Market Update
Europe Movers: Galliford Try, Flutter Entertainment, JD Sports Fashion, Renault, STMicroelectronics, Telecom Italia
Inga Muller
31 May, 2024
Frankfurt
European market indexes were under pressure after inflation accelerated for the first time in five months, raising the prospect of fewer rate cuts in 2024.
The DAX index decreased by 0.3% to 18,449.26; the CAC-40 index fell by 0.2% to 7,962.53; and the FTSE 100 index advanced by 0.3% to 8,256.14.
For the week, the DAX index declined 1.3% and advanced 3.2% in May. and the CAC 40 index fell 1.6% and 0.1%, respectively.
The FTSE 100 index declined 0.6% in the week and rose 1.6% in May.
The yield on 10-year German bonds edged up to 2.69%; French bonds inched higher to 3.19%; the UK gilts edged lower to 4.39%; and Italian bonds inched higher to 3.99%.
STMicroelectronics decreased 0.6% to €37.59 after the advanced semiconductor foundry announced its plan to build a new manufacturing facility in Catania, Italy.
Telecom Italia declined 2.2% to €0.24 after the U.S.-based private equity group KKR received unconditional European Union approval to acquire the company's fixed-line network.
Flutter Entertainment dropped 4.2% to 14,330.0 pence after the online gambling firm appointed a new group chief financial officer.
Renault SA declined 1.3% to €53.26, and the French automaker announced a joint venture with China-based Geely for the manufacturing of hybrid combustion engines.
JD Sports Fashion dropped 7.6% to 123.53 pence after the company reported lower-than-expected full-year profits.
Galliford Try Holdings gained 2.6% to 265.0 pence after the UK-based construction firm won two government contracts worth £101 million.
Euro Area Bond Yields Advanced After Inflation Rebounded In May
Bridgette Randall
31 May, 2024
Frankfurt
The Euro Area bond yields advanced following the rebound in inflation in the currency union for the first time in five months.
German, French, and Italian bond yields rose to five-month highs after the release of the inflation report.
The rebound in inflation raised doubts about future rate cuts after a possible rate cut in June, as policymakers may take a wait-and-see approach.
Investors are still anticipating the European Central Bank to cut rates next week after the policy meeting, but additional rate cuts may or may not materialize till the end of the year.
Eurozone Inflation Rebounded in May
The annual consumer price inflation in the eurozone rebounded to 2.6% in May from 2.4% in the previous two consecutive months, Eurostat reported Friday.
The rebound in energy prices and the faster price increase in services contributed to the rebound in inflation.
Energy prices rose 0.3% after declining 0.6% in the previous month; services prices accelerated to 4.1% from 3.7%; but food, tobacco, and alcohol prices rose at a slower pace of 2.6% compared to 2.8%.
The core rate of inflation, which excludes food, energy, tobacco, and alcohol, accelerated to 2.9% from 2.7%.
Among the four large economies in the eurozone, inflation accelerated in Spain to 3.6%, in Germany to 2.8%, in France to 2.7%, and in Italy to 0.8%.
UK House Prices Extend Gains for the Fourth Month in May
UK home prices rebounded 0.4% in May from the previous month after falling 0.4% in April, the Nationwide Building Society reported Friday.
House prices accelerated to an annual increase of 1.3% in May from 0.6% in April, indicating resilient demand despite affordability pressures.
House prices rose for the fourth month in a row, supported by wage gains and a weakening of inflation.
Europe Indexes and Yields
The DAX index decreased by 0.3% to 18,449.26; the CAC-40 index fell by 0.2% to 7,962.53; and the FTSE 100 index advanced by 0.3% to 8,256.14.
For the week, the DAX index declined 1.3% and advanced 3.2% in May. and the CAC 40 index fell 1.6% and 0.1%, respectively.
The FTSE 100 index declined 0.6% in the week and rose 1.6% in May.
The yield on 10-year German bonds edged up to 2.69%; French bonds inched higher to 3.19%; the UK gilts edged lower to 4.39%; and Italian bonds inched higher to 3.99%.
The euro edged higher to $1.084; the British pound inched higher to $1.274; and the U.S. dollar gained to 90.60 Swiss cents.
Brent crude decreased $0.14 to $82.02 a barrel, and the Dutch TTF natural gas rose by €0.77 to €35.60 per MWh.
Europe Stock Movers
STMicroelectronics decreased 0.6% to €37.59 after the advanced semiconductor foundry announced its plan to build a new manufacturing facility in Catania, Italy.
Telecom Italia declined 2.2% to €0.24 after the U.S.-based private equity group KKR received unconditional European Union approval to acquire the company's fixed-line network.
Flutter Entertainment dropped 4.2% to 14,330.0 pence after the online gambling firm appointed a new group chief financial officer.
Renault SA declined 1.3% to €53.26, and the French automaker announced a joint venture with China-based Geely for the manufacturing of hybrid combustion engines.
JD Sports Fashion dropped 7.6% to 123.53 pence after the company reported lower-than-expected full-year profits.
Galliford Try Holdings gained 2.6% to 265.0 pence after the UK-based construction firm won two government contracts worth £101 million.
Japan's Annual Industrial Output Declined 6th Consecutive Month, Nikkei 225 Extended Monthly Gains
Akira Ito
31 May, 2024
Tokyo
In a broad rally, market indexes in Tokyo rebounded more than 1% after the global bond selloff paused following the downward U.S. economic growth revision.
The Nikkei 225 and the Topix indexes jumped more than 1% in the hopes that policymakers may lower rates at least once in the second half after U.S. economic growth in the first quarter was lowered to 1.3% from the initial estimate of 1.6%.
The Japanese yen weakened and traded at 157.11 against the U.S. dollar, and the yield on a 10-year Japanese government bond stayed above 1.07%, a 12-year high.
Closer to home, the Tokyo area consumer price index increased by 2.2% in May from 1.8% in April, the Statistics Bureau of Japan reported Friday.
Core inflation, which excludes food and energy prices, rose to 1.9% from a two-year low of 1.6%.
Despite the rise in inflation, overall and core inflation rose to a slower than 2% target set by the Bank of Japan, and the price movement in the Tokyo area is generally seen as a leading indicator of nationwide price trends.
In addition, investors reviewed the latest economic updates on industrial output, retail sales, and the jobless rate.
Japan's Industrial Output Declined In April
Japan's industrial output declined by 1.0% at an at an annual pace in April, the Ministry of Economy, Trade, and Industry reported Friday.
The annual industrial output declined for the sixth month in a row but eased at the softest pace.
On a monthly basis, output decreased 0.1% in April, reversing the 4.4% increase in the previous month, and declined for the fourth time in the last six months.
