Market Update
Nikkei 225 In Tokyo Closed at New Record High, Policy Uncertainties Keep China Stocks Down
Arjun Pandit
04 Mar, 2024
Mumbai
In Asia, bench market indexes in Japan advanced on the speculation that the government is ready to declare the end of deflation, Chinese lawmakers gathered for their annual legislative meeting, and India's market looked higher.
The benchmark Nikkei index crossed 40,000 for the first time in the hopes of more support from the government and enthusiasm about the artificial intelligence boom lifting the sale of semiconductor chip-making equipment.
The Nikkei 225 average gained 0.5% to 40,099.09, and the TOPIX edged slightly lower by 0.07% to 2,707.47.
Tokyo Electron, Disco Corp., Screen Holdings, and Softbank gained between 1.3% and 3%.
The current market rally in benchmark indexes in Japan is largely driven by the hopes of sustained corporate governance reforms, a 34-year low yen, and the Nippon Individual Savings Account for individual investors.
Global funds' allocation to Japanese equities is still lower than benchmark weights, suggesting there is room for increasing allocation to Japan if corporate results continue to outperform expectations.
The Nikkei Stock Average has gained 19% in the year so far, following a 28% rally in 2023, and surpassed the previous high set in December 1989.
Japanese stocks are still viewed as reasonably priced, with a price-to-earnings ratio just above 17 and significantly lower than 60 at the height of the market bubble 34 years ago.
The weakening yen has also supported earnings growth at Japanese companies, but the rapid decline in the yen could become a negative factor for foreign investors, the main drivers of the current market rally.
China's Policy Uncertainties Keep Indexes Down
Market indexes in China drifted lower after trading mixed in the previous week as investors looked ahead to the release of economic targets for the current year and policies to revive property markets and stabilize financial markets.
Chinese lawmakers gather in Beijing this week for their annual legislative meetings, widely known as "Two Sessions" or "lianghui."
Lawmakers are likely to finalize the annual economic growth target, announce high-level personnel appointments, and ramp up national security rhetoric involving China's commitment to taking control of Taiwan.
Investors are also awaiting clarity on the government stimulus plans to revive the faltering economic rebound and step up market intervention to arrest falling market indexes.
Policymakers are expected to announce an annual economic growth target rate of at least 5% and a budget deficit of around 3% of gross domestic product.
The Chinese government's economic growth targets are perceived with deep skepticism, reflecting a widespread practice of managing figures to satisfy the leadership's objectives.
The CSI 300 index added 0.2% to 3,544.10, and the Hang Seng index declined 0.2% to 16,552.81.
Tech stocks were among the leading decliners in Monday's trading, and Tencent, Alibaba Group, and Trip.com declined between 1% and 3%.
EV makers were on the slide amid growing price competition in China's crowded EV market.
Li Auto fell 5%, BYD declined 1.5%, and Geely Automotive fell 1.2%.
India Indexes Traded Around Record Highs
Stocks in Mumbai opened higher in Monday's trading as investors digested the economic updates of last week and reassessed the economic growth and interest rate outlook.
The Sensex and the Nifty indexes edged higher by 0.1% and extended the previous week's gains, and investors focused on large-cap stocks in power, retail, consumer products, and financial services companies.
The faster-than-expected increase in economic growth of 8.4% in the December quarter overshadowed the muted increase in core industrial production in January.
Market sentiment remained positive despite the net investment outflow by foreign investors in January, as investors estimated higher economic growth would support growth in corporate earnings in the March quarter.
The Sensex index increased 0.1% to 73,875.02, and the Nifty index rose 0.2% to 22,413.0.
On the Mumbai stock exchange, 229 stocks traded at their 52-week highs and 18 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds increased to 7.06%, and the Indian rupee strengthened to ₹82.87 against the U.S. dollar.
Movers: Asian Paints, Gujarat Ambuja, KPI Green, Paytm, Patel Engineering, MOIL, NTPC, Swan Energy
Arun Goswami
04 Mar, 2024
Mumbai
Benchmark indexes in Mumbai lacked direction in Monday's trading and traded around record highs as investors reviewed the latest updates on economic growth and core industrial output.
The Sensex index increased 0.1% to 73,875.02, and the Nifty index rose 0.2% to 22,413.0.
On the Mumbai stock exchange, 229 stocks traded at their 52-week highs and 18 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds increased to 7.06%, and the Indian rupee strengthened to ₹82.87 against the U.S. dollar.
One 97 Communications declined 1% to ₹409.60 after the Financial Intelligence Unit of India fined the company 5.49 crore for failing to meet the requirements under the Prevention of Money Laundering Act.
