Market Update
India Movers: CONCOR, Eclerx, Endurance Tech. KIMS, Prince Pipes, Triveni Turbine, Ratnamani Metals
Arun Goswami
17 May, 2024
Mumbai
Stocks in Mumbai edged lower and trimmed weekly market gains, and investors reacted to the latest batch of mixed quarterly results.
The Sensex index decreased by 0.2% to 73,503.03, and the Nifty index fell by 0.2% to 22,365.05.
On the Mumbai stock exchange, 89 stocks traded at their 52-week highs, and 12 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds inched lower to 7.07%, and the Indian rupee edged lower at ₹83.49 against the U.S. dollar.
IIFL Securities rose 5.4% to ₹166.0 after the financial services company reported better-than-expected quarterly results.
Revenue in the March quarter increased 68.2% to ₹575.5 crore from ₹342.1 crore, and net income more than doubled to ₹180 crore from ₹86.3 crore a year ago, respectively.
Krishna Institute of Medical Sciences decreased 3.3% to ₹1,889.80 after the hospital chain operator reported a decline in earnings in its latest quarter.
Revenue in the March quarter rose 10% to 633.8 crore from 576 crore, and net income declined 29.8% to 65.4 crore from 93 crore a year ago, respectively.
Prince Pipes & Fittings advanced 2.5% to ₹662.50 despite the tubular products company reporting lower revenue and earnings in its latest quarter.
Revenue in the March quarter decreased by 3.2% to ₹740.1 crore from ₹764.4 crore, and net income decreased by 42% to ₹54.6 crore from ₹94.1 crore a year ago, respectively.
Triveni Turbine increased 3.2% to ₹624.55 after the power generation equipment maker reported better-than-expected quarterly results.
Revenue in the March quarter jumped 24% to ₹458.1 crore from ₹369.8 crore, and net income jumped 36.2% to ₹75.6 crore from ₹55.5 crore a year ago, respectively.
Endurance Technologies soared 8.6% to ₹2,200.00 after the company reported strong gains in revenue and earnings in its latest quarter.
Revenue in the March quarter increased 20.2% to ₹2,648.7 crore from ₹2,234.3 crore, and net income soared 54% to ₹210.1 crore from ₹136.4 crore a year ago, respectively.
Eclerx Services increased 4.7% to ₹2,411.0 despite the business process outsourcing company reporting a decline in earnings in its latest quarter.
Revenue increased 10.6% to ₹766.5 crore from ₹693.1 crore, and net income declined 1.5% to ₹130.5 crore from ₹132.5 crore a year ago, respectively.
Container Corporation of India, or CONCOR, decreased 2.8% to ₹1,007.75 after the company reported weaker-than-expected quarterly results.
Revenue in the March quarter increased 6.5% to ₹2,325 crore, and net income advanced 13.5% to ₹317 crore from ₹279 crore a year ago, respectively.
Ratnamani Metals & Tubes fell 2.4% to ₹3,067.0 after the metal processing company reported muted results in its latest quarter.
Revenue in the March quarter fell 0.2% to ₹1,495.7 crore from ₹1,499.1 crore, and net income edged up to ₹192.2 crore from ₹191.6 crore a year ago, respectively.
Building Permits Declined to a 4-month Low in April
Brian Turner
16 May, 2024
Washington, D.C.
Building permits declined by 3% to a seasonally adjusted annual rate of 1.44 million in April, the U.S. Census Bureau reported Thursday.
The annual pace of building permits dropped to the lowest level since 1.4 million in December 2022.
High interest rates and high land and construction costs continued to dent the market.
Single-family authorization declined by 0.8% to 976,000, and multi-family authorization dropped 9.1% to 408,000.
Permits in the Midwest fell by 18.1% to 167,000, in the West by 14.4% to 292,000, but rose in the South by 4.2% to 827,000 and increased by 5.5% in the Northeast to 154,000.
Housing starts in April increased 5.7% to an annual rate of 1.36 million from the revised March estimate of 1.287 million but below the April 2023 rate of 1.368 million.
Single-family housing starts in April were at a rate of 1.031 million, a decline of 0.4% from the revised March rate of 1.035 million.
