Market Update
Foreign Investors Prefer Japan and India to China, BYD Earnings Soar
Arjun Pandit
30 Jan, 2024
Mumbai
Market indexes in Asia diverged as foreign investors rotated out of stocks in China into Japan and India.
The Nikkei index increased 0.2% to 36,089.38 and advanced for the second day in a row this week following the gains on Wall Street in New York.
The unemployment rate in December eased to 2.4% from 2.5% in the previous two months, and investors are looking ahead to the release of retail sales, industrial production, and consumer confidence data later in the week.
Advanced semiconductor-related stocks were among the leading gainers in Tuesday's trading.
Advantest, Disco, and Renesas Electronics gained between 1% and 3%.
Foreign investors have been increasing their holdings in Japan in the hopes that the revamped individual tax-free savings plan will attract more domestic investors to the stock market after three decades of losses.
Foreign investors added about 384 billion yen worth of Japanese stocks, and domestic retail investors sold 185.5 billion yen of Japanese stocks in the period between January 15 and 19, according to the data available from the Tokyo Stock Exchange.
The Nikkei index is trading at about 15 times the estimated earnings of index-member Japanese companies.
Elsewhere in the region, the KOSPI index in Seoul added 0.1% to 2,504.60, and the ASX 200 index in Sydney advanced 0.3% to 7,600.20.
Selling Resumes on Chinese Stock Exchanges
Indexes in mainland China and Hong Kong resumed their slide amid persistent selling by foreign investors and protracted weakness in the property market.
Foreign investors continue to sell China stocks on the worry that the government may not be able to provide sustained reforms and stimulus to support financial markets amid a weakening macroeconomic backdrop and worsening tensions with the U.S.
The weak support from the government and restrained consumer spending growth also stoked fears of weak corporate earnings growth.
China's official estimate of the manufacturing industry is likely to show on Wednesday a contraction for the fourth month in a row in December.
The CSI 300 index in Shanghai declined 1% to 3,270.66, and the Hang Seng index in Hong Kong dropped 2% to 15,762.04.
The Hang Seng index has lost about 7.5% this month, trailing only to the worst start of the year at 10% in 2016.
Market sentiment was dented after BYD, the largest electric vehicle maker in the world, estimated an 86% surge in profit in 2023 but fell short of investor expectations.
BYD fell 5.7% to HK$175.50 and dragged down Li Auto by 1.9% to HK$107.20.
Other leading tech stocks also declined, reflecting weak market sentiment.
Alibaba Group, Tencent, Baidu, and Meituan declined between 2% and 3%.
India Stocks In Holding Pattern, Crude Oil Refiners and Exporters Face Houthi Reality
Stocks in Mumbai lacked direction in early trading as investors digested a fresh batch of earnings and looked forward to the release of the interim budget later in the week.
The Sensex and the Nifty indexes traded in a tight range around the flatline after Bajaj Finance reported a strong rise in earnings but fell short of market expectations.
Aditya Birla Sun Life, ITC, NTPC, and Piramal Enterprises met or exceeded investor expectations.
Tensions in the Red Sea continue to dominate crude oil and refined crude products trading as shippers divert cargo away from the troubled waters.
The Yemen-based Houthi group's missile attack in the Red Sea set on fire an oil cargo ship owned by one of the largest commodities trading firms, Trafigura, on Saturday.
Moreover, India's diesel shipments to Europe are facing difficulties because all shipments travel through the Red Sea lanes.
European countries are relying on diesel shipments from India and Saudi Arabia to meet their daily shortfall of 650,000 barrels.
India's diesel exports are taking a hit because of the higher freight costs and longer delivery time to the region, and European customers are switching supplies from the U.S.
At the same time, Middle East suppliers are forced to divert shipments around South Africa to Europe, lengthening delivery times by two weeks and increasing freight costs by at least 50%.
Facing higher shipping costs to Europe, Middle East crude oil suppliers are offering discounts to refiners in India and China.
The largest diesel exporter, Reliance Industries, declined 1.5%, but ONGC, Mangalore Refinery, Hindustan Petroleum, and Bharat Petroleum jumped between 2% and 4%.
The Sensex index decreased 57.84 points to 71,883.73, and the Nifty index rose 22.60 points to 21,760.20.
On the Mumbai stock exchange, 281 stocks traded at their 52-week highs and 9 stocks traded at their 52-week lows.
Bajaj Finance declined 4.4% to ₹6,892.50 after the financial services company reported a surge in quarterly profit and revenue but missed investor expectations.
Net interest income in the December quarter jumped 29% to 7,655 crore, and net profit jumped 22% to 3,639 crore from a year ago, respectively.
India Movers: AB Sun Life, Bajaj Finance, ITC, Marico, NTPC, Newgen Software, Piramal Enterprises, Vodafone Idea
Arun Goswami
30 Jan, 2024
Mumbai
Stocks in Mumbai struggled to hold gains in early trading following a surge of more than 1% in the previous session.