Asian Paints decreased 0.5% to ₹2,842.35 after the company said it plans to invest 2,000 crore to set up a water-based paint production facility with an annual capacity of 400,000 kiloliters.
Swan Energy declined 1.8% to ₹718.0 after the company's LNG subsidiary said it has fully repaid its ₹2,206 crore loan to a consortium of banks, lowering its total debt to ₹1,675 crore.
MOIL increased 4.4% to ₹294.30 after the largest manganese ore mining company said February production increased 15% to a record 1,51,000 tons.
KPI Green Energy increased 1.4% to ₹1,783.0 after the company signed an agreement with Gujarat Urja Vikas Nigam to sell 200 MW of alternate current with a peak power of 240 MW from its 800 MW solar power plant projects.
Gujarat Ambuja Exports gained 0.8% to ₹407.20 after the company inaugurated a 120-ton liquid glucose unit at its West Bengal facility, increasing its total daily capacity to 900 across five manufacturing locations.
Patel Engineering advanced 2.7% to ₹69.75 after the company's joint venture won a ₹523 crore RCC protection wall construction project in Telangana.
The company's share of the project totaled ₹268 crore.
R K Swamy launched its bidding period for its ₹423 crore public offering with a price band between ₹270 and ₹287 per share scheduled to be listed on March 12.
The integrated marketing services provider said that the company plans to raise ₹173 crore and the remaining proceeds will go promoters selling their stakes in the company.
The company has already raised 187 core through an anchor investors as of March 1.
NTPC gained 3.5% to ₹354.45 after the company's board approved investment plan of ₹17,195 crore in Singrauli Super Thermal Power Project.
SJVN added 1.8% to ₹123.10 after the company's green energy subsidiary won a project to build 200 MW solar power plant with a preliminary development cost of 1,000 crore.
U.S. and World Markets Extend Weekly Gains, Investors Adjust to Higher-for-Longer Rates Expectations
Barry Adams
01 Mar, 2024
New York City
Benchmark indexes struggled near highs after they advanced for the fourth month in a row in February.
The S&P 500 index and the Nasdaq Composite edged lower in Friday's trading as investors debated interest rate paths after the alternative measure of inflation net investors' expectations on Thursday.
The market rally extended to the fourth month in February after investors piled into technology stocks deemed to benefit from the boom in artificial intelligence.
Moreover, investors held out for the Federal Reserve to cut interest rates later than previously expected after the personal consumption expenditure index accelerated in January to 0.4% but met expectations.
In February, the Nasdaq Composite soared 6.2% and the S&P 500 index advanced 5.2%, and in the week, they gained 0.6% and 0.2%, respectively.
The popular cryptocurrency Bitcoin soared in February by 45% to 62,000 and extended gains to the sixth month in a row.
U.S. indexes and Yields
The S&P 500 index increased 0.3% to 5,096.75, and the Nasdaq Composite increased 0.5% to 16,016.38.
The yield on 2-year Treasury notes decreased to 4.61%, 10-year Treasury notes inched down to 4.24%, and 30-year Treasury bonds edged down to 4.37%.
WTI crude oil increased $1.38 to $79.64 a barrel, and natural gas prices decreased 1 cent to $1.84 a thermal unit.
Gold increased by $6.40 to $2,052.09 an ounce, and silver fell 7 cents to $22.70.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.12.
U.S. Stock Movers
Dell Technologies soared 25% to $119.05 after the personal computer and enterprise server maker reported better-than-expected fourth quarter results.
The company also indicated strong demand for its high-end servers that support artificial intelligence applications.
New York Community Bancorp plunged 18.3% to $3.91 after the regional bank reported in a regulatory filing with the SEC weakness in its internal controls related to its internal loan review resulting from "ineffective oversight and risk assessment."
The bank also announced a change in its leadership and said Executive Chairman Alessandro DiNello will assume the roles of president and CEO, effective immediately.
Europe Movers: Aegon, Airbus, Daimler Truck, ITV, Rheinmetall, Rightmove, Sixt, Vallourec
Inga Muller
01 Mar, 2024
Frankfurt
European stock markets traded at or near record highs as investors shifted focus to corporate results and overlooked ongoing interest rate uncertainties.
The DAX index increased by 0.6% to 17,786.77, the CAC-40 index gained by 0.2% to 7,939.67, and the FTSE 100 index inched higher by 0.7% to 7,686.21.
For the week, the DAX index advanced 1.8%, the CAC 40 decreased 0.4%, and the FTSE 100 index dropped 0.5%.