Privately-owned housing completions in April were at a seasonally adjusted rate of 1.623 million, an increase of 8.6% from the revised March estimate of 1.495 million and 14.6% higher than the rate of 1.46 million in April 2023.
Single-family housing completions were at a rate of 1.092 million, an increase of 15.4% from the revised rate of 946,000 in March.
Positive Mood Prevails as U.S. Indexes Scale Higher
Alexander Garcia
16 May, 2024
Miami
Stocks on Wall Street inched further into record territory after major indexes soared to new record highs in the previous session.
The S&P 500 index and the Nasdaq Composite advanced to new highs after annual core consumer price inflation rose 3.4%, less than expected in April.
The lighter-than-expected inflation report followed the hotter-than-expected producer price inflation update released on Tuesday.
Investors bid up technology and high-growth stocks in the hopes that the Federal Reserve has more flexibility in lowering interest rates in the second half.
On the economic front, industrial production declined by 0.4% in April from a year ago, the Federal Reserve reported Thursday.
Total production declined in April from the upwardly revised 0.1% in February and March.
Manufacturing production, which makes up 78% of total production, fell 0.5%, and mining output decreased 1.3%, offsetting an increase in utility production by 2.3%.
On a monthly basis, industrial production was little changed in April after rising 0.1% in March and 0.8% in February.
Building permits declined in April.
Building permits declined by 3% to a seasonally adjusted annual rate of 1.44 million in April, the U.S. Census Bureau reported Thursday.
The annual pace of building permits dropped to the lowest level since 1.4 million in December 2022.
High interest rates and high land and construction costs continued to dent the market.
Single-family authorization declined by 0.8% to 976,000, and multi-family authorization dropped 9.1% to 408,000.
Permits in the Midwest fell by 18.1% to 167,000, in the West by 14.4% to 292,000, but rose in the South by 4.2% to 827,000 and increased by 5.5% in the Northeast to 154,000.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.2% to 5,320.05, and the Nasdaq Composite rose 0.2% to 16,776.54.
The yield on 2-year Treasury notes edged lower to 4.76%, 10-year Treasury notes decreased to 4.34%, and 30-year Treasury bonds edged lower to 4.49%.
WTI crude oil increased $0.13 to $78.76 a barrel, and natural gas prices increased 2 cents to $2.43 a thermal unit.
Gold decreased by $7.73 to $2,384.29 an ounce, and silver fell 10 cents to $29.62.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.47.
U.S. Stock Movers
Cisco Systems jumped 3.2% to $51.24 after the networking gear maker reported better-than-estimated fiscal third quarter earnings.
Walmart Inc. increased 5.6% to $63.05 after the retail giant reported better-than-expected fiscal first-quarter results.
Chubb Ltd. increased 6.7% to $269.99 after Berkshire Hathaway disclosed in a regulatory filing that it has acquired nearly 26 million shares for $6.7 billion.
Meta Platforms declined 0.9% to $477.45 after the social media platform operator was under investigation by the European Commission for the alleged breaking of the region's content laws regarding child safety.
Deere & Co. decreased 5.8% to $390.0 after the farm equipment maker lowered its annual earnings outlook.
The agriculture equipment maker reported better-than-expected quarterly results and lowered its annual earnings outlook to $7 billion from the previous estimate between $7.50 and $7.75 billion.
European Turn Lower from Record Highs
Stock market indexes in Europe turned lower after reaching new highs in the previous session, and investors shifted their focus to the latest batch of corporate results.
Market indexes in London, Paris, and Frankfurt traded at new highs in the previous session in the hopes that the Bank of England and the European Central Bank are still on track to start cutting rates as early as June.
The rate-cut expectations gained further momentum after U.S. core inflation in April eased to a three-year low of 3.4%, stoking speculation that the Federal Reserve may have more room to cut interest rates in the second half.
In commodities trading, Brent crude dropped to a six-week low and copper traded at a three-year high in the hopes of rising demand fueled by the building of new data centers.
Europe Indexes and Yields
The DAX index decreased by 0.7% to 18,725.71; the CAC-40 index fell by 0.6% to 8,188.49; and the FTSE 100 index inched lower by 0.1% to 8,438.65.
The yield on 10-year German bonds edged down to 2.42%; French bonds inched lower to 2.92%; the UK gilts edged lower to 4.07%; and Italian bonds inched lower to 3.72%.
