Market Update
Nikkei Extended Rally to Fourth Day, Japan's Service Sector Contracted In June
Akira Ito
03 Jul, 2024
Tokyo
Investors bid up stocks in Tokyo and overlooked the latest update on the service sector.
The Nikkei 225 and the Topix indexes jumped following the gains in overnight trading in New York that pushed the S&P 500 index and the Nasdaq Composite to new record highs.
Tech stocks led the gainers amid optimism about earnings, and mega-cap stocks in the sector led the market's advance.
The yen drifted to a new 38-year low of 161.85 against the U.S. dollar as the Bank of Japan's policymakers struggled to devise a plan to shrink the yield gap between the U.S. and Japan.
The au Jibun Bank Japan Services PMI for June was revised down to 49.4 from the preliminary estimate of 49.8, S&P Global reported Wednesday.
The service sector activity contracted for the first time since August 2022, after all sub-sectors excluding information and communication shrank in the month.
The index reversed from 53.8 in May.
The input costs in the service sector rose to a 10-month high, but the prices charged to customers rose at the slowest pace since November 2023.
Market indexes in Tokyo have faced selling pressure in the second quarter as foreign investors lighten positions and look elsewhere in the region to China and India.
Despite the gains in the Nikkei 225 index over the last four days, investors are cautious because of the lack of progress on corporate governance reform and interest rate uncertainty.
Moreover, the Bank of Japan is set to reduce its Japanese government bond buying as early as next month.
Japan Stock Movers
The Nikkei 225 stock average increased 1.2% to 40,567.79, and the Topix index added 0.4% to 2,868.18.
Retail stocks were in focus after the yen hovered at a 38-year low, and the upsurge in foreign tourists from China, the U.S., and South Korea is expected to boost revenue this summer.
The number of U.S. tourists visiting Japan by air rose 17.4% to 900,000 in the first five months to May 2024, according to the data released by the International Trade Administration.
The U.S. arrivals soared 35.5% from the previous pre-pandemic peak in 2019, after Japan ended its travel restrictions and dropped to a multi-decade low.
Fast Retailing jumped 1.8% to ¥42,120.0, J. Front Retailing gained 0.4% to ¥1,910.50, Takashimaya declined 0.3% to ¥2,943.50, and Seven & I Holdings advanced 0.2% to ¥1,977.50.
Tech stocks were among the leading gainers following the rise in the sector in overnight trading in New York.
Tokyo Electron, Advantest, Screen Holdings, and Disco Corp. advanced between 1.5% and 3.0%.
Exporters fell despite the yen's weakness.
Panasonic, Canon, and Sony declined more than 1%, but Mitsubishi Electric advanced 1%.
TDK, Chugai Pharma, IHI, Murata Manufacturing, and Mitsubishi Heavy Industries gained between 3% and 5%.
However, NTT Data, Yokohama Rubber, and Chiba Bank declined more than 3%.
Hang Seng Rally Extends to Third Day, China Service Sector Growth Drops to an 8-month Low
Li Chen
03 Jul, 2024
Hong Kong
Investors battled mixed emotions, and market indexes diverged in Hong Kong and Shanghai.
Benchmark indexes in Hong Kong gained for the third consecutive day in a row as mainland investors added exposure to dividend-paying stocks.
Tech stocks led the market gainers after Alibaba said it completed its $5 billion stock repurchase plan in the last quarter.
Market enthusiasm was capped after the service sector growth rate dropped to an 8-month low.
The Caixin China service purchasing managers' index eased to 51.2 in June from 54.0 in May, S&P Global reported Wednesday.
China's services sector is one of the few bright spots in the economy, as the manufacturing sector struggles amid weak domestic demand and the construction sector continues to shrink after weak consumer confidence.
China Stock Movers
The Hang Seng index increased 1.4% to 17,978.52, and the CSI 300 index decreased 0.3% to 3,466.80.
Alibaba Group jumped 2.9% to HK $72.50, Meituan added 2.4% to HK $115.50, and Baidu jumped 3.2% to HK $86.55.
Electric vehicle makers were focused on the expectation that domestic and export sales would continue to advance despite the rising tensions with the US and the European Union.
On Tuesday, Tesla said it sold 443,956 vehicles in the June quarter, 4.8% lower than a year ago, which helped with incentives and price cuts.
BYD increased 0.5% to HK $229.40, Li Auto soared 5% to HK $77.55, and Xpeng gained 2% to HK $30.45.
Three new companies listed their shares on the stock exchanges in Hong Kong and Shanghai.
Shanghai Ananda Drive Techniques soared to 44.20 yuan after the driving equipment maker priced its initial public offering at 20.56 per share and raised 596 million yuan.
Zhonggan Communication Group plunged 37% to 79 HK cents, and the company priced its initial public offering price at HK 1.25 per share.
Xi'an Kingfar Property Services dropped 15% to HK $6.45, and the company priced its initial public offering at HK $7.50 per share and raised HK $125 million.