Aegon NV decreased 3.9% to €5.33 after the Dutch insurance company reported a net loss of €199 million in the full year 2023.
Rheinmetall AG added 1.7% to €430.90, and the aerospace and defense company won an additional order to supply Skynex defense systems.
Sixt SE increased 2.9% to €89.15, and the German rental car company estimated a positive outlook for full-year revenue and earnings after reporting mixed quarterly results.
Airbus SE gained 0.2% to €153.22 after the aerospace company announced 40 firm helicopter orders and 155 commitments at the Heli-expo 2024 held in California.
Vallourec SA decreased 4.3% to €13.43, despite the French maker of tubular products reporting higher fourth-quarter profit than a year ago.
ITV plc soared 14.3% to 63.90 pence after the British media company sold its 50% stake in the joint venture Britbox to its partner BBC Studios for £255 million.
Rightmove declined 3.4% to 549.40 pence after the UK-based property listing platform estimated 2024 revenue growth between 7% and 9%.
Daimler Truck soared 14.4% to €43.22 after the company reported annual 2023 profit exceeded expectations and announced a stock buyback program and increased its dividend.
Home builders in the UK rose after home prices in the UK rose for the first time in February by 1.2% after declining eleven months in a row.
Barratt Developments rose 0.6% to 469.40 pence and Taylor Wimpey advanced 0.3% to 138.30 pence.
European Markets Trade Near Highs, Factory Activities In Spain and Italy Diverge
Bridgette Randall
01 Mar, 2024
Frankfurt
European markets advanced as investors looked beyond interest rate uncertainties, and bond yields edged lower after inflation in the eurozone eased in January.
Benchmark indexes in Frankfurt traded at new highs and in Paris flirted near recent highs after investors reviewed the latest updates on inflation, retail sales, and the jobs market.
Consumer price inflation in the eurozone eased to 2.5%, but core inflation moderated less than expected to 3.1%, and both measures of inflation indicated inflation is likely to take a while before it falls below the target rate set by the European Central Bank.
Investors overlooked the stubborn inflation and shifted their focus to the latest batch of earnings results.
Factory activities in Spain returned to expansion, but in Italy they contracted in February, according to two separate surveys released by S&P Global Friday.
The HCOB Spain Manufacturing PMI increased to 51.5 from 49.2 in January, indicating the first month of rising activities driven by growing new orders and output.
The HCOB Italy Manufacturing PMI inched higher to 48.7 in February from 48.5 in the previous month as the country continued to face weak demand and challenging macroeconomic conditions.
Europe Indexes and Yields
The DAX index increased by 0.6% to 17,786.77, the CAC-40 index gained by 0.2% to 7,939.67, and the FTSE 100 index inched higher by 0.7% to 7,686.21.
For the week, the DAX index advanced 1.8%, the CAC 40 decreased 0.4%, and the FTSE 100 index dropped 0.5%.
The yield on 10-year German bonds edged down to 2.45%; French bonds inched lower to 2.93%; the UK gilts edged lower to 4.16%; and Italian bonds inched lower to 3.90%.
The euro edged higher to $1.081, the British pound inched higher to $1.263, and the U.S. dollar weakened to 88.50 Swiss cents.
Brent crude decreased $1.04 to $82.96 a barrel, and the Dutch TTF natural gas increased by €0.34 to €25.20 per MWh.
Europe Stock Movers
Aegon NV decreased 3.9% to €5.33 after the Dutch insurance company reported a net loss of €199 million in the full year 2023.
Rheinmetall AG added 1.7% to €430.90, and the aerospace and defense company won an additional order to supply Skynex defense systems.
Sixt SE increased 2.9% to €89.15, and the German rental car company estimated a positive outlook for full-year revenue and earnings after reporting mixed quarterly results.
Airbus SE gained 0.2% to €153.22 after the aerospace company announced 40 firm helicopter orders and 155 commitments at the Heli-expo 2024 held in California.
Vallourec SA decreased 4.3% to €13.43, despite the French maker of tubular products reporting higher fourth-quarter profit than a year ago.
ITV plc soared 14.3% to 63.90 pence after the British media company sold its 50% stake in the joint venture Britbox to its partner BBC Studios for £255 million.
Rightmove declined 3.4% to 549.40 pence after the UK-based property listing platform estimated 2024 revenue growth between 7% and 9%.
China's Manufacturing Downturn Persists, India's Economic Expansion Accelerated
Arjun Pandit
01 Mar, 2024
Mumbai
Asian markets reacted to local economic news and corporate earnings on the final trading day of the week.