The euro edged higher to $1.087; the British pound inched higher to $1.267; and the U.S. dollar eased to 90.21 Swiss cents.
Brent crude increased $0.60 to $83.32 a barrel, and the Dutch TTF natural gas rose by €1.07 to €30.55 per MWh.
Europe Stock Movers
Deutsche Telekom declined by 0.2% to €21.99 after the German telecommunication network operator reported a sharp decline in earnings.
Net income in the first quarter plunged 87.1% to €1.98 billion from €15.36 billion.
Siemens fell by 5.4% to €177.44 after the industrial equipment company reported a decline in earnings in its fiscal second quarter amid weak demand in its automation business.
Sage Group PLC dropped 9.4% to 1,089.62 pence, despite the U.K.-based software company reporting robust first-half results.
Future plc rose 11.9% to 973.41 pence after the publishing company announced a £45 million stock buyback plan.
The company said revenue in the first half declined 3% to £391.5 million from £404.7 million, pre-tax profit dropped to £46.6 million from £66.4 million, and earnings per share fell 38% to 29 pence from 46.7 pence a year ago.
In the period, the company returned £35.9 million to shareholders, including £32 million through the completed £45 million stock repurchase program and £3.9 million in dividends.
BT Group jumped 11.6% to 126.25 pence after the new chief executive announced plans to more than double free cash flow over the next five years.
EasyJet declined 4.0% to 510.68 pence after the deep discount airline reported a larger-than-expected first-half loss of £350 million.
Aegon NV jumped 0.7% to €6.27 after the Dutch insurance company announced a stock repurchase plan.
Eni SpA decreased by 2.4% to €14.75 after the Italian Economy Ministry announced its plans to sell a 2.8% stake in the company to raise about €1.4 billion.
Swiss Re increased 3.4% to CHF 107.30 after the Swiss reinsurance company reported positive first quarter results.
Zurich Insurance Group advanced 1.9% to CHF 462.10 after the company reported better-than-expected first-quarter results.
Tech Stocks Support Rebound In Japan Indexes
Stocks and benchmark indexes in Toyo advanced following the market rally in overnight trading in New York.
The weaker-than-anticipated U.S. core consumer price inflation in April of 3.4% raised hopes that the Federal Reserve may be able to cut interest rates at least twice in the second half of 2024.
Investors also overlooked the weakness in economic growth in the first quarter, as the country suffered a devastating earthquake on the Noto Peninsula on the first day of 2024.
The Japanese yen traded at 154.19 against the U.S. dollar after the release of the GDP data.
Japan's GDP Contracted In the First Quarter
Japan's economy shrank more than expected in the first quarter on the weakness in consumer spending and business investment, the Cabinet Office reported Thursday.
GDP contracted 0.5% from the previous quarter in the first quarter of 2024, following a downwardly revised stagnation in the final quarter of 2023.
Consumer spending fell at a faster pace of 0.7% in the fourth quarter compared to a decline of 0.4% in the fourth quarter because of weak wage growth and higher prices.
Capital expenditure in the quarter fell 1.8%, largely impacted by the halting of production at Toyota's small car subsidiary, Daihatsu Motor.
International trade also subtracted from economic growth after exports fell by 5.0%, faster than the 3.4% decline in imports.
Japan Stock Movers
The Nikkei 225 Stock Average added 1.1% to 38,826.77, and the Topix index gained 0.1% to 2,733.94.
Tech stocks led the gainers and tracked gains in overnight trading in New York.
Tokyo Electron, Advantest, Screen Holdings, Lasertec, and SoftBank Group gained between 1.5% and 3.5%.
Sumitomo Mitusi Financial and Mizuho Financial gained around 1%.
Mitsubishi UFJ Financial decreased 4% to ¥1,523.50 despite the bank reporting better-than-expected net income and declaring a higher-than-expected dividend.
Net income in the March quarter increased to 192.87 billion yen, and the company declared a cash dividend of 20.50 yen.
Recruit Holdings increased 9% to ¥7,700.0 after the company reported better-than-expected quarterly results but also estimated improving market conditions.
Revenue in the fiscal fourth quarter increased 1.9% to 843.7 billion yen from 827.7 billion yen, and net income rose to 34 billion yen from 22.3 billion yen from a year ago, respectively.