Japan's jobless Rate Held Steady In April
Japan's jobless rate held at 2.6% for the third month in a row in April, the ministry said in a separate report released Friday.
The number of unemployed held steady at 1.83 million, while the number of employed decreased from 90,000 to 67.51 million.
The non-seasonally adjusted labor force participation rate increased to a five-month high of 63.1% in April from 62.9% in the month a year ago.
At the same time, the jobs-to-applications ratio eased to 1.26 from 1.28 in the previous month.
Japan's Retail Sales Expanded In April
Retail sales rose 2.4% in April from a year ago and rebounded from the downwardly revised 1.1% rise in March, which was the slowest pace of increase in two years, the Ministry of Economy, Trade, and Industry reported in a separate report.
On a monthly basis, sales rose 1.2% in April after falling by the same amount in March.
Machinery and equipment sales gained the most with an increase of 9.2%, followed by non-store retail trade by 6.3%, pharmaceuticals and cosmetics by 6.0%, and fuel by 4.8%.
Automobile sales declined 7.9%, and textile, apparel, and personal goods sales fell 1%.
Japan Stock Movers
The Nikkei 225 stock average increased 1.1% to 38,487.90, and the Topix index advanced 1.7% to 2,772.49.
Tokyo Electron, Advantest, Screen Holdings, Lasertec, and Socionext advanced between 1% and 3%.
Mitsubishi UFJ, Mizuho Financial, and Sumitomo Mitsui gained between 1% and 2%.
Toyota Motor jumped 2.2% to ¥3,401.0 after the vehicle maker said the weakness in Japan and China dragged April production down by 0.5% from a year ago.
Daiwa Securities, Yamato Holdings, and Sumitomo Pharma advanced more than 4%.
China Manufacturing Growth Unexpectedly Shrinks, Hang Seng Index Extends Fourth Monthly Gain In May
Li Chen
31 May, 2024
Hong Kong
Stocks in Shanghai and Hong Kong advanced and halted a three-day slide on speculation that more supportive policy measures may be in the making.
Benchmark indexes in Hong Kong jumped nearly 1% and in Shanghai advanced 0.2% after an official report suggested that the economic recovery is uneven and fragile and the manufacturing sector is struggling.
The Purchasing Managers' Index for the manufacturing sector contracted in May after remaining in expansion in the previous two consecutive months, the National Bureau of Statistics reported Friday.
The manufacturing PMI sipped to 49.5 in May from 50.4 in April; any reading below the 50-mark indicates a growth decline, and any reading above shows an increase in growth.
The manufacturing sector's activities contracted because of a decline in new orders and weakening foreign demand.
The non-manufacturing PMI slowed to 51.1 in May, and the index representing activities in the service and construction sectors expanded for the 17th month in a row, but at the slowest pace.
The weakness in the manufacturing sector raised hopes that more policy measures may be needed to revive broader economic growth.
Beijing's slow and piecemeal approach to reviving economic growth is likely to weigh on market sentiment in the coming weeks, as government bond sales are still behind the official schedule.
China Stock Movers
Market rally was broad, and stocks in energy, mining, manufacturing, and advanced technology advanced.
The CSI 300 index increased 0.2% to 3,601.55, and the Hang Seng index advanced 0.9% to 18,402.19.
The Hang Seng indexes is set to close higher by more than 3% in May, and advance for the fourth month in a row.
China Shenhua Energy gained 2.7% to HK$38.50, China Petroleum and Chemical rose 0.8% to HK$5.06, and CNOOC advanced 2.9% to HK$21.05.
Electric vehicle makers advanced in the hopes that authorities were likely to announce additional measures to support domestic sales.
Li Auto increased 3.1% to HK$80.30, BYD added 2.2% to HK$223.80, Xpeng jumped 4.4% to HK$33.20, and NIO jumped 9.9% to HK$42.0.
Auto Streets Development soared more than 50% on the first day of trading, and the company listed its stock in Hong Kong for HK15.60.
India Movers: Apollo Hospitals, BGR Energy, Bharat Dynamics, Bharat Rasayan, Sunteck Realty, Welspun Corp.
Arun Goswami
31 May, 2024
Mumbai
Stocks in Mumbai traded higher, and benchmark indexes are set to close down for the week and the month of May amid persistent inflation and elevated valuations.
The Sensex index increased by 0.8% to 74,459.98, and the Nifty index rose by 0.7% to 22,640.80.
On the Mumbai stock exchange, 62 stocks traded at their 52-week highs, and 30 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds inched higher to 7.0%, and the Indian rupee edged lower at ₹83.23 against the U.S. dollar.
Welspun Corp. dropped 5.9% to ₹565.75 despite the large-diameter pipe manufacturing company reporting a rise in sales and earnings in the March quarter.
Revenue increased 9.6% to ₹4,416 crore and net income rose 19.7% to ₹287.3 crore from a year ago, respectively.
Sunteck Realty advanced 0.2% to ₹475.95 after the residential property developer reported a surge in its quarterly revenue.
Revenue in the March quarter jumped ninefold to ₹426.9 crore from ₹48.9 crore, and net income swung to a profit of ₹101.3 crore from a loss of ₹27.9 crore.
Bharat Rasayan soared 14.9% to ₹10,580.0 after the bulk agrochemical maker reported a surge in profit in the March quarter.
Revenue increased 1.2% to ₹309.6 crore and net income soared 122% to ₹67.1 crore from a year ago, respectively.
BGR Energy Systems declined 1.8% to ₹38.80 after the power utility plant builder swung to profit in the March quarter.
Revenue in the quarter advanced 59.4% to ₹170 crore from ₹106.7 crore, and net income swung to a profit of ₹129.4 crore from a loss of ₹217.6 crore a year ago, respectively.
Apollo Hospitals Enterprise advanced 1.4% to ₹5,842.0 after the hospital chain operator reported a rise in revenue and earnings in the March quarter.
Revenue rose 14.9% to ₹4,944 crore from ₹4,302.2 crore, and net income jumped 77.5% to ₹258.4 crore from ₹145.6 crore a year ago, respectively.
Bharat Dynamics edged up a fraction to ₹1,547.60 after the arm maker reported strong quarterly results.
Revenue in the March quarter rose 7% to 854.1 crore from 798.3 crore, and net income soared 89% to 288.8 crore from 152.8 crore a year ago, respectively.
Heightened Market Volatility Across Atlantic Ahead of PCE Index and Eurozone Inflation Updates
Alexander Garcia
30 May, 2024
Miami
Benchmark indexes turned lower amid heightened volatility in the bond market and a weak outlook from Salesforce and Kohl's.