India Movers: Britannia Industries, Concor, Force Motor, M&M Financial, Rail Vikas Nigam, Zomato
Arun Goswami
03 Jul, 2024
Mumbai
The Sensex and the Nifty indexes advanced to record territory amid positive market sentiment despite the worries of elevated valuations.
The Sensex index decreased by 0.1% to 79,384.47, and the Nifty index fell by 0.1% to 24,109.90.
On the Mumbai stock exchange, 93 stocks traded at their 52-week highs, and 4 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 weakened to ₹83.52 against the U.S. dollar.
Rail Vikas Nigam Ltd. gained 1.7% to ₹418.10, and the company won an order worth ₹132.6 crore from Central Railways to upgrade the Nagpur division.
Container Corporation declined 0.2% to ₹1,024.95, and the central government is likely to consider selling a smaller stake of less than 7% in the company.
Earlier, the government was looking to privatize the entire company.
Zomato declined 0.7% to ₹207.93, and the food delivery company said it has withdrawn its RBI application to start a non-banking financial services company.
Britannia Industries gained 1.6% to ₹5,488.45 after the food products maker appointed Sunil Siddharth Lalbhai and former RBI Governor Urjit Patel as non-executive and independent directors of the company.
Force Motors declined 0.7% to ₹9,139.20 after the automotive company said June sales decreased 3% to 2,553 vehicles.
Mahindra & Mahindra Financial Services decreased 0.7% to ₹300.35, and the company said new loans in the June quarter increased 5% from a year ago to ₹12,730 crore.
S&P 500 and Nasdaq Scale New Highs After Powell Comments
Alexander Garcia
02 Jul, 2024
Miami
Benchmark indexes on Wall Street lacked direction as investors stayed on the sidelines in the absence of domestic catalysts.
The S&P 500 index and the Nasdaq Composite hovered near the flatline amid a lack of domestic catalysts and valuation worries.
Job openings edged slightly higher in May, but hovered near the three-year low reached in April.
The number of job openings rose by 221,000 from the previous month to 8.14 million in May, following a downwardly revised 7.9 million in April, the U.S. Bureau of Labor Statistics reported Tuesday.
The number of job openings is hovering near a three-year low, but openings are still above the pre-pandemic level of 7.2 million, indicating job market conditions are moderating but still tight.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.4% to 5,495.28, and the Nasdaq Composite rose 0.7% to 17,994.47.
The yield on 2-year Treasury notes edged higher to 4.75%, 10-year Treasury notes increased to 4.43%, and 30-year Treasury bonds edged higher to 4.60%.
WTI crude oil increased $0.58 to $83.94 a barrel, and natural gas prices fell 3 cents to $2.46 a thermal unit.
Gold decreased by $3.21 to $2,328.79 an ounce, and silver rose 32 cents to $29.32.
The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 105.81.
U.S. Stock Movers
Tesla jumped 4.8% to $220.01 after the electric vehicle maker reported better-than-expected vehicle sales in the second quartet.
The company said its worldwide global sales increased to 440,000 units and produced 411,000 units.
Atlassin Corp. advanced 4.3% to $185.85 after Piper Sandler upgraded its stock ranking to "overweight," and analyst Rob Owen said the current price is attractive for investors to accumulate stock.
Paramount Global Class B jumped 4% to $10.56 on a CNBC report that the company's streaming division is in merger talks with several potential partners.
General Motors edged up 0.1% to $46.70 after the company's Board approved a new $6 billion stock repurchase plan.
Polestar decreased 0.3% to $0.14 after the electric vehicle maker said first quarter loss widened to $274.3 million from $37.7 million a year ago.
Election Uncertainties Weigh On European Trading Sentiment
European markets traded down amid election uncertainty, a weak economic outlook, and ongoing tensions with Russia.
Benchmark indexes in Paris and London fell ahead of parliamentary elections in the UK on July 4 and the second round of elections in France on July 7.
Market sentiment was weak, and bond yields advanced in the currency union as investors feared that lawmakers in the soon-to-be-appointed new parliaments in France and the UK may struggle to cut spending and lower national debt.
Eurozone Inflation Eased in June
Consumer price inflation in the eurozone eased to 2.5% in June after edging higher to 2.6% in May, Eurostat, the statistical agency of the European Union, reported Tuesday.
Prices for food, tobacco, and alcohol rose at a slower pace of 2.5% compared to 2.6% in the previous month and energy at 0.2% from 0.3%.
Meanwhile, inflation was steady for non-energy industrial goods at 0.7% and for services at 4.1%.
Core inflation, which excludes food, energy, tobacco, and alcohol, was unchanged at 2.9%.
Among the largest economies, inflation eased in Germany to 2.5% from 2.8%, in France to 2.5% from 2.6%, and in Spain to 3.5% from 3.8%, but rose in Italy to 0.9% from 0.8%.
Eurozone Unemployment Rate Remained Steady in June
The jobless rate in the eurozone held steady at the record low of 6.4% in May, matching the rate in the previous month, Eurostat reported Tuesday.
The number of unemployed people increased by 38,000 from the previous month to 11.1 million; however, the jobless rate among those younger than 25 was 14.1%, matching the revised rate in April.