Investors welcomed the acceleration in economic growth in India, but the manufacturing sector struggled for the fifth month in a row in China, and the jobless rate held steady in Japan.
Nikkei In Japan Extends Weekly Gains to Close at a New Record High
Benchmark indexes in Japan advanced, and the Nikkei closed at a new record high after the weak yen, strong corporate earnings, and high expectations related to artificial intelligence supported the advance.
The Nikkei 225 jumped 2% to 39,963.07, and the Topix advanced 1.3% to 2,709.70.
For the week, the Nikkei index advanced 1.9% and the Topix index gained 1.6%.
Tech stocks pushed higher following the rise in the tech-heavy Nasdaq Composite in overnight trading in New York, after an alternative measure of inflation met the market's expectations.
Screen Holdings, Tokyo Electron, Renesas Electronics, Disco, and SoftBank advanced between 1% and 3%.
Exporters were among the leading gainers, and Sony Group, Toyota Motor, Honda Motor, Panasonic, and Kawasaki Kisen gained between 0.5% and 1.7%.
China Manufacturing Growth Worries Keep Indexes In Check
Stocks in China faced headwinds after the official survey of manufacturing showed persistent weakness in February.
The survey of business activities came ahead of the annual meeting of policymakers to set broader economic targets and direct spending to struggling industries.
The official manufacturing purchasing managers' index decreased to 49.1 in February from 49.2 in January, the National Bureau of Statistics reported Friday.
The index declined for the fifth month in a row, highlighting the difficult task ahead for policymakers despite the government pouring considerable resources into reviving the struggling sector.
The non-manufacturing index, which includes business sentiment in services and construction, advanced to 51.4 from 50.7 in January.
The official composite PMI, which measures sentiment in manufacturing and services, was unchanged at 50.9, indicating a slight growth in manufacturing and business activities.
February data are likely to be revised sharply because of the Lunar Holiday, and manufacturing estimates are unreliable during the holiday time.
The National People's Congress is scheduled to start its annual gathering on Tuesday, and policymakers are set to announce their annual economic growth targets.
Separately, Caixin General Manufacturing PMI edged higher to 50.9 in February after staying at 50.8 in the previous two months.
The index showed the strongest growth in factory activities since August 2023.
The CSI 300 index added 0.4% to 3,529.28, and the Hang Seng index advanced 0.2% to 16,538.67.
For the week, the CSI 300 index gained 1.1%, but the Hang Seng index decreased 0.3%.
Property developers continued to decline ahead of the policymakers annual meeting, and New World Development dropped more than 6% after the company reported a 25% decline in revenue in the second half of 2023.
Longfor Group, China Vanke, Sun Hung Kai, and Henderson Land Development declined between 0.2% and 1.3%.
Tech stocks traded higher, but NetEase decreased more than 3% after the online game developer reported lower-than-expected fourth-quarter revenue.
Lenovo Group advanced 4.6%, Meituan gained 2.5%, and SMIC increased 1.5%.
India Indexes Soar 1% After Economic Growth Accelerated
Stocks on Dalal Street advanced after the release of core sector output and GDP growth data.
The Sensex and the Nifty indexes advanced 0.2% in early trading amid broad buying in power, engineering, and financial stocks.
Foreign portfolio investment outflows in January kept market enthusiasm in check in today's trading.
Benchmark indexes rallied sharply between October and January, stoking fears of high valuation and driving foreign investors to direct funds to other emerging markets in Taiwan, South Korea, and Indonesia.
India witnessed an outflow of $2.99 billion, while South Korea attracted $8.4 billion, Taiwan received $4.8 billion, and Indonesia saw $1.2 billion, according to data available from Ticker.com, Bloomberg, and local stock exchanges.
December Quarter GDP Expanded 8.4%
India's GDP in the December quarter rose at a faster-than-expected pace of 8.4%, the National Statistical Office reported late Thursday.
Farm output shrank 0.8%, the service sector expanded at 7.0% and remained the main driver of the economy, and the manufacturing sector continued its double-digit growth of 11.6% for the consecutive quarter.
The manufacturing sector benefited from the steady improvement in profit margin after input cost growth remained muted and producers retained higher prices for their final products.
India Indexes and Yields
The Sensex index increased 0.9% to 73,121.61, and the Nifty index rose 0.9% to 22,182.20.
On the Mumbai stock exchange, 102 stocks traded at their 52-week highs and 18 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds increased to 7.07%, and the Indian rupee strengthened to ₹82.87 against the U.S. dollar.