The S&P 500 index and the Nasdaq Composite turned lower as investors debated the future direction of monetary policy and an appropriate level of interest rate after the yield on 10-year Treasury notes continued to trend higher in volatile trading for the third day in a row.
The yield on 10-year U.S. Treasury notes stayed above 4.5% after rising to 4.6% in the previous session, sparking a broad selloff in stocks that covered all major industry sectors.
The rise in bond market yield poses a significant challenge as safer investments offer competitive returns of close to 5%, dampening demand for risky stocks.
Retailers were in focus after positive earnings from Abercrombie & Fitch, Best Buy, Foot Locker, and Dollar General raised the prospect of earnings improvement in the second half.
Kohl's said net income unexpectedly swung to a loss, and the department store chain operator sharply lowered its annual earnings outlook.
Salesforce reported better-than-expected quarterly earnings but offered a cautious outlook for the current quarter, forcing a selloff in tech stocks.
The first quarter U.S. economic growth estimate was revised lower to an annual pace of 1.3% from the previous estimate of 1.6%, according to a report released by the U.S. Commerce Department.
The downward revision was due to the reduction in the consumption growth estimate to 2.0% from the preliminary estimate of 2.5%.
The initial jobless claims increased by 3,000 to 219,000 in the week ending May 25, according to the weekly report from the U.S. Department of Labor.
Continuing claims, which run one week behind, edged slightly higher to 1.799 million.
Investors are looking forward to the release of personal consumption expenditure index data, along with the personal income and outlay report, on Friday.
U.S. Indexes and Treasury Yields
The S&P 500 index fell 05% to 5,241.59, and the Nasdaq Composite dropped 0.5% to 16,832.57.
The yield on 2-year Treasury notes edged lower to 4.95%, 10-year Treasury notes increased to 4.57%, and 30-year Treasury bonds edged higher to 4.71%.
WTI crude oil decreased $1.02 to $78.16 a barrel, and natural gas prices eased 6 cents to $2.59 a thermal unit.
Gold increased by $5.72 to $2,344.14 an ounce, and silver rose 87 cents to $31.36.
The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 104.77.
U.S. Stock Movers
Salesforce declined 17% to $224.60 after the customer management software developer reported slightly lower-than-expected revenue of $9.13 billion.
The stock was also under pressure after the company's current sales guidance fell short of market expectations.
Foot Locker surged 14.5% to $25.75 after the apparel and sneaker retailer reported better-than-expected adjusted first quarter earnings of 22 cents per share.
The company's improved earnings suggest that the latest plan to reorganize is showing early signs of progress.
Walt Disney increased 0.6% to $101.25 after activist investor Nelson Peltz sold his entire stake in the media company for a profit of $1 billion and abandoned his plan to change management.
Peltz sold his $30 million stake at an average price of $120 per share after he lost the proxy battle to change company management.
Kohl's Corp. declined 26.2% to $20.15 after the department store chain reported weaker-than-expected quarterly results and outlook.
The retailer reported revenue of $3.18 billion, and net income swung to an unexpected loss of 4 cents per share.
Best Buy soared 11.5% to $79.94 after the electronics retailer's earnings surpassed market expectations.
American Eagle Outfitters plunged 9% to $21.85 after the apparel retailer reported weaker-than-expected sales in the first quarter.
European Markets Halted a Two-day Slide In Bond and Stock Markets
European stock markets halted a two-day slide and paused a bond market selloff, and investors reviewed the latest updates on unemployment and inflation.
Benchmark indexes in London, Paris, and Frankfurt rebounded slightly, and bond market selloffs paused as investors looked ahead to the release of inflation updates in the eurozone and in the U.S. on Friday.
Spain's annual consumer inflation accelerated for the third month in a row in May to 3.6% from 3.3% in April, the National Statistics Institute, or INE, reported Thursday.
Eurozone Jobless Rate Eased in April
The unemployment rate in the eurozone eased to a record low of 6.4% in April from 6.5% in March 2024 and April 2023, the statistical agency Eurostat reported Thursday.
The number of unemployed in the European Union eased to 13.15 million, including 11 million in the eurozone.
The jobless count decreased by 103,000 in the European Union, including 100,000 in the Eurozone.
The jobless rate among young workers remained high as businesses limited expenses.
The unemployment rate in Germany held steady at 3.2%, in France it decreased to 7.3% from 7.4%, in Spain it was unchanged at 11.7%, and in Italy it decreased to 6.9% from 7.1% in the previous month, respectively.
In April, 2.8 million young people under the age of 25 were unemployed in the European Union, including 2.3 million in the eurozone.
The youth unemployment rate edged lower to 14.4% in the European Union, down from 14.7% in March, and 14.1% in the eurozone, down from 14.3% in the previous month.
Europe Indexes and Yields
The DAX index increased by 0.2% to 18,504.17; the CAC-40 index rose by 0.5% to 7,975.17; and the FTSE 100 index advanced by 0.6% to 8,235.14.
The yield on 10-year German bonds edged down to 2.57%; French bonds inched higher to 3.15%; the UK gilts edged lower to 4.40%; and Italian bonds inched higher to 3.98%.
The euro edged higher to $1.081; the British pound inched higher to $1.272; and the U.S. dollar gained to 90.63 Swiss cents.
Brent crude decreased $1.10 to $82.49 a barrel, and the Dutch TTF natural gas rose by €1.29 to €35.13 per MWh.
Europe Stock Movers
Telecom Italia SpA declined 5.7% to €0.23 despite the telecommunications company reporting an increase in revenue in the first quarter and reiterating its full-year outlook.
Banco BPM SpA soared 2.8% to €6.61 after the company's chief executive officer, Giuseppe Castagna, said that there are no conditions for the merger with the rival Monte dei Paschi.
Bayer AG increased 2.8% to €27.70 after the German pharmaceutical and life science company said its clinical-stage cell therapy to treat Parkinson's disease has received the U.S. FDA's Regenerative Medicine Advanced Therapy designation.
BHP Group declined 0.9% to 2,333.0 pence after the company withdrew its £39 billion takeover offer for Anglo American.
Anglo American edged up 0.1% to 2,481.0 pence.
Auto Trader increased 12.1% to 819.20 pence after the UK-based online marketplace reported better-than-expected full-year results.
The company announced a dividend of 6.40 pence to shareholders on record on August 29 and payable on September 27.
Vinci SA advanced 0.8% to €114.05 after the French construction company announced the receipt of a $159 million project from the Melbourne Airport in Australia.
BoJ Policy Uncertainty Extends Nikkei Index 2-month Losses to 8%
The yen's weakening, the prospect of higher U.S. interest rates, and a lack of progress in Japanese corporate governance dragged lower market indexes in Japan.