Among the four largest economies in the currency union, Spain recorded the highest rate of 11.7%, followed by France at 7.4%, Italy at 6.8%, and Germany at 3.3%.
The unemployment rate in the eurozone was 6.5% a year ago in the corresponding month.
Europe Indexes and Yields
The DAX index decreased by 1.0% to 18,113.82; the CAC-40 index fell by 0.8% to 7,499.98; and the FTSE 100 index fell by 0.4% to 8,136.02.
The yield on 10-year German bonds edged higher to 2.60%; French bonds inched higher to 3.31%; the UK gilts edged higher to 4.25%; and Italian bonds increased to 4.13%.
The euro edged lower to $1.07; the British pound inched lower to $1.264; and the U.S. dollar advanced to 90.38 Swiss cents.
Brent crude increased $0.68 to $87.25 a barrel, and the Dutch TTF natural gas fell by €0.09 to €33.34 per MWh.
Europe Stock Movers
Ryanair Holdings declined 3% to €16.15, despite the budget airline reporting record passenger counts in June.
Sodexo declined 4.4% to €81.90 after the food service provider and facilities management company reported weaker-than-expected revenue in the fiscal third quarter.
J. Sainsbury declined 1.5% to 253.73 pence after the grocery chain operator said that adverse weather had negatively impacted recent volume growth.
Revenue, excluding fuel, in the sixteen-week period ending on June 22 increased by 2.6%, and comparable sales rose by 3.0%.
The company reiterated its commitment to returning £250 million to shareholders after the sale of its core banking business to NatWest.
Additionally, the company plans to complete its £200 million stock repurchase program in the current fiscal year.
Japan's First Quarter GDP Contracted at a Faster Pace, Nikkei Extended Rally to Third Day
The persistent weakness in the yen boosted stock market indexes for the third session in a row.
The Nikkei and the Topix indexes jumped more than 1% in the hopes that export-heavy industries are likely to benefit from the falling yen.
Currency traders prepared for another round of market intervention as the yen drifted to a new 38-year low of 161.63 against the U.S. dollar.
The Finance Ministry and the Bank of Japan have signaled that the rapid decline in the yen is likely to invite market intervention.
Despite the jawboning, the Bank of Japan has still lagged in adjusting its monetary policy and shrinking the wide interest rate differential with the U.S. bonds.
Moreover, the central bank continues to fund elevated levels of government bond purchases, which adds to the already high government deficit.
Investors also reassessed the economic growth outlook after Japan's economy shrank more than initially estimated.
Japan revised its first quarter real economic growth contraction to an annual pace of 2.9% from the preliminary estimate of 1.8% decline, the Cabinet Office said in an unscheduled release on Monday.
The GDP data revision reflected the weaker-than-previously estimated construction orders.
The Cabinet Office also cut growth in the December quarter to an increase of 0.1% from the previous estimate of 0.4%.
Investors overlooked inflation worries after crude oil prices jumped to a two-month high amid rising demand and supply cuts by the OPEC+.
Japan Stock Movers
The Nikkei 225 stock average jumped 1.1% to 40,074.69, and the Topix index advanced 1.2% to 2,856.62.
Retailers were in focus for the second week in a row after J. Front reported better-than-expected net income.
Moreover, Japan is expecting record tourist arrivals this summer as foreigners take advantage of weak currency and increased mobility of Chinese tourists after the end of COVID-19 restrictions.
J. Front rose 1.8% to ¥3,145.0, Takashimaya declined 2% to ¥2,948.0, Seven &I Holdings added 0.7% to ¥1,973.50, and Isetan Mitsukoshi gained 1.8% to ¥3,210.0.
Dai-ichi Life, Daiwa Securities, T&D Holdings, and MS&AD gained between 3% and 4%. amid a rebound in financial services stocks.
Dentsu Group declined 2.1% to ¥ 3,945.0, and Sumitomo Pharma dropped 2.2% to €2.14.
China's Property Sales Decline Slowed and June Auto Sales Eased
Market indexes in Hong Kong rebounded after investors returned from a public holiday and reacted for the first time to the latest updates in manufacturing activities.
The Hang Seng index jumped more than 0.5%, but the indexes in mainland China continued to drift lower.
The Caixin manufacturing purchasing managers' index advanced to 51.8 in June from 51.7 in the previous month, S&P Global reported Monday.
The private survey, which tracked a wider set of small and medium enterprises with significant activities, contrasted with the government data, which showed contraction for the second month in a row.
The Hang Seng index has been under pressure after peaking on May 20 due to a weak policy response, a lack of progress in the revival of the property market, and a rising tide of capital flight.
Moreover, Chinese policymakers are struggling to hold the yuan as the Bank of Japan lets the yen drift to a new 38-year low and avoids expensive market intervention.
The weaker yen is putting additional pressure on the yuan as businesses keep foreign earnings overseas and more capital leaves China for the third year in a row.
China Stock Movers
The CSI 300 index decreased 0.03% to 3,476.93, and the Hang Seng index jumped 0.5% to 17,815.61.