India Movers: Avantel, Bajaj Auto, CG Power, Dilip Buildcon, L&T, Mahindra & Mahindra, Tips Industries
Arun Goswami
01 Mar, 2024
Mumbai
Stocks in Mumbai rebounded after the economy expanded at a faster pace in six quarters in the December quarter.
The Sensex index increased 0.9% to 73,121.61, and the Nifty index rose 0.9% to 22,182.20.
On the Mumbai stock exchange, 102 stocks traded at their 52-week highs and 18 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds increased to 7.07%, and the Indian rupee strengthened to ₹82.87 against the U.S. dollar.
Larsen & Toubro rose 2.5% to ₹3,565.0 after the company commissioned its first hydrogen electrolyser at the green hydrogen plant in Hazira, Gujarat.
CG Power and Industrial Solution advanced 7.1% to ₹475.0 after the company received approval to set up a semiconductor manufacturing unit in Gujarat.
The company, in partnership with Japan's Renesas Electronics, plans to invest ₹7,600 crore.
Tips Industries declined 2.2% to ₹504.40 after the company signed a music distribution agreement with Warner Music on all streaming applications.
Avantel increased 1% to ₹113.50 after the company won an order worth ₹5.5 crore from Garden Reach Shipbuilders.
Dilip Buildcon advanced 4% to ₹451.90 after the company's unit won a construction order worth ₹1,955 from the National Highway Authority of India.
Oil companies were in focus after the central government hiked its windfall tax on petroleum crude.
The government increased its windfall tax on petroleum crude to ₹4,600 per ton from ₹3,300 effective March 1, but the tax on diesel fuel was cut to zero from ₹1.50 per liter.
Reliance Industries increased 0.9% to ₹2,947.45, Oil India soared 6.2%, and ONGC gained 2.5% to ₹271.30.
Mahindra & Mahindra increased 0.7% to ₹1,945.05 after the vehicle maker reported unit sales increased 24% to 72,923 units in February.
Domestic utility vehicle sales increased 40% to 42,401 vehicles and commercial vehicle sales rose to 22,825 units.
Bajaj Auto added 1.8% to ₹8,047.55 after the vehicle maker reported total vehicle sales in February increased 24% to 346,682 units from 280,226 units a year ago.
Exports of 2- and 3-wheeler vehicles increased 10% to 139,768 from 126,935 units, and domestic sales surged 35% to 206,894 units from 153,291 units a year ago.
Escorts Kubota increased 1.9% to ₹2,911.15 and the company said farm equipment sales dropped 17% to 6,481 from 7,811 a year ago.
Benchmark Indexes In U.S., Europe, Japan, and China Register Solid Gains In February
Barry Adams
29 Feb, 2024
New York City
Stocks on Wall Street rebounded after the closely watched measure of inflation met the market's expectations.
The S&P 500 index inched up 0.1% and the Nasdaq Composite advanced 0.3%, and Treasury yields held steady after personal income rose, spending edged lower, and an alternative measure of watered-down inflation accelerated as expected.
Moreover, initial weekly jobless claims increased by 13,000 to 215,000 at the end of the week ending on February 24, the U.S. Department of Labor reported Thursday.
Continuing jobless claims increased by 45,000 to 1,905,000 in the previous week and advanced to the highest level since November.
The U.S. labor market is still experiencing tight labor market conditions, but multiple rate hikes over the last sixteen months have finally begun to soften labor market tightness.
Personal Income Advanced, Outlays Eased, PCE Index Accelerated
Personal income unexpectedly increased by 1.0%, while personal expenditure declined by 0.1%, according to the data released by the Bureau of Economic Analysis on Thursday.
The personal consumption expenditures price index, an alternative measure of inflation that accounts for product substitution by consumers, increased by 0.3% on the month and by 2.4% from a year ago.
The December price index was downwardly revised to an increase of 0.1%.
The core price index, which excludes food and energy, increased 0.4% for the month and rose 2.8% from a year ago as consumers continued to shift spending to services from goods.
Core inflation accelerated from an increase of 0.1% in December.
Services prices increased by 0.6% and goods prices decreased by 0.2% from the previous year, respectively, and the changes were larger when compared to the data a year ago.
Services prices rose 3.9%, and goods prices declined 0.5% from a year ago.
U.S. indexes and Yields
The S&P 500 index increased 0.1% to 5,074.96, and the Nasdaq Composite advanced 0.3% to 15,993.48.
The yield on 2-year Treasury notes decreased to 4.66%, 10-year Treasury notes inched up to 4.28%, and 30-year Treasury bonds edged down to 4.42%.