The Nikkei 225 and the Topix indexes dropped to one-month lows and extended losses to close to 8% from the peak in March.
Surging global bond yields lifted the yield on a 10-year Japanese government bond to above 1.1%, a 13-year high.
The yen declined and traded at 156.82 against the U.S. dollar and approached the record low against the euro on the worry that the wide rate differential with U.S. and Euro Area bonds is likely to persist well into 2026.
The hawkish comments from U.S. Federal policymakers and tepid demand for the U.S. Treasury auctions this week also dampened market sentiment.
Closer to home, investors are looking ahead to the release of the Tokyo area's inflation data on Friday, which also provides insights into nationwide price trends.
Japan Stock Movers
The Nikkei 225 stock average dropped 1.7% to 37,899.21, and the Topix index decreased 0.8% to 2,719.10.
Tech stocks led the declines amid worries that higher interest rates would dampen future earnings streams.
Tokyo Electron, Advantest, Lasertec, and Screen Holdings declined between 3% and 6%.
Terumo Corp., the maker of medical devices and supplies, declined 2.8% to ¥2,620.0; Nissan Chemical dropped 4.9% to ¥4,309.0; and Fanuc Corp., the manufacturer of advanced automation products, declined 1.6% to ¥4,442.0.
The four largest trading companies in Japan, Itochu, Marubeni, Sumitomo, and Mitsui, declined between 1.5% and 2.5% amid general market weakness.
China Stocks Extend Selloff Amid Earnings Growth and Property Market Worries
Stocks in Shanghai and Hong Kong remained under pressure for the third consecutive day due to lingering property market woes and a lack of effective policy responses.
Market jitters were compounded after hawkish comments from U.S. policymakers raised the prospect of interest rates staying higher for longer and a possible rate cut that may not materialize in 2024.
The yield on 10-year U.S. Treasury bonds rose above 4.5%, a troublesome level for the stock market, as rising bond yields attract more fund flows away from the riskier stock markets.
The rise in U.S. bond yields dragged down market indexes in Tokyo and Seoul by 1% and in Mumbai and Sydney by 0.5%.
Benchmark indexes in Hong Kong trimmed the five-week market gains to less than 12% from 20% after policymakers' drive to lift the embattled property market showed little progress.
Shanghai and Guangzhou were the latest tier-one cities to relax curbs on buying properties and support loosened mortgage standards, but the lack of confidence in property developers kept buyers away.
Moreover, job market uncertainty and elevated home prices have also dampened interest from first-time home buyers.
On the economic front, investors are looking forward to the release of China's survey of the manufacturing industry, and most economists are anticipating the sector to expand for the third month in a row.
The manufacturing sector's health is closely watched by policymakers because the sector is one of the largest contributors to economic growth and critical for creating new jobs.
China Stock Movers
Market indexes in Shanghai and Hong Kong extended weekly losses to over 2.5% amid persistent worries about earnings growth and property market woes.
The CSI 300 index decreased 0.5% to 3,594.81, and the Hang Seng index dropped 1.5% to 18,208.58.
Longfor Group declined 3.9% to HK$12.68, China Resources Land dropped 3% to HK$29.15, and China Vanke fell 5.4% to HK$5.47.
Electric vehicle markers generally traded down on the worry that additional U.S. sanctions imposed on Russia may negatively impact the export of automobiles.
BYD rose 1.4% to HK$220.60, Li Auto dropped 2.7% to HK$77.75, and Xpeng declined 1.7% to HK$31.85.
Banks traded down amid market volatility and speculation that the People's Bank of China may be forced to lower its 5-year loan prime rate amid property market woes and economic growth weakness.
Bank of China dropped 2.2% to HK$3.70, ICBC declined 1.7% to HK$4.47, and China Construction Bank fell 2.1% to HK$5.57.
Zijin Mining Group declined 5.7% to HK$17.02 after volatile gold and silver prices declined on the speculation that U.S. interest rates are likely to stay higher, supporting a higher dollar in international currency trading.
U.S. Movers: American Eagle Outfitters, Best Buy, Disney, Foot Locker, HP, Kohl's, Salesforce
Scott Peters
30 May, 2024
New York City
Salesforce declined 17% to $224.60 after the customer management software developer reported slightly lower-than-expected revenue of $9.13 billion.
The stock was also under pressure after the company's current sales guidance fell short of market expectations.
Foot Locker surged 14.5% to $25.75 after the apparel and sneaker retailer reported better-than-expected adjusted first quarter earnings of 22 cents per share.
Total sales in the first quarter declined 2.8% to $1.87 billion from $1.92 billion, net income decreased to $8 million from $36 million, and diluted earnings per share fell to 9 cents from 38 cents a year ago.
Comparable sales decreased by 1.8%, including a 220 basis-point impact from the continued repositioning of the Champs Sports. Global Foot Locker and Kids Foot Locker comparable sales increased 1.1%.
For the full-year 2024, the company estimated net sales to range between -1% and +1%, and comparable sales to increase between 1% and 3%.
Walt Disney increased 0.6% to $101.25 after activist investor Nelson Peltz sold his entire stake in the media company for a profit of $1 billion and abandoned his plan to change management.
Peltz sold his $30 million stake at an average price of $120 per share after he lost the proxy battle to change company management.
Kohl's Corp. declined 26.2% to $20.15 after the department store chain reported weaker-than-expected quarterly results and outlook.
The retailer reported revenue of $3.18 billion, and net income swung to an unexpected loss of 4 cents per share.
The department store chain operator forecast annual sales to fall between 2% and 4%, and earnings per share to range between $1.25 and $1.85, compared to previous estimate between $2.10 and $2.70.
Best Buy soared 11.5% to $79.94 after the electronics retailer's earnings surpassed market expectations.
Revenue in the fiscal first quarter ending on May 4 declined to $8.8 billion from $9.5 billion, net income increased to $246 million from $244 million, and diluted earnings per share advanced to $1.13 from $1.11 a year ago.
Domestic U.S. sales declined 6.8% to $8.2 billion, driven primarily by a 6.3% decrease in comparable sales.
The company guided fiscal second quarter comparable sales to decline 3% and in the full-year to range between flat and a 3% fall.
The electronics retailer also guided fiscal 2025 sales to range between $41.3 billion and $42.6 billion and non-GAP diluted earnings per share between $5.75 and $6.20.
American Eagle Outfitters plunged 9% to $21.85 after the apparel retailer reported weaker-than-expected sales in the fiscal first quarter ending on May 4.
Total revenue in the first quarter rose 6% to $1.14 billion from $1.08 billion, net income increased to $67.7 million from $18.5 million, and diluted earnings per share rose to 34 cents from 5 cents a year ago.