Li Auto jumped 5.3% to HK$74.0 after the leading electric vehicle maker reported a rise in sales in June.
China's automobile sales contracted in June by 2.9% to 1.91 million units, the first monthly decline since January.
However, sales in the first-half increased 2.5% to 9.65 million units, according to the data released by the CPCA.
Chinese property developers edged higher after the decline in home sales eased in June.
Top 100 developers reported home sales declined 16.7% to 438.9 billion yuan, or $60.4 billion, but advanced 36% from May, according to data released by CRIC.
Property transactions improved the most in the top-tier cities of Beijing, Shanghai, Shenzhen, and Guangzhou.
The average price of a new home increased by 0.2% in 100 large cities, slightly weaker than the 0.2% increase in May.
China's new home sales at the top 100 real estate companies in the period between January and June plunged 41.6% from a year ago, the China Index Academy said in a report released on Monday.
Indexes On Wall Street Rest, Job Openings Stay Near 3-year Low In May
Barry Adams
02 Jul, 2024
New York City
Stocks lacked direction in early Tuesday trading, and Treasury yields jumped higher.
The S&P 500 index and the Nasdaq Composite hovered near the flatline amid a lack of domestic catalysts and valuation worries.
The number of job openings rose by 221,000 from the previous month to 8.14 million in May, following a downwardly revised 7.9 million in April, the U.S. Bureau of Labor Statistics reported Tuesday.
The number of job openings is hovering near a three-year low, but openings are still above the pre-pandemic level of 7.2 million, indicating job market conditions are moderating but still tight.
U.S. Indexes and Treasury Yields
The S&P 500 index decreased 0.01% to 5,473.12, and the Nasdaq Composite rose 0.03% to 17,885.52.
The yield on 2-year Treasury notes edged higher to 4.75%, 10-year Treasury notes increased to 4.43%, and 30-year Treasury bonds edged higher to 4.60%.
WTI crude oil increased $0.58 to $83.94 a barrel, and natural gas prices fell 3 cents to $2.46 a thermal unit.
Gold decreased by $3.21 to $2,328.79 an ounce, and silver rose 32 cents to $29.32.
The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 105.81.
U.S. Stock Movers
Tesla jumped 4.8% to $220.01 after the electric vehicle maker reported better-than-expected vehicle sales in the second quartet.
The company said its worldwide global sales increased to 440,000 units and produced 411,000 units.
Atlassin Corp. advanced 4.3% to $185.85 after Piper Sandler upgraded its stock ranking to "overweight," and analyst Rob Owen said the current price is attractive for investors to accumulate stock.
Paramount Global Class B jumped 4% to $10.56 on a CNBC report that the company's streaming division is in merger talks with several potential partners.
Europe Movers: Ryanair, Sainsbury, Sodexo
Inga Muller
02 Jul, 2024
Frankfurt
Election uncertainties in France and the UK overshadowed market trading in the eurozone and London.
The jobless rate in the currency union held steady at a record low in May, and consumer price inflation eased in May.
The DAX index decreased by 1.0% to 18,113.82; the CAC-40 index fell by 0.8% to 7,499.98; and the FTSE 100 index fell by 0.4% to 8,136.02.
The yield on 10-year German bonds edged higher to 2.60%; French bonds inched higher to 3.31%; the UK gilts edged higher to 4.25%; and Italian bonds increased to 4.13%.
Ryanair Holdings declined 3% to €16.15, despite the budget airline reporting record passenger counts in June.
Sodexo declined 4.4% to €81.90 after the food service provider and facilities management company reported weaker-than-expected revenue in the fiscal third quarter.
J. Sainsbury declined 1.5% to 253.73 pence after the grocery chain operator said that adverse weather had negatively impacted recent volume growth.
Revenue, excluding fuel, in the sixteen-week period ending on June 22 increased by 2.6%, and comparable sales rose by 3.0%.
The company reiterated its commitment to returning £250 million to shareholders after the sale of its core banking business to NatWest.
Additionally, the company plans to complete its £200 million stock repurchase program in the current fiscal year.
Election Uncertainties Weigh On European Trading Sentiment
Bridgette Randall
02 Jul, 2024
Frankfurt
European markets traded down amid election uncertainty, a weak economic outlook, and ongoing tensions with Russia.
Benchmark indexes in Paris and London fell ahead of parliamentary elections in the UK on July 4 and the second round of elections in France on July 7.
Market sentiment was weak, and bond yields advanced in the currency union as investors feared that lawmakers in the soon-to-be-appointed new parliaments in France and the UK may struggle to cut spending and lower national debt.
Eurozone Inflation Eased in June
Consumer price inflation in the eurozone eased to 2.5% in June after edging higher to 2.6% in May, Eurostat, the statistical agency of the European Union, reported Tuesday.
Prices for food, tobacco, and alcohol rose at a slower pace of 2.5% compared to 2.6% in the previous month and energy at 0.2% from 0.3%.