WTI crude oil decreased $0.02 to $78.52 a barrel, and natural gas prices decreased 4 cents to $1.84 a thermal unit.
Gold increased by $4.25 to $2,036.69 an ounce, and silver fell 7 cents to $22.52.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.80.
U.S. Stock Movers
Duolingo soared 20.1% to $235.56 after the language learning platform estimated strong revenue guidance in the fiscal first quarter and full-year after posting better-than-expected fourth-quarter results.
Snowflake plunged 22.9% to $177.20 after the company reported better-than-expected quarterly results and also announced the retirement of its chief executive, Frank Slootman.
The stock was also under pressure after the company estimated a weaker-than-expected product revenue outlook in the first quarter.
Okta soared 24.5% to $108.50 after the identity software management company reported better-than-expected quarterly results and estimated higher-than-expected quarterly results.
C3.ai surged 19% to $35.07 after the artificial intelligence company reported better-than-expected quarterly results.
Salesforce inched up 0.5% to $301.36 after the customer relationship management software reported better-than-expected quarterly results but guided revenue growth of less than 9% in the current fiscal year.
Inflation Cooled in France and Spain, German Retail Sales Contracted In January
European markets traded higher and bond yields rose after a flood of economic data and earnings results.
Benchmark indexes in Paris, Frankfurt, and London edged higher after inflation in Spain cooled more than expected and in France slowed to its weakest level since September 2021.
The Swiss GDP expanded 0.3% from the previous month and rose 0.6% from a year ago in the final quarter of 2023, the State Secretariat for Economic Affairs reported Thursday.
For all of 2023, Swiss GDP rose 0.8% from a year ago after industrial and service sectors rebounded and exports held up despite macroeconomic uncertainties.
German Unemployment Rate Rises to a 3-year High, French Payrolls Stable
France confirmed payroll employment in the fourth quarter was stable, as previously estimated.
France added 11,900 net new jobs in the fourth quarter, after adding 60,800 in the third quarter compared to the previous quarter, respectively.
Payrolls expanded by 1.3 million or 5% in the fourth quarter compared to the pre-Covid fourth quarter in 2019, and about one in three jobs are apprentice contracts.
Germany's unemployment rate expanded to nearly a 3-year high of 5.9% in February from 5.8% in January, destatis reported Thursday.
German Retail Sales Contracted In January
Germany retail sales decreased 0.4% from the previous month in January as high borrowing costs and elevated inflation forced consumers to stick to basic items, destatis, or the Federal Statistics Office, reported Thursday.
Retail sales declined for the third month in a row and fell in eight of the last twelve months.
From a year ago, retail sales declined 1.4% in January, after falling 1.7% in each of the previous two months, as consumers battled rising costs of food, energy, and housing.
For all of 2023, retail sales declined, deepening to 3.3% from a fall of 0.7% in 2022.
Spain's Inflation Cools to a 6-month Low In February
Spain's annual consumer price inflation eased to a six-month low of 2.8% in February, down from 3.4% in January, the National Statistics Institute reported Thursday.
Consumer inflation increased by 0.3% when measured on a monthly basis.
The core rate of inflation, which excludes food and energy prices, eased for the seventh month in a row to 3.4%.
French Inflation Eased Due to Base Effects
France's annual inflation rate eased to 2.9% in February from 3.1% in the previous month, the statistical agency INSEE reported Thursday.
Consumer price inflation slowed in February largely because of the higher base in the previous year, and compared to the previous month, inflation rose by 0.8%.
Food, which is about 15% of the consumer basket, saw inflation rise at a slower pace of 3.6% compared to 5.6% a year ago.
For services, which account for about 51% of consumption, inflation eased to 3.1% from 3.2% in the previous year.
Over the year, the harmonized consumer price index increased by 3.1% in February after a 3.4% rise in January, and from the previous month, inflation rebounded by 0.9% after falling 0.2% the previous month.
Europe Indexes and Yields
The DAX index increased by 0.4% to 17,678.19, the CAC-40 index decreased by 0.3% to 7,927.43, and the FTSE 100 index inched higher by 0.2% to 7,639.69.
The yield on 10-year German bonds edged up to 2.50%; French bonds inched higher to 2.98%; the UK gilts edged lower to 4.26%; and Italian bonds inched lower to 3.95%.
The euro edged higher to $1.084, the British pound inched higher to $1.266, and the U.S. dollar weakened to 87.99 Swiss cents.
Brent crude increased $0.13 to $82.29 a barrel, and the Dutch TTF natural gas decreased by €0.32 to €25.30 per MWh.