Store revenue increased by 4%, and digital revenue rose by 12%.
Revenue at Aerie-branded stores and sites rose 4% to $373 million, with comparable sales up 6%.
American Eagle branded stores and sites revenue increased 8% to $725 million, with comparable sales growing 7%.
In the quarter, the company returned $60 million to shareholders through the repurchase of 1.5 million shares for $35 million and a dividend payment of 12.5 cents per share, or $25 million.
For fiscal 2024, the retailer guided operating income in the range of $445 million and $465 million, reflecting a revenue increase between 2% and 4%.
The guidance fell short of market expectations, especially in light of blow out quarter reported by Abercrombie & Fitch.
HP Inc. advanced 11.4% to $36.63 after the fiscal second quarter results were ahead of market expectations.
Net revenue decreased 0.8% to $12.8 billion from $12.9 billion, net income declined 42% to $0.6 billion from $1.1 billion, and diluted earnings per share fell to 61 cents from $1.06 a year ago.
In the quarter, the company paid 27.56 per share in dividends and repurchased 3.5 million of its own shares.
The company estimated diluted earnings per share in the fiscal third quarter between 63 cents and 77 cents and for the fiscal year 2024 between $2.60 and $2.90.
U.S, GDP Growth Revised Lower, Retailers Report Mixed Quarterly Results
Barry Adams
30 May, 2024
New York City
Market sentiment was cautious ahead of the release of the inflation update on Friday.
The S&P 500 index and the Nasdaq Composite turned lower as investors debated the future direction of monetary policy and an appropriate level of interest rate.
The yield on 10-year U.S. Treasury notes recovered to 4.5% after rising to 4.6% in the previous session, sparking a broad selloff in stocks that covered all major industry sectors.
The rise in bond market yield poses a significant challenge as safer investment offer competitive returns of close to 5%, dampening demand for stocks.
Retailers were in focus after positive earnings from Abercrombie & Fitch, Best Buy, Foot Locker, and Dollar General raised the prospect of earnings improvement in the second half.
The first quarter economic growth estimate was revised lower to an annual pace of 1.3% from the previous estimate of 1.6%, according to a report released by the U.S. Commerce Department.
The downward revision was due to the reduction in consumption growth to 2.0% from the preliminary estimate of 2.5%.
The initial jobless claims increased by 3,000 to 219,000 in the week ending May 25, according to the weekly report from the U.S. Department of Labor. Continuing claims, which run one week behind, edged slightly higher to 1.799 million.
Investors are looking forward to the release of personal consumption expenditure index data, along with the personal income and outlay report, on Friday.
U.S. Indexes and Treasury Yields
The S&P 500 index fell 0.3% to 5,252.44, and the Nasdaq Composite dropped 0.2% to 16,886.25.
The yield on 2-year Treasury notes edged lower to 4.95%, 10-year Treasury notes increased to 4.57%, and 30-year Treasury bonds edged higher to 4.71%.
WTI crude oil decreased $0.62 to $78.66 a barrel, and natural gas prices eased 3 cents to $2.63 a thermal unit.
Gold decreased by $4.68 to $2,343.74 an ounce, and silver fell 58 cents to $31.46.
The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 104.77.
U.S. Stock Movers
Salesforce declined 17% to $224.60 after the customer management software developer reported slightly lower-than-expected revenue of $9.13 billion.
The stock was also under pressure after the company's current sales guidance fell short of market expectations.
Foot Locker surged 14.5% to $25.75 after the apparel and sneaker retailer reported better-than-expected adjusted first quarter earnings of 22 cents per share.
The company's improved earnings suggest that the latest plan to reorganize is showing early signs of progress.
Walt Disney increased 0.6% to $101.25 after activist investor Nelson Peltz sold his entire stake in the media company for a profit of $1 billion and abandoned his plan to change management.
Peltz sold his $30 million stake at an average price of $120 per share after he lost the proxy battle to change company management.
Kohl's Corp. declined 26.2% to $20.15 after the department store chain reported weaker-than-expected quarterly results and outlook.
The retailer reported revenue of $3.18 billion, and net income swung to an unexpected loss of 4 cents per share.
Best Buy soared 11.5% to $79.94 after the electronics retailer's earnings surpassed market expectations.
American Eagle Outfitters plunged 9% to $21.85 after the apparel retailer reported weaker-than-expected sales in the first quarter.
Europe Movers: Auto Trader, Banco BPM, Bayer, BHP, Vinci
Inga Muller
30 May, 2024
Frankfurt
European markets rebounded and bond market selloffs paused after two days of volatile trading, and investors looked ahead to the release of inflation updates in the eurozone and the U.S.
The DAX index increased by 0.01% to 18,475.13; the CAC-40 index rose by 0.3% to 7,954.08; and the FTSE 100 index advanced by 0.2% to 8,01.34.
The yield on 10-year German bonds edged down to 2.57%; French bonds inched higher to 3.15%; the UK gilts edged lower to 4.40%; and Italian bonds inched higher to 3.98%.
Telecom Italia SpA declined 5.7% to €0.23 despite the telecommunications company reporting an increase in revenue in the first quarter and reiterating its full-year outlook.
Banco BPM SpA soared 2.8% to €6.61 after the company's chief executive officer, Giuseppe Castagna, said that there are no conditions for the merger with the rival Monte dei Paschi.
Bayer AG increased 2.8% to €27.70 after the German pharmaceutical and life science company said its clinical-stage cell therapy to treat Parkinson's disease has received the U.S. FDA's Regenerative Medicine Advanced Therapy designation.
BHP Group declined 0.9% to 2,333.0 pence after the company withdrew its £39 billion takeover offer for Anglo American.
Anglo American edged up 0.1% to 2,481.0 pence.
Auto Trader increased 12.1% to 819.20 pence after the UK-based online marketplace reported better-than-expected full-year results.
The company announced a dividend of 6.40 pence to shareholders on record on August 29 and payable on September 27.
Vinci SA advanced 0.8% to €114.05 after the French construction company announced the receipt of a $159 million project from the Melbourne Airport in Australia.
European Union Jobless Rate Dropped to Record Low, Spain's Inflation Accelerated In May
Bridgette Randall
30 May, 2024
Frankfurt
European stock markets halted a two-day slide and paused a bond market selloff, and investors reviewed the latest updates on unemployment and inflation.
Benchmark indexes in London, Paris, and Frankfurt rebounded slightly, and bond market selloffs paused as investors looked ahead to the release of inflation updates in the eurozone and in the U.S. on Friday.
Spain's annual consumer inflation accelerated for the third month in a row in May to 3.6% from 3.3% in April, the National Statistics Institute, or INE, reported Thursday.