Meanwhile, inflation was steady for non-energy industrial goods at 0.7% and for services at 4.1%.
Core inflation, which excludes food, energy, tobacco, and alcohol, was unchanged at 2.9%.
Among the largest economies, inflation eased in Germany to 2.5% from 2.8%, in France to 2.5% from 2.6%, and in Spain to 3.5% from 3.8%, but rose in Italy to 0.9% from 0.8%.
Eurozone Unemployment Rate Remained Steady in June
The jobless rate in the eurozone held steady at the record low of 6.4% in May, matching the rate in the previous month, Eurostat reported Tuesday.
The number of unemployed people increased by 38,000 from the previous month to 11.1 million; however, the jobless rate among those younger than 25 was 14.1%, matching the revised rate in April.
Among the four largest economies in the currency union, Spain recorded the highest rate of 11.7%, followed by France at 7.4%, Italy at 6.8%, and Germany at 3.3%.
The unemployment rate in the eurozone was 6.5% a year ago in the corresponding month.
Europe Indexes and Yields
The DAX index decreased by 1.0% to 18,113.82; the CAC-40 index fell by 0.8% to 7,499.98; and the FTSE 100 index fell by 0.4% to 8,136.02.
The yield on 10-year German bonds edged higher to 2.60%; French bonds inched higher to 3.31%; the UK gilts edged higher to 4.25%; and Italian bonds increased to 4.13%.
The euro edged lower to $1.07; the British pound inched lower to $1.264; and the U.S. dollar advanced to 90.38 Swiss cents.
Brent crude increased $0.68 to $87.25 a barrel, and the Dutch TTF natural gas fell by €0.09 to €33.34 per MWh.
Europe Stock Movers
Ryanair Holdings declined 3% to €16.15, despite the budget airline reporting record passenger counts in June.
Sodexo declined 4.4% to €81.90 after the food service provider and facilities management company reported weaker-than-expected revenue in the fiscal third quarter.
J. Sainsbury declined 1.5% to 253.73 pence after the grocery chain operator said that adverse weather had negatively impacted recent volume growth.
Revenue, excluding fuel, in the sixteen-week period ending on June 22 increased by 2.6%, and comparable sales rose by 3.0%.
The company reiterated its commitment to returning £250 million to shareholders after the sale of its core banking business to NatWest.
Additionally, the company plans to complete its £200 million stock repurchase program in the current fiscal year.
Japan's First Quarter GDP Contracted at a Faster Pace, Nikkei Extended Rally to Third Day
Akira Ito
02 Jul, 2024
Tokyo
The persistent weakness in the yen boosted stock market indexes for the third session in a row.
The Nikkei and the Topix indexes jumped more than 1% in the hopes that export-heavy industries are likely to benefit from the falling yen.
Currency traders prepared for another round of market intervention as the yen drifted to a new 38-year low of 161.63 against the U.S. dollar.
The Finance Ministry and the Bank of Japan have signaled that the rapid decline in the yen is likely to invite market intervention.
Despite the jawboning, the Bank of Japan has still lagged in adjusting its monetary policy and shrinking the wide interest rate differential with the U.S. bonds.
Moreover, the central bank continues to fund elevated levels of government bond purchases, which adds to the already high government deficit.
Investors also reassessed the economic growth outlook after Japan's economy shrank more than initially estimated.
Japan revised its first quarter real economic growth contraction to an annual pace of 2.9% from the preliminary estimate of 1.8% decline, the Cabinet Office said in an unscheduled release on Monday.
The GDP data revision reflected the weaker-than-previously estimated construction orders.
The Cabinet Office also cut growth in the December quarter to an increase of 0.1% from the previous estimate of 0.4%.
Investors overlooked inflation worries after crude oil prices jumped to a two-month high amid rising demand and supply cuts by the OPEC+.
Japan Stock Movers
The Nikkei 225 stock average jumped 1.1% to 40,074.69, and the Topix index advanced 1.2% to 2,856.62.
Retailers were in focus for the second week in a row after J. Front reported better-than-expected net income.
Moreover, Japan is expecting record tourist arrivals this summer as foreigners take advantage of weak currency and increased mobility of Chinese tourists after the end of COVID-19 restrictions.
J. Front rose 1.8% to ¥3,145.0, Takashimaya declined 2% to ¥2,948.0, Seven &I Holdings added 0.7% to ¥1,973.50, and Isetan Mitsukoshi gained 1.8% to ¥3,210.0.
Dai-ichi Life, Daiwa Securities, T&D Holdings, and MS&AD gained between 3% and 4%. amid a rebound in financial services stocks.
Dentsu Group declined 2.1% to ¥ 3,945.0, and Sumitomo Pharma dropped 2.2% to €2.14.
China's Property Sales Decline Slowed, June Auto Sales Turned Down
Li Chen
02 Jul, 2024
Hong Kong
Market indexes in Hong Kong rebounded after investors returned from a public holiday and reacted for the first time to the latest updates in manufacturing activities.
The Hang Seng index jumped more than 0.5%, but the indexes in mainland China continued to drift lower.