Europe Stock Movers
International Consolidated Airlines eased 0.7% to 151.74 pence after the parent company of British Air and Iberian Airlines reported a surge in profit.
Air France KLM dropped 8.2% to €10.47 after the international airline swung to a loss in the fourth quarter.
Nordex jumped 4.8% to €10.10 after the German wind turbine maker narrowed its full-year net loss in the previous fiscal year.
CRH PLC rose 7.2% to 6,646.0 pence after the Ireland-based diversified construction material maker reported a rise in pre-tax profit.
Total revenue in 2023 increased 7% to $34.9 billion from $32.7 billion, net income from continuing operations increased 14% to $3.1 billion from $2.7 billion, and diluted earnings per share rose to $4.36 from $3.58 a year ago.
Retail Sales Advance but Industrial Output Falls in Japan
Stocks in Asia lacked direction, and investors reacted to domestic corporate and economic news.
Benchmark indexes in Japan declined after industrial production fell for the third month in a row; in China, they edged slightly higher in lackluster trading; and in India, they traded around flatline amid a lack of fresh market catalysts after the end of the earnings season.
Nikkei In Japan Extend Losses to Second Consecutive Session
Stocks in Tokyo declined for the second day in a row, and benchmark indexes edged lower following weak markets in New York.
Investors also reviewed the latest update on retail sales and industrial production, but market sentiment remained cautious ahead of the release of inflation data in the U.S.
Retail sales in Japan rose 2.3% from a year ago in January, following the upwardly revised 2.4% increase in December, the Ministry of Economy, Trade, and Industry reported Thursday.
Retail sales rose for the 23rd month in a row as consumption continued to rebound since the decline during the pandemic era over the two years between 2020 and 2021.
A separate report by the government agency showed industrial production declined 7.5% from the previous month in January after rising 1.4% in the previous month.
On an annual basis, industrial production declined 1.5%, after declining 1.0% in December and extending contraction for the third month in a row.
The Nikkei 225 average declined 0.1% to 39,172.78, and the Topix index added 0.1% to 2,677.82.
China Stocks Turned Higher In Weak Trading, Hang Seng Gained 6% In February
Market indexes in Shanghai and Hong Kong edged higher on the hopes that the regulators would take more steps and China-controlled funds would provide capital to stabilize financial markets.
Property stocks advanced for the second day in a row in Hong Kong after the local government removed decade-old measures to cool residential property speculation.
The CSI 300 index added 0.9% to 3,481.52, and the Hang Seng index added 0.2% to 16,561.53.
Longfor, China Vanke, China Resource Land, Sun Hung Kai, and Henderson Land advanced between 0.3% and 0.8%.
Tech stocks were mixed, and Baidu declined 8.1% after the largest search engine operator in China reported revenue in the fourth quarter increased by 6% but net income dropped by half.
Xinyi Solar soared 22% to HK$4.68 after the company reported better-than-expected quarterly earnings due to a higher margin.
Hong Kong Exchanges Annual Earnings Rebound
Hong Kong Exchanges & Clearing increased 0.1% to $245.0 after the company reported an 18% increase in annual profit to HK$11.9 billion, or HK$9.37 per share, meeting market expectations.
The company proposed to pay a second interim cash dividend of HK$3.91, increasing the annual total to HK$8.41 and higher than HK$7.14 in 2022.
The exchange operator's annual earnings were aided by HK$1.5 billion in net investment income in its global stock and bond portfolio, compared to a loss of HK$48 million in the previous year.
The steady decline in trading activity by 16% to HK$105 billion in 2023 also negatively impacted the company's core revenue by 18%, as the exchange struggled under weakening market confidence and faltering interest from foreign investors.
The Hong Kong Exchange was an attractive place for foreign investors looking to get exposure to mainland Chinese stocks.
But the exchange has lost its luster among foreign investors and young companies seeking to list their companies, as Chinese regulators have stepped up arbitrary spying charges and clamped down on tech companies under the guise of national security.
This week, Chinese regulators forced out a quant hedge fund manager after the regulators and China-controlled funds intervened in the market to stabilize faltering stocks, further denting investors' confidence in the financial systems of Hong Kong and mainland China.
About 68 Chinese companies raised $6 billion through an initial public offering in 2023, a 20-year low, amid weak interest from investors.
India Stocks Attempt to Rebound Amid Cautious Asian Markets
Stocks in Mumbai traded slightly higher amid cautious market sentiment.
The Sensex and the Nifty indexes edged up 0.2% as investors debated market drivers for the next leg up.