Eurozone Jobless Rate Eased in April
The unemployment rate in the eurozone eased to a record low of 6.4% in April from 6.5% in March 2024 and April 2023, the statistical agency Eurostat reported Thursday.
The number of unemployed in the European Union eased to 13.15 million, including 11 million in the eurozone.
The jobless count decreased by 103,000 in the European Union, including 100,000 in the Eurozone.
The jobless rate among young workers remained high as businesses limited expenses.
The unemployment rate in Germany held steady at 3.2%, in France it decreased to 7.3% from 7.4%, in Spain it was unchanged at 11.7%, and in Italy it decreased to 6.9% from 7.1% in the previous month, respectively.
In April, 2.8 million young people under the age of 25 were unemployed in the European Union, including 2.3 million in the eurozone.
The youth unemployment rate edged lower to 14.4% in the European Union, down from 14.7% in March, and 14.1% in the eurozone, down from 14.3% in the previous month.
Europe Indexes and Yields
The DAX index increased by 0.01% to 18,475.13; the CAC-40 index rose by 0.3% to 7,954.08; and the FTSE 100 index advanced by 0.2% to 8,014.34.
The yield on 10-year German bonds edged down to 2.57%; French bonds inched higher to 3.15%; the UK gilts edged lower to 4.40%; and Italian bonds inched higher to 3.98%.
The euro edged higher to $1.081; the British pound inched higher to $1.272; and the U.S. dollar gained to 90.63 Swiss cents.
Brent crude decreased $0.43 to $83.12 a barrel, and the Dutch TTF natural gas rose by €0.32 to €34.16 per MWh.
Europe Stock Movers
Telecom Italia SpA declined 5.7% to €0.23 despite the telecommunications company reporting an increase in revenue in the first quarter and reiterating its full-year outlook.
Banco BPM SpA soared 2.8% to €6.61 after the company's chief executive officer, Giuseppe Castagna, said that there are no conditions for the merger with the rival Monte dei Paschi.
Bayer AG increased 2.8% to €27.70 after the German pharmaceutical and life science company said its clinical-stage cell therapy to treat Parkinson's disease has received the U.S. FDA's Regenerative Medicine Advanced Therapy designation.
BHP Group declined 0.9% to 2,333.0 pence after the company withdrew its £39 billion takeover offer for Anglo American.
Anglo American edged up 0.1% to 2,481.0 pence.
Auto Trader increased 12.1% to 819.20 pence after the UK-based online marketplace reported better-than-expected full-year results.
The company announced a dividend of 6.40 pence to shareholders on record on August 29 and payable on September 27.
Vinci SA advanced 0.8% to €114.05 after the French construction company announced the receipt of a $159 million project from the Melbourne Airport in Australia.
Nikkei 225 Extends Two-month Losses to 8%, BoJ Policy Uncertainty Keeps Indexes In Downward Trend
Akira Ito
30 May, 2024
Tokyo
The yen's weakening, the prospect of higher U.S. interest rates, and a lack of progress in Japanese corporate governance dragged lower market indexes in Japan.
The Nikkei 225 and the Topix indexes dropped to one-month lows and extended losses to close to 8% from the peak in March.
Surging global bond yields lifted the yield on a 10-year Japanese government bond to above 1.1%, a 13-year high.
The yen declined and traded at 156.82 against the U.S. dollar and approached the record low against the euro on the worry that the wide rate differential with U.S. and Euro Area bonds is likely to persist well into 2026.
The hawkish comments from U.S. Federal policymakers and tepid demand for the U.S. Treasury auctions this week also dampened market sentiment.
Closer to home, investors are looking ahead to the release of the Tokyo area's inflation data on Friday, which also provides insights into nationwide price trends.
Japan Stock Movers
The Nikkei 225 stock average dropped 1.7% to 37,899.21, and the Topix index decreased 0.8% to 2,719.10.
Tech stocks led the declines amid worries that higher interest rates would dampen future earnings streams.
Tokyo Electron, Advantest, Lasertec, and Screen Holdings declined between 3% and 6%.
Terumo Corp., the maker of medical devices and supplies, declined 2.8% to ¥2,620.0; Nissan Chemical dropped 4.9% to ¥4,309.0; and Fanuc Corp., the manufacturer of advanced automation products, declined 1.6% to ¥4,442.0.
The four largest trading companies in Japan, Itochu, Marubeni, Sumitomo, and Mitsui, declined between 1.5% and 2.5% amid general market weakness.
China Stocks Extend Weekly Selloff Amid Earnings Growth and Property Market Worries
Li Chen
30 May, 2024
Hong Kong
Stocks in Shanghai and Hong Kong remained under pressure for the third consecutive day due to lingering property market woes and a lack of effective policy responses.
Market jitters were compounded after hawkish comments from U.S. policymakers raised the prospect of interest rates staying higher for longer and a possible rate cut that may not materialize in 2024.
The yield on 10-year U.S. Treasury bonds rose above 4.5%, a troublesome level for the stock market, as rising bond yields attract more fund flows away from the riskier stock markets.
The rise in U.S. bond yields dragged down market indexes in Tokyo and Seoul by 1% and in Mumbai and Sydney by 0.5%.
Benchmark indexes in Hong Kong trimmed the five-week market gains to less than 12% from 20% after policymakers' drive to lift the embattled property market showed little progress.
Shanghai and Guangzhou were the latest tier-one cities to relax curbs on buying properties and support loosened mortgage standards, but the lack of confidence in property developers kept buyers away.
Moreover, job market uncertainty and elevated home prices have also dampened interest from first-time home buyers.
On the economic front, investors are looking forward to the release of China's survey of the manufacturing industry, and most economists are anticipating the sector to expand for the third month in a row.
The manufacturing sector's health is closely watched by policymakers because the sector is one of the largest contributors to economic growth and critical for creating new jobs.
China Stock Movers
Market indexes in Shanghai and Hong Kong extended weekly losses to over 2.5% amid persistent worries about earnings growth and property market woes.
The CSI 300 index decreased 0.5% to 3,594.81, and the Hang Seng index dropped 1.5% to 18,208.58.
Longfor Group declined 3.9% to HK$12.68, China Resources Land dropped 3% to HK$29.15, and China Vanke fell 5.4% to HK$5.47.
Electric vehicle markers generally traded down on the worry that additional U.S. sanctions imposed on Russia may negatively impact the export of automobiles.
BYD rose 1.4% to HK$220.60, Li Auto dropped 2.7% to HK$77.75, and Xpeng declined 1.7% to HK$31.85.
Banks traded down amid market volatility and speculation that the People's Bank of China may be forced to lower its 5-year loan prime rate amid property market woes and economic growth weakness.