Revenue in the staffing segment increased by 2.4% to 392.8 billion yen; in HR technology, it increased by 0.9% to 253.5 billion yen; and in matching and solutions, it increased by 2.5% to 2081. billion yen.
HR technology segment includes U.S.-based Indeed and Glassdoor, and the company said revenue and job ads continue to decline on job sites by 10.1% in U.S. dollars.
Nisshin Seifun dropped 9% to ¥1,868.50, and Nippon Paper Industries declined 8.5% to ¥1,011.0.
China Indexes Advanced Ahead of Key Economic Releases
Stocks in Shanghai and Hong Kong advanced ahead of the release of key economic data on Friday and earnings from leading tech companies later in the day.
Investors have been increasing exposure to Chinese stocks in the hopes that state-controlled companies will support financial markets through steady buying of large-cap companies.
In Hong Kong, the Hang Seng index advanced after investors returned from a public holiday.
In active trading, stocks in Hong Kong gained following the easing of core consumer price inflation in the U.S. in April to 3.4%, raising hopes that the Federal Reserve could lower rates two times in the second half of 2024.
Despite the market enthusiasm, foreign investors are skeptical about the long-term outlook for Chinese stocks as more Chinese companies shift or expand manufacturing in locations outside China.
Moreover, Chinese authorities are also stepping up oversight and raising barriers for capital repatriations for foreign companies.
In addition, Chinese banks have yet to book losses stemming from large loans issued to property developers, and current earnings do not reflect the weakness in the loan portfolio.
China Stock Movers
The CSI 300 index increased 0.8% to 3,655.44, and the Hang Seng index advanced 1.6% to 19,382.75.
Market sentiment was also bolstered in the hopes that the latest move by the Hangzhou government will be followed by other regional governments in reviving the property market.
The Hangzhou City government announced its plans to buy existing homes in the city and rent them affordable housing. The move was designed to inject liquidity into the property market and make homes available to a wider group of families.
On Friday, the Chinese statistical office is scheduled to release April's retail sales, industrial production, and investments.
Tech stocks advanced following the surge in the sector in overnight trading in New York and ahead of earnings results from Baidu, JD.com, and Meituan.
Baidu decreased 0.2% to HK$109.0, JD.com gained 2.4% to HK$132.20, and Meituan advanced 3% to HK$125.60.
Bank of China, Agriculture Bank of China, ICBC, and China Construction Bank advanced between 3% and 6% in Hong Kong trading in the hopes that interest rates may be lowered following the possible rate cuts in the U.S.
Li Auto and BYD declined 2%, but Xpeng and Nio gained 1% in Hong Kong trading.
U.S. Movers: Cisco Systems, Chubb, Deere, Walmart
Scott Peters
16 May, 2024
New York City
Cisco Systems jumped 3.2% to $51.24 after the networking gear maker reported better-than-estimated fiscal third quarter earnings.
Revenue declined 13% to $12.7 billion from $14.6 billion, net income plunged 41% to $1.9 billion from $3.2 billion, and diluted earnings per share declined to 46 cents from 78 cents a year ago.
Product revenue in the quarter declined by 19%, service revenue rose by 6% in the quarter.
The company completed the acquisition of Splunk in the quarter, and Splunk contributed $413 million in revenue.
The company declared a 40-cent per share cash dividend to shareholders on record on July 5 to be repaid on July 24.
Walmart Inc. increased 5.6% to $63.05 after the retail giant reported better-than-expected fiscal first-quarter results.
Total revenue in the first quarter increased 6% to $161.5 million from $152.3 million, net income soared 205% to $5.1 billion from $1.7 billion, and diluted earnings per share advanced to 63 cents from 21 cents a year ago.
Chubb Ltd. increased 6.7% to $269.99 after Berkshire Hathaway disclosed in a regulatory filing that it has acquired nearly 26 million shares for $6.7 billion.
Meta Platforms declined 0.9% to $477.45 after the social media platform operator was under investigation by the European Commission for the alleged breaking of the region's content laws regarding child safety.
Deere & Co. decreased 5.8% to $390.0 after the farm equipment maker lowered its annual earnings outlook.