The Caixin manufacturing purchasing managers' index advanced to 51.8 in June from 51.7 in the previous month, S&P Global reported Monday.
The private survey, which tracked a wider set of small and medium enterprises with significant activities, contrasted with the government data, which showed contraction for the second month in a row.
The Hang Seng index has been under pressure after peaking on May 20 due to a weak policy response, a lack of progress in the revival of the property market, and a rising tide of capital flight.
Moreover, Chinese policymakers are struggling to hold the yuan as the Bank of Japan lets the yen drift to a new 38-year low and avoids expensive market intervention.
The weaker yen is putting additional pressure on the yuan as businesses keep foreign earnings overseas and more capital leaves China for the third year in a row.
China Stock Movers
The CSI 300 index decreased 0.03% to 3,476.93, and the Hang Seng index jumped 0.5% to 17,815.61.
Li Auto jumped 5.3% to HK$74.0 after the leading electric vehicle maker reported a rise in sales in June.
China's automobile sales contracted in June by 2.9% to 1.91 million units, the first monthly decline since January.
However, sales in the first-half increased 2.5% to 9.65 million units, according to the data released by the CPCA.
Chinese property developers edged higher after the decline in home sales eased in June.
Top 100 developers reported home sales declined 16.7% to 438.9 billion yuan, or $60.4 billion, but advanced 36% from May, according to data released by CRIC.
Property transactions improved the most in the top-tier cities of Beijing, Shanghai, Shenzhen, and Guangzhou.
The average price of a new home increased by 0.2% in 100 large cities, slightly weaker than the 0.2% increase in May.
China's new home sales at the top 100 real estate companies in the period between January and June plunged 41.6% from a year ago, the China Index Academy said in a report released on Monday.
India Movers: CSB Bank, DCX Systems, Eicher Motors, Hero Motocorp, NMDC, Patanjali Foods, TVS Motor, Tata Motors
Arun Goswami
02 Jul, 2024
Mumbai
Vehicle sales in June showed broad market weakness amid weak demand in rural markets for 2-wheelers and a lack of enthusiasm for passenger cars in urban markets.
The Sensex index decreased by 0.1% to 79,384.47, and the Nifty index fell by 0.1% to 24,109.90.
On the Mumbai stock exchange, 215 stocks traded at their 52-week highs, and 7 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 weakened to ₹83.53 against the U.S. dollar.
Patanjali Foods jumped 0.9% to ₹1,713.95, and the company agreed to acquire Patanjali Ayurveda for 1,100 crore, which will be paid in five installments.
Hero Motocorp jumped 0.2% to ₹5,611.25, and the 2-wheeler maker said total sales in June jumped 15% to 5,03,000 units.
In June, domestic vehicle sales rose 16% to 4,91,000, and exports decreased to 12,032 from 14,236 units in the corresponding month a year ago.
Eicher Motors declined 0.7% to ₹4,603.0, and the vehicle maker said Enfield sales in June declined 5% to 73,141 units and exports plunged 27% to 7,024 units.
Tata Motors decreased 1.3% to ₹989.50, and the company said total domestic vehicle sales in June decreased 8% to 74,147 units.
TVS Motor Company advanced 0.5% to ₹2,365.85, and the vehicle maker said total 2-wheeler sales in June increased 6% to 322,000 units.
Domestic sales rose 8% to 256,000 units, and exports declined 3.9% to 76,074 units.
Mahindra & Mahindra decreased 0.1% to ₹2,873.0, after the passenger car market reported June sales rose 23% to 40,022 units.
NMDC declined 1.5% to ₹247.95, and the iron ore mining company said total production eased to 3.37 million tons from 3.48 million tons a year ago.
Total sales decreased to 3.73 million tons from 4.1 million tons a year ago.
The company lowered the price of lump iron ore by ₹500 to ₹5,950 per ton and fine ore by the same amount to ₹5,110 per ton.
CSB Bank advanced 3.5% to ₹388.65, and the company said total deposits increased 22.2% to 29,920 crore and total loans rose 17.8% to 25,099 crore.
DCX Systems soared 15.6% to ₹438.0, and the company won an order for 1,250 crore for electronic modules to be supplied over three years.
Europe Movers: Airbus, Anglo American, French Banks, Petrofac, Valneva
Inga Muller
01 Jul, 2024
Frankfurt
The French election results indicated far-right parties won a smaller than feared number of seats in the first round of the election, raising the prospect of legislative gridlock and holding the increase in government spending.
The DAX index increased by 0.3% to 18,289.86; the CAC-40 index gained by 1.5% to 7,588.25; and the FTSE 100 index rose by 0.3% to 8,189.08.
The yield on 10-year German bonds edged higher to 2.56%; French bonds inched higher to 3.26%; the UK gilts edged higher to 4.22%; and Italian bonds decreased to 4.06%.
French banks rebounded after the announcement of national election results, indicating that the far-right party fell short of an absolute majority in the first round of the national election.
BNP Paribas jumped 3.5% to €61.85, Credit Agricole gained 4.1% to €13.27, and Societe Generale advanced 5% to €23.03.