Bank of China dropped 2.2% to HK$3.70, ICBC declined 1.7% to HK$4.47, and China Construction Bank fell 2.1% to HK$5.57.
Zijin Mining Group declined 5.7% to HK$17.02 after volatile gold and silver prices declined on the speculation that U.S. interest rates are likely to stay higher, supporting a higher dollar in international currency trading.
India Movers: Awfis Space, Capacite Solutions, GMR Airports, MTNL, R R Kabel, SJVN
Arun Goswami
30 May, 2024
Mumbai
Stocks and benchmark indexes in Mumbai headed lower amid weak market sentiment after hawkish comments from U.S. policymakers' sparked a selloff in global bonds.
The Sensex index decreased by 0.5% to 74,133.96, and the Nifty index fell by 0.5% to 22,592.30.
On the Mumbai stock exchange, 62 stocks traded at their 52-week highs, and 34 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds inched higher to 7.01%, and the Indian rupee edged lower at ₹83.40 against the U.S. dollar.
R R Kabel Ltd. rose 1.9% to ₹1,757.0 after the U.S.-based private equity group, TPG Asia, is likely to divest its entire 5% stake, or 56 lakh shares, for about ₹1,000 crore.
Awfis Space Solutions is set to list its stock for ₹383 per share on May 30 and raise ₹599 crore through the sale of 1.56 crore shares.
The flexible space company operates 169 coworking space centers in 16 cities in India with 105,258 seats and plans to add 31 centers with 25,312 seats.
Capacite Infraprojects rose 3.7% to ₹316.0, and the company's board plans to meet on June 3 to discuss its options to raise 100 crore through the sale of convertible bonds through private placement.
SJVN Ltd. decreased 3.7% to ₹134.70 after the power company reported a sharp jump in profit, but revenue declined in the March quarter.
Revenue decreased by 4.1% to ₹482.9 crore from ₹503.8 crore, and net income soared 255% to ₹61.1 crore from ₹17.2 crore a year ago, respectively.
GMR Airports declined 1.8% to ₹85.70, and the airport facilities operator reported a narrower loss in the March quarter.
Revenue rose 29.5% to ₹2,446.8 crore from ₹1,889.7 crore, and net loss narrowed to ₹167.6 crore from ₹638.9 crore a year ago.
MTNL decreased 1.6% to ₹37.40, and the telecom operator reported a wider loss in the March quarter.
Revenue fell 4.1% to ₹482.9 crore from ₹503.8 crore, and net loss widened to ₹783.7 crore from ₹748.6 crore a year ago, respectively.
Stocks On Wall Street Struggle Amid Lack of Catalysts, Global Markets Swing Lower
Alexander Garcia
29 May, 2024
Miami
Stocks and benchmark indexes slipped on Wednesday, and the yield on U.S. Treasury notes advanced for the second day in a row.
The S&P 500 index and the Nasdaq Composite edged down 0.5%, and megacap technology stocks struggled near recent levels.
Nvidia attempted to extend gains after rising more than 20% in three previous sessions following the company's earnings report last week, which exceeded the most optimistic outlook.
Investors are betting that the company at the center of the artificial intelligence technology wave is likely to continue to deliver earnings growth that is ahead of market expectations as the large data center operators ramp up the purchase of servers with advanced chips.
In addition, the company's release of new products in the third quarter are likely to kick sales in a higher gear.
Most investors are anticipating Nvidia to deliver at least $23 per share in earnings in the fiscal year ending in January 2025, and the AI chipmaker's earnings in the next fiscal year could range between $30 and $36 per share.
Abercrombie & Fitch also delivered stellar results in its latest quarter, driving the stock higher by 20%, after sales and earnings surpassed analysts' expectations.
The bond market sold off after the Treasury Department auction for 2-year and 5-year notes fell short of market expectations, driving the yield on 10-year Treasury notes above the critical level of 4.5%.
U.S. Indexes and Treasury Yields
The S&P 500 index fell 0.7% to 5,286.19, and the Nasdaq Composite dropped 0.9% to 16,731.52.
The yield on 2-year Treasury notes edged higher to 4.97%, 10-year Treasury notes increased to 4.57%, and 30-year Treasury bonds edged lower to 4.59%.
WTI crude oil increased $0.09 to $80.37 a barrel, and natural gas prices eased 6 cents to $2.77 a thermal unit.
Gold decreased by $16.75 to $2,343.14 an ounce, and silver fell 9 cents to $31.96.
The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 104.73.
U.S. Stock Movers
Chewy jumped 6.5% to 18.0 after the online pet food store reported better-than-expected quarterly results.
Marathon Oil jumped 8.3% to $28.64 after the company agreed to be acquired by ConocoPhillips for $17.1 billion and assume $5.4 billion in debt.
Marathon Oil shareholders will receive 0.2550 shares of ConocoPhillips common stock for each share of Marathon Oil common stock, representing a 14.7% premium to the closing share price of Marathon Oil on May 28, 2024, and a 16.0% premium to the prior 10-day volume-weighted average price.
The deal is expected to be immediately attractive to ConocoPhillips shareholders.
After the transaction, the third-largest U.S. oil company plans to increase its dividend by 34% to 78 cents per share starting in the fourth quarter of 2024.
Upon closing of the transaction, ConocoPhillips expects share buybacks to be over $20 billion in the first three years, with over $7 billion in the first full year, at recent commodity prices.
The oil industry has experienced a wave of transactions in recent months. Exxon Mobil agreed to acquire Pioneer Natural Resources for $60 billion, and Hess' shareholders approved the merger of the company with Chevron.
European Stocks Face Selling Pressure After Bond Yields Advance
The sharp selloff in the bond market weighed on stock market indexes, and the euro held its ground.
Bonds in the Euro Area sold off after the U.S. Treasury auction of 2-year and 5-year notes was weaker than anticipated.
The U.S. Treasury yields jumped following the unexpected weakness in the auction and sparked a selloff in worldwide bonds.
The yield on the 10-year German Bund increased to a 6-month high, the French bond yield advanced to a one-month high, and the UK 10-year government bond yield jumped to a three-week high.
Investors also pared back rate-cut expectations amid slow progress on disinflation and hawkish comments from policymakers in the U.S. and Europe.
Germany's consumer price inflation inched up to 2.4% from 2,2% in the previous two consecutive months, the Federal Statistical Office, Destatis, reported Wednesday.
Inflation rose for the first time in five months, after food and services prices accelerated in the month, offset by the decline in goods and energy prices.
Core inflation, which excludes food and energy prices, held steady at 2.0%
Spain's Retail Sales Growth Slowed In April
Spain's retail sales increase slowed for the third month in a row, according to the data released by the statistical agency INE.