The agriculture equipment maker reported better-than-expected quarterly results and lowered its annual earnings outlook to $7 billion from the previous estimate between $7.50 and $7.75 billion.
Revenue in the quarter decreased 12% to $15.3 million from $17.4 million, net income declined to $2.37 billion from $2.86 billion, and diluted earnings per share fell to 8.53 from $9.65 a year ago.
Rate-cut Expectations Keep Wall Street Indexes Near Record Highs
Barry Adams
16 May, 2024
New York City
Stocks on Wall Street inched forward after major indexes soared to new record highs in the previous session.
The S&P 500 index and the Nasdaq Composite advanced to new highs after annual core consumer price inflation rose 3.4%, less than expected in April.
The lighter-than-expected inflation report followed the hotter-than-expected producer price inflation update released on Tuesday.
Investors bid up tech and high-growth stocks in the hopes that the Federal Reserve has more flexibility in lowering interest rates in the second half.
Building Permits Declined in April
Building permits declined by 3% to a seasonally adjusted annual rate of 1.44 million in April, the U.S. Census Bureau reported Thursday.
The annual pace of building permits dropped to the lowest level since 1.4 million in December 2022.
High interest rates and high land and construction costs continued to dent the market.
Single-family authorization declined by 0.8% to 976,000, and multi-family authorization dropped 9.1% to 408,000.
Permits in the Midwest fell by 18.1% to 167,000, in the West by 14.4% to 292,000, but rose in the South by 4.2% to 827,000 and increased by 5.5% in the Northeast to 154,000.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.1% to 5,310.06, and the Nasdaq Composite rose 0.5% to 16,752.71.
The yield on 2-year Treasury notes edged lower to 4.76%, 10-year Treasury notes decreased to 4.34%, and 30-year Treasury bonds edged lower to 4.49%.
WTI crude oil increased $0.13 to $78.76 a barrel, and natural gas prices increased 2 cents to $2.43 a thermal unit.
Gold decreased by $7.73 to $2,384.29 an ounce, and silver fell 10 cents to $29.62.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.47.
U.S. Stock Movers
Cisco Systems jumped 3.2% to $51.24 after the networking gear maker reported better-than-estimated fiscal third quarter earnings.
Walmart Inc. increased 5.6% to $63.05 after the retail giant reported better-than-expected fiscal first-quarter results.
Chubb Ltd. increased 6.7% to $269.99 after Berkshire Hathaway disclosed in a regulatory filing that it has acquired nearly 26 million shares for $6.7 billion.
Meta Platforms declined 0.9% to $477.45 after the social media platform operator was under investigation by the European Commission for the alleged breaking of the region's content laws regarding child safety.
Deere & Co. decreased 5.8% to $390.0 after the farm equipment maker lowered its annual earnings outlook.
The agriculture equipment maker reported better-than-expected quarterly results and lowered its annual earnings outlook to $7 billion from the previous estimate between $7.50 and $7.75 billion.
Europe Movers: Aegon, BT, Deutsche Telekom, easyJet, Eni, Future PLC, Sage Group, Siemens, Swiss Re, Zurich Insurance
Inga Muller
16 May, 2024
Frankfurt
European market indexes traded around the high reached in the previous session, and investors assessed the latest batch of quarterly results.
The DAX index decreased by 0.3% to 18,815.31; the CAC-40 index fell by 0.6% to 8,190.17; and the FTSE 100 index inched lower by 0.3% to 8,422.45.
The yield on 10-year German bonds edged down to 2.42%; French bonds inched lower to 2.92%; the UK gilts edged lower to 4.07%; and Italian bonds inched lower to 3.72%.
Deutsche Telekom declined by 0.2% to €21.99 after the German telecommunication network operator reported a sharp decline in earnings.
Net income in the first quarter plunged 87.1% to €1.98 billion from €15.36 billion.
Siemens fell by 5.4% to €177.44 after the industrial equipment company reported a decline in earnings in its fiscal second quarter amid weak demand in its automation business.
Sage Group PLC dropped 9.4% to 1,089.62 pence, despite the U.K.-based software company reporting robust first-half results.
Future plc rose 11.9% to 973.41 pence after the publishing company announced a £45 million stock buyback plan.
The company said revenue in the first half declined 3% to £391.5 million from £404.7 million, pre-tax profit dropped to £46.6 million from £66.4 million, and earnings per share fell 38% to 29 pence from 46.7 pence a year ago.