So far in 2024, foreign investors have poured money into Indian stocks in the hopes of a continued rebound in corporate earnings driven by sustained economic growth.
Moreover, domestic investors have supported the market advance despite high stock valuations.
In addition, global market sentiment has been cautious as several markets around the world trade at record highs.
Benchmark indexes in the U.S., Germany, France, Japan, and India are trading near record highs.
The Sensex index increased 0.2% to 72,500.30, and the Nifty index rose 0.3% to 21,982.80.
On the Mumbai stock exchange, 203 stocks traded at their 52-week highs and 49 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds increased to 7.06%, and the Indian rupee strengthened to ₹82.86 against the U.S. dollar.
Movers: Best Buy, Birkenstock, C3.ai, Duolingo, Salesforce, Snowflake
Scott Peters
29 Feb, 2024
New York City
Duolingo soared 20.1% to $235.56 after the language learning platform estimated strong revenue guidance in the fiscal first quarter and full-year after posting better-than-expected fourth-quarter results.
Total revenue in the fourth quarter increased 45% to $151 million from $103 million, net income swung to $12.1 million from a loss of $13.9 million, and diluted earnings per share were 29 cents compared to a loss of 35 cents a year ago.
Cash flow from operating activities was $49.2 million compared to $11.6 million in the prior year quarter, and free cash flow was $47.7 million compared to $11.3 million in the prior year quarter.
Total bookings increased 51% from a year ago to $191 million, and paid subscribers surged 57% to 6.6 million at the end of the quarter.
Snowflake plunged 22.9% to $177.20 after the company reported better-than-expected quarterly results and also announced the retirement of its chief executive, Frank Slootman.
The stock was also under pressure after the company estimated a weaker-than-expected product revenue outlook in the first quarter.
Okta soared 24.5% to $108.50 after the identity software management company reported better-than-expected quarterly results and estimated higher-than-expected quarterly results.
Fourth quarter revenue increased 19% to $605 million, net loss shrank to $44 million from $153 million, and diluted loss per share decreased to 26 cents from 95 cents a year ago.
Net cash provided by operations in the quarter increased to $174 million, or 29% of total revenue, compared to net cash provided by operations of $76 million, or 15% of total revenue, in the quarter a year ago.
Free cash flow was $166 million, or 28% of total revenue, compared to $72 million, or 14% of total revenue, in the fourth quarter of fiscal 2023.
C3.ai surged 19% to $35.07 after the artificial intelligence company reported better-than-expected quarterly results.
Salesforce inched up 0.5% to $301.36 after the customer relationship management software reported better-than-expected quarterly results but guided revenue growth of less than 9% in the current fiscal year.
Revenue in the fourth quarter increased 11% to $9.29 billion, net income swung to a profit of $1.44 billion from a loss of $98 million, and diluted earnings per share were $1.47 compared to a loss of 10 cents a year ago.
The company guided fiscal year 2025 first quarter revenue between $9.12 billion and $9.17 billion, and GAAP diluted earnings per share between $1.42 and $1.44.
For the full-year fiscal year 2025, the company estimated revenue between $37.7 billion and $38.0 billion, and GAAP diluted earnings per share between $6.07 and $6.15.
Best Buy increased 4.8% to $83.46 after the electronics retailer reported a smaller-than-expected decline in sales.
Revenue in the fiscal fourth quarter ending on February 3rd declined to $14.65 billion from $14.73 billion, net income fell to $460 million from $495 million, and diluted earnings per share dropped to $2.12 from $2.23 a year ago.
In the quarter, the company returned a total of $268 million to shareholders through dividends of $198 million and share repurchases of $70 million.
For the full year, the company returned a total of $1.1 billion to shareholders through dividends of $801 million and share repurchases of $340 million.
The company announced its board of directors approved a 2% increase in the regular quarterly dividend to $0.94 per share payable on April 11 to shareholders of record on March 21.
The retailer guided fiscal 2025 earnings per share in the range of $5.75 to $6.20 and anticipated revenue between $41.3 billion and $42.6 billion.
For the fiscal first quarter, Best Buy expects comparable sales to decline by approximately 5%, with a non-GAAP operating income rate of around 3.4%, matching the rate in the first quarter of fiscal year 2024.
Birkenstock edged up 0.3% to $52.12 after the newly listed German sandals company reported higher revenue and narrowed its loss in the holiday quarter.
Revenue in the fourth quarter increased 22% to Є302.9 million from Є248.5 million, net loss shrank to Є7.15 million from Є9.19 million, and diluted loss per share fell to 4euro cents from 5 euro cents a year ago.