Airbus SE increased 2.2% to €131.08 after the European airplane maker entered into a bid agreement with Spirit AeroSystems to acquire a business unit supplying products and systems to the company.
Separately, Boeing agreed to acquire the majority of the assets owned by Spirit AeroSystems in an all-stock deal that valued the equity of the company at $4.7 billion, or $37.25 per share.
The total transaction is valued at $8.3 billion, including the total debt of the company.
Valneva soared 5.3% to €3.35 after the European Commission approved marketing of the company's chikungunya vaccine, IXCHIQ, for adults 18 years and older.
Petrofac Ltd. jumped 3.5% to 13.47 pence after the company extended its interest payment moratorium on its secured senior notes to July 25 from June 30.
Anglo American declined 2.1% to 2,450.0 pence after the company suspended its activities in a coal mine in Queensland, Australia, following an underground coal gas ignition incident.
Euro And European Markets Advance After Far Right Party Fell Short of Majority In French Election
Bridgette Randall
01 Jul, 2024
Frankfurt
European markets rebounded and the risk premium for French bonds receded after the far-right party failed to win a majority in the first round of the French parliamentary elections on Sunday.
The CAC-40 index soared 1.5% after Marie Le Pen's National Rally Party won 34% of the vote in the unexpected snap legislative assembly elections.
The National Rally Party won 34.1%, the left-wing New Popular Front Party won 28.1%, and the centrist Renaissance Party coalition controlled by President Emmanuel Macron received 20.8%, according to the preliminary results released by the Interior Ministry.
France is headed for the second round of elections on July 7.
A private survey indicated the eurozone's business activity contracted less than expected in June.
HCOB's final eurozone purchasing managers' index slipped to 45.8 in June, less than the initial estimate of 45.6, S&P Global reported on Monday.
Europe Indexes and Yields
The DAX index increased by 0.3% to 18,289.86; the CAC-40 index gained by 1.5% to 7,588.25; and the FTSE 100 index rose by 0.3% to 8,189.08.
The yield on 10-year German bonds edged higher to 2.56%; French bonds inched higher to 3.26%; the UK gilts edged higher to 4.22%; and Italian bonds decreased to 4.06%.
The euro edged lower to $1.07; the British pound inched lower to $1.266; and the U.S. dollar advanced to 90.12 Swiss cents.
Brent crude increased $0.37 to $85.37 a barrel, and the Dutch TTF natural gas fell by €0.27 to €34.23 per MWh.
Europe Stock Movers
French banks rebounded after the announcement of national election results, indicating that the far-right party fell short of an absolute majority in the first round of the national election.
BNP Paribas jumped 3.5% to €61.85, Credit Agricole gained 4.1% to €13.27, and Societe Generale advanced 5% to €23.03.
Airbus SE increased 2.2% to €131.08 after the European airplane maker entered into a bid agreement with Spirit AeroSystems to acquire a business unit supplying products and systems to the company.
Separately, Boeing agreed to acquire the majority of the assets owned by Spirit AeroSystems in an all-stock deal that valued the equity of the company at $4.7 billion, or $37.25 per share.
The total transaction is valued at $8.3 billion, including the total debt of the company.
Valneva soared 5.3% to €3.35 after the European Commission approved marketing of the company's chikungunya vaccine, IXCHIQ, for adults 18 years and older.
Petrofac Ltd. jumped 3.5% to 13.47 pence after the company extended its interest payment moratorium on its secured senior notes to July 25 from June 30.
Anglo American declined 2.1% to 2,450.0 pence after the company suspended its activities in a coal mine in Queensland, Australia, following an underground coal gas ignition incident.
Japan Indexes Inch Higher After Manufacturing Sentiment Improved
Akira Ito
01 Jul, 2024
Tokyo
Stock market indexes in Tokyo advanced in Monday's trading, the yen continued its slide, and the yield on Japanese government bonds stayed above 1%.
The Nikkei 225 and the Topix indexes advanced after confidence among large companies rose in the second quarter, indicating rising activity.
Market sentiment was positive in Monday's trading, and the Topix index jumped to a new intra-day record high.
However, foreign investors have been lowering their exposure to Japanese stocks amid a faltering pace of improvement in corporate governance, a mixed economic outlook, and the persistent yen weakness.
The Nikkei 225 index rose in the first half by 19%, sharply lower than the 27% increase at the end of the second quarter.
Most foreign investors are anticipating the Nikkei index to face significant headwinds in the third quarter as the Bank of Japan lets the yen sink to a new low in the year.
Tankan Survey Shows Improved Manufacturing Sentiment
The Bank of Japan's Tankan index of sentiment among large manufacturers in the second quarter increased to plus 13 from plus 11 in the previous quarter.
The sentiment among manufacturers of textiles increased to 22 from 11 in the first quarter, petroleum and coal products to 17 from 9, and chemical products to 10 from 2.
Meanwhile, sentiment among makers of iron and steel weakened to zero from 16 in the first quarter, food and beverages to 21 from 24, and production machinery to 11 from 17.