Retail sales in April rose 0.3% from a year ago, after an upwardly revised 0.9% increase in the previous month.
Retail sales rose at the slowest pace since November 2022, after spending on food and non-food items rose at a significantly slower pace.
On a monthly basis, Spain's retail sales rose 0.8%, reversing a 0.4% fall in the previous month.
In the first four months to April 2024, retail sales rose from a year ago by 0.9%.
Europe Indexes and Yields
Benchmark indexes in London, Paris, and Frankfurt traded down, and crude oil prices advanced amid rising tensions in the Middle East but eased in the afternoon trading.
The DAX index decreased by 1.1% to 18,473.29; the CAC-40 index fell by 1.5% to 7,935.03; and the FTSE 100 index decreased by 0.9% to 8,183.07.
The yield on 10-year German bonds edged up to 2.62%; French bonds inched higher to 3.11%; the UK gilts edged lower to 4.35%; and Italian bonds inched higher to 3.93%.
The euro edged higher to $1.084; the British pound inched higher to $1.274; and the U.S. dollar gained to 91.34 Swiss cents.
The euro approached a record high against the Japanese yen on the speculation that the European Central Bank is likely to take a slower approach to lowering its interest rate compared to the U.S. Federal Reserve.
The yen fell to this month's low of 170.44 and approached a record low of 171.56 against the euro.
Brent crude decreased $1.10 to $83.52 a barrel, and the Dutch TTF natural gas fell by €0.32 to €33.84 per MWh.
Europe Stock Movers
International Distributions Services advanced 4% to 334.0 after the parent company of Royal Mail accepted a £3.57 billion takeover proposal from EP Group, controlled by Czech billionaire Daniel Kretinsky.
BHP Group gained 2.1% to 2,384.0 pence after the mining company dropped its £39 billion takeover offer for Anglo American.
Oil explorers and refiners extended gains for the second day in a row amid rising tensions in the Middle East, and traders hoped that the OPEC member nations would extend production cuts at the next meeting this Sunday.
BP plc gained 1.6% to 493.60 pence, Shell PLC jumped 1.7% to 2,827.0, and TotalEnergies SE gained 0.4% to €66.43.
The Rise In Global Bond Yields Weighs On Japanese Stocks and Yen
Weak yen and global interest rate worries weighed on market sentiment in Tokyo ahead of the release of the inflation update.
The Nikkei and the Topix fell as much as 1%, and the yield on Japanese government bonds inched higher than 1% to a 12-year high after hawkish comments from non-voting members of the Federal Reserve's policymaker.
Market sentiment in Tokyo was also on the defensive after the U.S. Treasury yields unexpectedly rose following the weaker-than-expected auction of 2-year and 5-year Treasury notes.
The widening yield gap between the U.S. and Japan dragged the Japanese yen lower, and the currency traded at 157.86 against the U.S. dollar in late afternoon trading in Tokyo.
Investors are also looking ahead to the release of the Tokyo area's inflation data for April, and the city's inflation is generally seen as a bellwether of the nationwide price trends.
Japan Stock Movers
The Nikkei 225 stock average dropped 0.8% to 38,556.87, and the Topix index declined 1% to 2,741.62.
Stocks in Tokyo traded down on the ongoing monetary policy uncertainty and the weakness in the yen.
Mitsubishi UFJ rose 0.6% to ¥1,637.0 and traded at an 18-year high on the expectations of the company benefiting from the weaker yen and rising bond yields.
Last week, Mitsubishi UFJ reported a record profit of 1.5 trillion yen in the financial year 2024 and announced a stock repurchase program of 50 billion yen.
The company also announced the CET1 ratio, a measure of risk capital, to range between 9.5% and 10.5%, and a dividend payout ratio of around 40%.
Utilities and heavy industry-linked stocks were among the leading decliners.
Tokyo Electric Power dropped 8.3% to ¥926.30, Mitsubishi Heavy Industries declined 3.6% to ¥1,308.0, and Teijin Ltd. fell 5.5% to ¥1,519.0.
Diversified exporters and financial services were among the leading gainers.
Sompo Holding, the diversified insurance group, rose 4.2% to ¥3,306.0; Hoya Corp., the maker of optical products for the semiconductor industry, gained ¥18,635.0; and Konami Group, the video game publisher, gained 3.3% to ¥10,905.0.
China Indexes Extend Losses, Yuan Weakens to a 6-month Low
Market indexes headed lower and extended recent losses as investors assessed the impact of policymakers' plans to revive property market transactions and stabilize economic growth.
Shenzhen and Guangzhou joined other top-tier cities to ease restrictions on home purchases, following efforts by the politburo and the People's Bank of China to encourage more activities in the sector.
Investors are increasingly worried that policymakers' focus on encouraging real estate purchases may fall flat amid a lack of consumer confidence, a lack of credibility among real estate developers, and elevated home prices.
Despite the added incentives to buy real estate, most families are parking their money in bank savings or purchasing precious metals, avoiding the purchase of new and unfinished houses.
Investors are also looking ahead to the release of purchasing managers' index data on Friday, and expectations are high that the manufacturing sector will remain in expansion.
China's top leadership has emphasized advanced manufacturing as one of the key drivers of economic growth, and exports of electric vehicles, renewable energy, and advanced electronics are expected to contribute to job market expansion.
The Chinese yuan drifted to a six-month low of 7.2658 against the U.S. dollar ahead of the release of the manufacturing sector update on Friday.
The People's Bank of China also set the exchange rate near the bottom of its trading range to facilitate exports and stem the growing tide of capital outflow.
Currency traders are bracing for more devaluation of the yuan amid persistent weakness in the Japanese yen, pressuring already narrow margins for exported goods.
China Stock Movers
The CSI 300 index increased 0.1% to 3,614.27, and the Hang Seng index dropped 1.8% to 18,491.92.
Property developers traded with a downward bias on the worry that the recent measures announced by the government are likely to fall short in reviving the fortunes of companies.
China Resources Land decreased 1.6% to HK$30.0, China Vanke declined 3% to $5.70, and Longfor Group fell 1% to HK$13.24.
Property developer stocks have rebounded about 30% in the last three weeks of trading, but stocks in the sector are still down more than 70% from the peak in April 2021.
Lenovo Group declined 1.9% to HK$11.60 after the personal computer maker signed a deal with Saudi Arabia's sovereign wealth fund to sell $2 billion of convertible bonds.
Stock declined on the worry that a higher share count would dilute earnings per share.
BYD soared 5.3% to HK$217.60 after the electric vehicle maker announced an upgrade that could extend the driving range of its hybrid electric vehicle.