvement retailer lowered its profit outlook.
Commerzbank declined 5.4% to €14.52 after German finance minister Joerg Kukies said Italy-based UniCredit is not likely to go ahead with its plans to acquire the bank because of objections raised by the German government.
Automakers advanced following reports that China and the European Union are nearing a solution to avoid tariffs on electric vehicles imported from China.
Mercedes-Benz Group advanced 0.1% to €52.30, BMW gained 0.6% to €68.22, Volkswagen AG fell 0.2% to €81.64, and Renault SA decreased 2.7% to €39.22.
Japan Indexes Rebounded 1.5% as Politicians Negotiated Policy Outlines Ahead of Diet Session
Stock market indexes in Monday's trading advanced for the second session in a row, mirroring gains in New York.
The Nikkei 225 stock average gained 1.7%, and the broader Topix index increased 1.1% following strong U.S. economic data and continued optimism about the U.S. election results.
Investors also reviewed the announcements from the ruling LDP-led coalition supporting additional stimulus supporting low-income populations and raised the income tax threshold from 1.03 million yen, or about $6,600, ahead of the start of the next Diet session on November 28.
The Japanese yen traded at 154.74 against the U.S. dollar amid growing speculation that the finance ministry and the Bank of Japan may be forced to conduct a second market intervention this year.
Japan Stock Movers
The Nikkei 225 index soared 1.7% to 38,933.83, and the broader Topix index advanced 1.1% to 2,725.96.
Tech stocks were among the leading gainers in Tokyo following a rise in the tech sector in Friday's trading in New York.
Tokyo Electron increased 4% to ¥23,130.0, Advantest Corp fell 2.4% to ¥9,221.0, Disco Corp. inched higher 0.6% to ¥42,860.0, and Lasertec Corporation gained 2% to ¥17,660.0.
Toyota Motor gained 1.4% to ¥2,702.50, Honda Motor inched higher 0.5% to ¥1,369.50, and Nissan Motor fell 0.1% to ¥406.20.
Bank stocks hovered near record highs amid expectations of higher interest rates over the next year.
Sumitomo Mitsui Financial increased 1.6% to ¥3,721.0, Mitsubishi UFJ advanced 0.01% to ¥1,825.50, and Mizuho Financial edged down 0.3% to ¥3,828.0.
Keisei Electric Railway jumped 14% to ¥4,381.0, and Keikyu Corp advanced 10.5% to ¥1,351.50 following the news that the activist investor Yoshiaki Murakami has taken stakes in both railroad operators.
Oriental Land jumped 3% to ¥3,483.0 in the hopes that the activist investor Murakami will convince Keisei to sell its stake in the struggling Tokyo Disneyland operator.
Hang Seng and CSI 300 Indexes Hover Near 2-Month Lows In Weak Turnover
Stock market indexes in China and Hong Kong struggled to stay above the flatline as investors stayed on the sidelines.
The Hang Seng index fell 0.5%, and the CSI 300 index dropped 0.6% amid a lack of catalysts as investors awaited more corporate results.
Investors were cautious following disappointing fiscal stimulus measures and a lack of support from policymakers in reviving consumer sentiment.
Stock trading turnover in Hong Kong continued to drift lower over the last five weeks and fell to nearly 82% of the last one month of trading.
The latest corporate earnings confirmed a lack of new domestic demand, and possible escalation of trade tensions with the United States and the European Union also contributed to the market weakness.
China Holds 1-Year MLF Rate at 2%
The People’s Bank of China held its one-year medium term-term lending rate at 2% for the second month in a row, following a record 30 basis points reduction in September,
In recent months, the central bank has been using other short term tools to inject liquidity into the financial system and announced a series of measures to support the economic growth and revive property market activities.
In the latest move, the central bank injected a total of 900 billion yuan into financial institutions through a one-year medium-term lending facility at an unchanged rate of 2.0%.
That compared with a total of 1.45 trillion yuan of MLF loans due this month, marking a net cash withdrawal of 550 billion yuan.
In addition, the central bank injected 249.3 billion yen through the seven-day reverse repo operation and held its rate at 1.5%.
China Stock Movers
The Hang Seng index declined 0.5% to 19,131.82, and the CSI 300 index fell 0.6% to 3,842.45.
Hang Seng Indexes, the manager of the benchmark index, announced changes to its widely followed Hang Seng Index.
New World Development dropped HK$6.3% to HK$6.51 after the real estate developer was dropped from the Hang Seng Index as of December 9.
New Oriental Education declined 0.6% to HK $57.36, and Kuaishou Technology increased 2.8% to HK $45.60 after the two companies were selected to be added to the city's benchmark index.
Tech companies were in focus after China launched its three-month regulatory overhaul program targeting online algorithms used in content recommendation, e-commerce platform lists, and work assignments on delivery platforms.
JD.com declined 3% to HK $133.40, Meituan eased 3.4% to $161.40, and Alibaba Group rose 1.6% to HK $82.0.
India Indexes Advance 1% After BJP-led Alliance Scored Strong Victory In Maharashtra State Polls
Stock market indexes in Mumbai opened sharply higher after the BJP-led alliance scored a strong victory in Maharashtra assembly polls.
The Sensex index gained 1.4%, and the Nifty indexes advanced 1.6% following the decisive victory of the BJP-led alliance, winning 235 of the 288 seats in Maharashtra state elections.
The strong performance of the BJP alliance sets aside the worries of the party taking a back seat in the central government and possibly reviving infrastructure development plans in the financial capital, Mumbai.
BJP's strong victory in Maharashtra following the improving performance in Haryana is likely to increase Prime Minister Narendra Modi's and his party's influence in the central government.
However, the BJP-led alliance suffered a defeat in Jharkhand with only 24 of the 88 seats in the assembly polls.
In international trading, market indexes in Asia advanced, tracking market gains in New York and Europe in Friday's trading.
India Stock Movers
The Sensex index advanced 1.4% to 80,250.93, and the Nifty index gained 1.6% to 24,266.40.
Zomato decreased 0.7% to ₹264.89, and the company is set to join the widely followed Sensex index, replacing JSW Steel as of December 23.
The index manager, Asia Indexes, the subsidiary of the Bombay Stock Exchange, announced the index change.
PVR INOX jumped 3% to ₹1,490.0 after the movie theater chain operator said it plans to invest ₹200 crore to add 100 more movie screens by the end of 2026.
The company currently operates 1,747 screens in 356 movie theaters in 111 cities across India and Sri Lanka.
Solar energy stocks were in focus after the U.S. Securities Exchange Commission and the Department of Justice levied charges of a bribery scheme and fraud against several executives of Adani Group, including its chairman, Gautam Adani.
JSW Energy increased 2% to ₹702.30, KP Energy gained 4% to ₹606.0, Urja Gas advanced 2.3% to ₹17.48, and the Indian Renewable Energy Development Agency jumped 4.7% to ₹193.93.
Bank of India gained 2.8% to ₹105.95, and this week the company is set to raise as much as ₹5,000 crore through the sale of infrastructure bonds.
Signature Global India advanced 2.2% to ₹1,327.50, and the company said it plans to launch several new residential projects worth ₹50,000 crore over the next three years in the Delhi-NCR region.
Patanjali Ayurved increased 0.2% to ₹1,795.0 after the consumer goods company reported a strong rise in sales and earnings in the September quarter.
Revenue in the fiscal third quarter increased 23% to ₹9,335 crore, and net income soared five-fold to ₹2,901 crore, driven by a rise in other income.