In the period, the company returned £35.9 million to shareholders, including £32 million through the completed £45 million stock repurchase program and £3.9 million in dividends.
BT Group jumped 11.6% to 126.25 pence after the new chief executive announced plans to more than double free cash flow over the next five years.
EasyJet declined 4.0% to 510.68 pence after the deep discount airline reported a larger-than-expected first-half loss of £350 million.
Aegon NV jumped 0.7% to €6.27 after the Dutch insurance company announced a stock repurchase plan.
Eni SpA decreased by 2.4% to €14.75 after the Italian Economy Ministry announced its plans to sell a 2.8% stake in the company to raise about €1.4 billion.
Swiss Re increased 3.4% to CHF 107.30 after the Swiss reinsurance company reported positive first quarter results.
Zurich Insurance Group advanced 1.9% to CHF 462.10 after the company reported better-than-expected first-quarter results.
European Markets Trade Near Record Highs; Bond Yields Edged Lower and Euro Edged Higher
Bridgette Randall
16 May, 2024
Frankfurt
Stock market indexes in Europe turned lower after reaching new highs in the previous session, and investors shifted their focus to the latest batch of corporate results.
Market indexes in London, Paris, and Frankfurt traded at new highs in the previous session in the hopes that the Bank of England and the European Central Bank are still on track to start cutting rates as early as June.
The rate-cut expectations gained further momentum after U.S. core inflation in April eased to a three-year low of 3.4%, stoking speculation that the Federal Reserve may have more room to cut interest rates in the second half.
In commodities trading, Brent crude dropped to a six-week low and copper traded at a three-year high in the hopes of rising demand fueled by the building of new data centers.
Europe Indexes and Yields
The DAX index decreased by 0.3% to 18,815.31; the CAC-40 index fell by 0.6% to 8,190.17; and the FTSE 100 index inched lower by 0.3% to 8,422.45.
The yield on 10-year German bonds edged down to 2.42%; French bonds inched lower to 2.92%; the UK gilts edged lower to 4.07%; and Italian bonds inched lower to 3.72%.
The euro edged higher to $1.087; the British pound inched higher to $1.267; and the U.S. dollar eased to 90.21 Swiss cents.
Brent crude increased $0.30 to $82.44 a barrel, and the Dutch TTF natural gas rose by €0.63 to €30.11 per MWh.
Europe Stock Movers
Deutsche Telekom declined by 0.2% to €21.99 after the German telecommunication network operator reported a sharp decline in earnings.
Net income in the first quarter plunged 87.1% to €1.98 billion from €15.36 billion.
Siemens fell by 5.4% to €177.44 after the industrial equipment company reported a decline in earnings in its fiscal second quarter amid weak demand in its automation business.
Sage Group PLC dropped 9.4% to 1,089.62 pence, despite the U.K.-based software company reporting robust first-half results.
Future plc rose 11.9% to 973.41 pence after the publishing company announced a £45 million stock buyback plan.
The company said revenue in the first half declined 3% to £391.5 million from £404.7 million, pre-tax profit dropped to £46.6 million from £66.4 million, and earnings per share fell 38% to 29 pence from 46.7 pence a year ago.
In the period, the company returned £35.9 million to shareholders, including £32 million through the completed £45 million stock repurchase program and £3.9 million in dividends.
BT Group jumped 11.6% to 126.25 pence after the new chief executive announced plans to more than double free cash flow over the next five years.
EasyJet declined 4.0% to 510.68 pence after the deep discount airline reported a larger-than-expected first-half loss of £350 million.
Aegon NV jumped 0.7% to €6.27 after the Dutch insurance company announced a stock repurchase plan.
Eni SpA decreased by 2.4% to €14.75 after the Italian Economy Ministry announced its plans to sell a 2.8% stake in the company to raise about €1.4 billion.
Swiss Re increased 3.4% to CHF 107.30 after the Swiss reinsurance company reported positive first quarter results.
Zurich Insurance Group advanced 1.9% to CHF 462.10 after the company reported better-than-expected first-quarter results.
Japan's GDP Contracted After Consumers and Businesses Curb Spending
Akira Ito
16 May, 2024
Tokyo
Stocks and benchmark indexes in Toyo advanced following the market rally in overnight trading in New York.