Japan Stock Movers
The Nikkei 225 Stock Average increased 0.1% to 39,631.06, and the Topix index rose 0.5% to 2,824.28.
Tech stocks faced selling pressure in Monday's trading, and Tokyo Electron, Screen Holdings, and Advantest declined around 0.5%.
Softbank gained 1.1% to ¥10,505.0.
Sumitomo Mitsui gained 2.5%, Mitsubishi UFJ jumped 1.1% to ¥1,749.0, and Mizuho Financial increased 1.5% to ¥3,408.0.
J. Front Retailing soared 17% to ¥1,924.50 after the retailer reported a surge in earnings following strong demand from foreign tourists.
Takashimaya advanced 11.4% to ¥3,007.0 in the hopes of higher earnings after the J. Front results.
China's Private and Official Manufacturing Activities Survey Show Diverging Results
Li Chen
01 Jul, 2024
Hong Kong
Asian markets lacked direction after China's official survey showed that the manufacturing sector contracted again and service sector growth slowed to a five-month low in June.
The CSI 300 index declined 0.1% to 3,459.01, and financial markets in Hong Kong were closed to mark the handover of the city to China.
China's manufacturing sector growth shrank for the second month in a row in June, the National Bureau of Statistics reported Monday.
The manufacturing purchasing managers' index was 49.5 in June, matching the rate in May.
The official gauge contracted for the fourth out of six months this year as policymakers struggle to revive business activity amid weak demand.
The private survey conducted by Caixin showed improving activity for the eighth month in a row, and the growth rate reached a three-year high.
The Caixin China General Manufacturing PMI increased to 51.8 in June from 51.7 in May, and new orders rose, but demand from foreign buyers slowed to a six-month low.
The private survey conducted by Caixin includes a larger sample of medium- and small-scale companies in the private sector active in exports.
The Japanese yen drifted to a new 34-year low in Tokyo's trading, raising fears of another round of competitive devaluation in Asia, which could force China, South Korea, and Taiwan to revalue their currencies.
The euro edged higher after the far-right and far-left parties made significant gains in the first round of the French parliamentary elections, solidifying their positions.
The National Rally Party won 34.1%, the left-wing New Popular Front Party won 28.1%, and the centrist Renaissance Party coalition controlled by President Emmanuel Macron received 20.8%, according to the preliminary results released by the Interior Ministry.
France is headed for the second round of elections on July 7.
China Stock Movers
Stocks declined in Shanghai trading, and banks, industrial companies, and electric vehicle makers were among the most active stocks.
BYD declined 1.3% to ¥246.81, ICBC gained 1.6% to ¥5.80, China Vanke jumped 5.6% to ¥7.32, and CATL decreased 2.6% to ¥175.38.
India Movers: Bank of Baroda, Bharti Airtel, Cochin Shipyard, GRP, Godrej Properties, UltraTech Cement, Vodafone Idea
Arun Goswami
01 Jul, 2024
Mumbai
Stocks in Mumbai advanced and extended the previous week's market surge despite the persistent valuation worries, aided by the return of foreign investors in June.
The Sensex index increased by 0.3% to 79,233.49, and the Nifty index rose by 0.2% to 24,067.30.
On the Mumbai stock exchange, 192 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 inched higher to 7.02%, and the Indian rupee strengthened to ₹83.39 against the U.S. dollar.
Vodafone Idea decreased 3.3% to ₹17.90 to ₹17.90 and Bharti Airtel declined 1.8% to ₹1,450.0 after the two leading telecom companies announced increases in monthly tariff plans, following the hikes by Reliance Jio.
Bharti Airtel announced its plans to raise subscription rates by as much as 25%.
Godrej Properties jumped 5.8% to ₹3,290.0, and the residential property developer announced the purchase of two development lots in Pune and Bengaluru.
The company plans to develop the 11-acre leasehold in Pune for residential and commercial projects and the 7-acre land in Bengaluru for residential projects.
Bank of Baroda declined 0.05% to ₹275.25, and the financial service company said it plans to appeal a tax demand for 1,067.82 crore for the financial year 2018.
Orchid Pharma increased 4.7% to ₹1,187.0 and Cipla added 0.2% to ₹1,483.50 after the two companies announced a partnership to market pharmaceuticals to treat urinary tract infections and pneumonia.
GRP Ltd. soared 18.5% to ₹15,250.0, and the company's board announced a 3-to-1 bonus share.
Cochin Shipyard advanced 2.2% to ₹2,282.65, and the company has signed a ₹1,100 crore agreement with the Norway-based Wilson ASA for the design and construction of eight 6,300 TDW Dry Cargo Vessels.
Davangere Sugar increased 2% to ₹8.57, and the company said it plans to begin ethanol production in October using damaged corn crops sourced from various regions of the country.
UltraTech Cement gained 0.3% to ₹11,705.30, and the Adani Group-controlled company has launched an additional 3.35 mtpa clinker production and 1.8 mtpa grinding capacity at its unit in Andhra Pradesh.