The weaker-than-anticipated U.S. core consumer price inflation in April of 3.4% raised hopes that the Federal Reserve may be able to cut interest rates at least twice in the second half of 2024.
Investors also overlooked the weakness in economic growth in the first quarter, as the country suffered a devastating earthquake on the Noto Peninsula on the first day of 2024.
The Japanese yen traded at 154.19 against the U.S. dollar after the release of the GDP data.
Japan's GDP Contracted In the First Quarter
Japan's economy shrank more than expected in the first quarter on the weakness in consumer spending and business investment, the Cabinet Office reported Thursday.
GDP contracted 0.5% from the previous quarter in the first quarter of 2024, following a downwardly revised stagnation in the final quarter of 2023.
Consumer spending fell at a faster pace of 0.7% in the fourth quarter compared to a decline of 0.4% in the fourth quarter because of weak wage growth and higher prices.
Capital expenditure in the quarter fell 1.8%, largely impacted by the halting of production at Toyota's small car subsidiary, Daihatsu Motor.
International trade also subtracted from economic growth after exports fell by 5.0%, faster than the 3.4% decline in imports.
Japan Stock Movers
The Nikkei 225 Stock Average added 1.1% to 38,826.77, and the Topix index gained 0.1% to 2,733.94.
Tech stocks led the gainers and tracked gains in overnight trading in New York.
Tokyo Electron, Advantest, Screen Holdings, Lasertec, and SoftBank Group gained between 1.5% and 3.5%.
Sumitomo Mitusi Financial and Mizuho Financial gained around 1%.
Mitsubishi UFJ Financial decreased 4% to ¥1,523.50 despite the bank reporting better-than-expected net income and declaring a higher-than-expected dividend.
Net income in the March quarter increased to 192.87 billion yen, and the company declared a cash dividend of 20.50 yen.
Recruit Holdings increased 9% to ¥7,700.0 after the company reported better-than-expected quarterly results but also estimated improving market conditions.
Revenue in the fiscal fourth quarter increased 1.9% to 843.7 billion yen from 827.7 billion yen, and net income rose to 34 billion yen from 22.3 billion yen from a year ago, respectively.
Revenue in the staffing segment increased by 2.4% to 392.8 billion yen; in HR technology, it increased by 0.9% to 253.5 billion yen; and in matching and solutions, it increased by 2.5% to 2081. billion yen.
HR technology segment includes U.S.-based Indeed and Glassdoor, and the company said revenue and job ads continue to decline on job sites by 10.1% in U.S. dollars.
Nisshin Seifun dropped 9% to ¥1,868.50, and Nippon Paper Industries declined 8.5% to ¥1,011.0.
China Indexes Advanced Ahead of Key Economic Data and Earnings Releases
Li Chen
16 May, 2024
Hong Kong
Stocks in Shanghai and Hong Kong advanced ahead of the release of key economic data on Friday and earnings from leading tech companies later in the day.
Investors have been increasing exposure to Chinese stocks in the hopes that state-controlled companies will support financial markets through steady buying of large-cap companies.
In Hong Kong, the Hang Seng index advanced after investors returned from a public holiday.
In active trading, stocks in Hong Kong gained following the easing of core consumer price inflation in the U.S. in April to 3.4%, raising hopes that the Federal Reserve could lower rates two times in the second half of 2024.
Despite the market enthusiasm, foreign investors are skeptical about the long-term outlook for Chinese stocks as more Chinese companies shift or expand manufacturing in locations outside China.
Moreover, Chinese authorities are also stepping up oversight and raising barriers for capital repatriations for foreign companies.
In addition, Chinese banks have yet to book losses stemming from large loans issued to property developers, and current earnings do not reflect the weakness in the loan portfolio.
The CSI 300 index increased 0.8% to 3,655.44, and the Hang Seng index advanced 1.6% to 19,382.75.
Market sentiment was also bolstered in the hopes that the latest move by the Hangzhou government will be followed by other regional governments in reviving the property market.
The Hangzhou City government announced its plans to buy existing homes in the city and rent them affordable housing. The move was designed to inject liquidity into the property market and make homes available to a wider group of families.
On Friday, the Chinese statistical office is scheduled to release April's retail sales, industrial production, and investments.
Tech stocks advanced following the surge in the sector in overnight trading in New York and ahead of earnings results from Baidu, JD.com, and Meituan.
Baidu decreased 0.2% to HK$109.0, JD.com gained 2.4% to HK$132.20, and Meituan advanced 3% to HK$125.60.
Bank of China, Agriculture Bank of China, ICBC, and China Construction Bank advanced between 3% and 6% in Hong Kong trading in the hopes that interest rates may be lowered following the possible rate cuts in the U.S.
Li Auto and BYD declined 2%, but Xpeng and Nio gained 1% in Hong Kong trading.
India Movers: LIC Housing, NCC, Paradeep Phosphates, Pricol, Somany Ceramics, TCI, Titagarh Rail
Arun Goswami
16 May, 2024
Mumbai
Stocks in Mumbai advanced, and investors reacted positively to the latest batch of quarterly results.
The Sensex index increased by 0.3% to 73,170.32, and the Nifty index rose by 0.2% to 22,238.50.
On the Mumbai stock exchange, 96 stocks traded at their 52-week highs, and 17 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds inched lower to 7.06%, and the Indian rupee edged lower at ₹83.46 against the U.S. dollar.
Transport Corporation of India advanced 1.5% to ₹895.65 after the logistics and supply chain management company reported positive quarterly results.
Revenue in the March quarter increased 10.2% to ₹1,079 crore from ₹979.3 crore, and net income soared 25.3% to ₹102.1 crore from ₹85.1 crore a year ago, respectively.
Somany Ceramics increased 1.1% to ₹625.70 after the tiles and flooring material maker reported strong gains in the latest quarter.
Revenue in the March quarter increased 8.6% to ₹737.5 crore from ₹679.2 crore, and net income jumped 26.8% to ₹30.8 crore from ₹24 crore a year ago, respectively.
NCC Ltd. increased 1.8% to ₹256.0 after the industrial construction company reported a rise in revenue and earnings in the latest quarter.
Revenue in the March quarter rose 31% to 6,485 crore from 4,949 crore, and net income advanced 25.2% to 239.2 crore from 191 crore a year ago, respectively.
Paradeep Phosphates decreased 0.9% to ₹71.45 after revenue declined in the latest quarter.
Revenue in the March quarter fell 38.5% to ₹2,242.7 crore from ₹3,644 crore, and net income rose to ₹21.5 crore from ₹10.0 crore a year ago, respectively.
Pricol Ltd. rose 2.8% to ₹448.75 after the automotive component maker reported strong gains in revenue and earnings.
Revenue in the March quarter rose 11.0% to ₹566.2 crore from ₹509.7 crore, and net income advanced 39.3% to ₹41.5 crore from ₹29.8 crore a year ago, respectively.
LIC Housing Finance increased 0.5% to ₹631.10 after the company reported mixed quarterly results.
Net interest income in the March quarter rose 12.4% to ₹2,237.6 crore from ₹1,990.3 crore, and net income dropped 7.6% to ₹1,090.8 crore from ₹1,180 crore a year ago, respectively.
Power Finance rose 3.7% to ₹452.85 after the financial services provider to electric utilities reported a surge in earnings and revenues.
Revenue in the March quarter rose 20% to ₹12,243.7 crore and net income advanced to 18.4% to ₹4,135 crore, from a year ago, respectively.
The company declared a final dividend of ₹2.50 per share, in addition to the ₹11 per share paid during the fiscal year.
Retail Sales Flat in April
Brian Turner
15 May, 2024
Washington, D.C.
Retail sales in April rose less than expected as consumers battled elevated prices for food and shelter and high interest rates.
Advance retail sales adjusted for seasonal factors but not for inflation were flat compared to the previous month in April, the U.S. Census Bureau reported Wednesday.
Retail sales rose 3.0% from a year ago to $705.2 billion, indicating consumers are still spending but staying focused on the basics and avoiding discretionary items.
March retail sales were upwardly revised to 0.7% from the previous estimate of a 0.6% increase.
Retail trade sales were virtually unchanged from March but up 2.7% above last year.
Nonstore retailers were up 7.5% from last year, while food services and drinking places were up 5.5% from April 2023.