The Sensex index decreased 130.45 points to 71,811.10, and the Nifty index declined 15.0 points to 21,722.60.
On the Mumbai stock exchange, 275 stocks traded at their 52-week highs and 8 stocks traded at their 52-week lows.
ITC Ltd. decreased 1.5% to ₹448.70 after the tobacco product maker reported quarterly results.
Consolidated net profit in the December quarter rose to ₹5,335.2 crore from ₹5,006.6 crore a year ago.
Bajaj Finance jumped 1.6% to ₹7,200.0 after the financial services company reported a surge in quarterly profit and revenue.
Net interest income in the December quarter jumped 29% to 7,655 crore, and net profit jumped 22% to 3,639 crore from a year ago, respectively.
Vodafone Idea fell 1% to ₹14.75 after the struggling telecom carrier reported a smaller loss compared to a year ago.
Net loss in the December quarter shrank 12% to 6,985 crore from 7,990 crore a year ago.
NTPC declined 0.8% to ₹321.85 after the power producer reported mixed quarterly results.
Revenue in the December quarter declined 4% to 42,820 crore, but net income rose 7.3% to 5,209 crore from a year ago, respectively.
Marico Ltd. increased 1% to ₹521.85 after the company reported mixed quarterly results.
Revenue in the December quarter declined 1.9% to 2,422 crore, but net profit rose 16% to 386 crore from a year ago, respectively.
Piramal Enterprises rose 0.8% to ₹891.50, and the company swung to a consolidated loss in its latest quarter.
The financial services provider in the December quarter swung to a loss of ₹2,378 crore from a profit of ₹3,545.4 crore in the corresponding period in the previous year.
Aditya Birla Sun Life AMC increased 3.4% to ₹493.75 after the company reported a rise in its quarterly profit.
Consolidated profit in the December quarter soared 26% from a year ago to ₹209.3 crore.
Newgen Software advanced 0.02% to ₹845.25 after the company's subsidiary won a seven-year contract to develop and support the digital apps for a customer in Singapore.
Global Markets Hover Near Recent Highs as Investors Await Mega-cap Tech Earnings
Barry Adams
29 Jan, 2024
New York City
U.S. stocks traded around flatline in Monday's session ahead of the Federal Reserve's policy announcement and a flood of earnings from mega-cap companies.
The S&P 500 index and the Nasdaq Composite gained 0.2% and 0.4%, respectively, and extended the previous week's gains.
The resilient U.S. economy and strong but not-too-hot labor market conditions are giving more room to the Federal Reserve to cool inflation to its 2% targe rate.
Last week, economic updates showed that the U.S. economy accelerated its growth in 2023, despite widespread predictions of an imminent slowdown at the beginning of the year.
The U.S. GDP expanded at a faster pace of 2.5% from 1.9% in the previous year, powered by sustained consumer spending.
Moreover, new home sales rose in December and advanced in 2023, despite elevated home prices and rising interest rates.
Investors are widely anticipating the Federal Reserve holding its key lending rates at the end of its two-day meeting on Wednesday.
Moreover, investors are looking forward to the release of non-farm payrolls and JOLT reports this week.
On the earnings front, about 800 companies are expected to release earnings this week.
Earnings season enters its third week, and Microsoft, Alphabet, Apple, AMD, MasterCard, and ExxonMobil are among the leading companies scheduled to release earnings in the U.S.
U.S. Indexes and Yields
The S&P 500 index increased 0.2% to 4,900.42, and the Nasdaq Composite added 0.4% to 15,512.90.
The yield on 2-year Treasury notes increased to 4.33%. 10-year Treasury notes declined to 4.10%, and 30-year Treasury bonds edged down to 4.34%.
WTI crude oil decreased $1.21 to $76.80 a barrel, and natural gas prices decreased 9 cents to $2.08 a thermal unit.
Gold increased by $10.13 to $2,028.45 an ounce and extended the previous week's gains after the U.S. dollar drifted slightly lower in international trading.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.63.
U.S. Stock Movers
iRobot plunged 7% to $160.81 and Amazon.com and the company agreed to terminate their merger plan after the deal faced several regulatory hurdles in Europe.
The maker of Roomba also announced its plan to lay off 350 employees, about 31% of company's staff.
Amazon.com increased 1.1% to $160.81 and will pay a previously agreed $94 million deal termination fee.
The company also announced preliminary full-year 2023 revenue of $891 million, a decline of 25% from a year ago, a GAAP operating loss of between $265 and $285 million, and a non-GAAP operating loss of approximately $200 million.
Flutter, the parent company of FanDuel is expected to list its stock on the New York Stock Exchange on Monday.
DraftKings and the company are the two dominant players in online sports betting in the U.S.
The company will keep its listing on the London Stock Exchange and remain a member of the FTSE 100 index.
European Markets Flatlined
European markets struggled in Monday's trading as investors prepared for monetary policy decisions from central banks in the U.S. and the U.K.
Market indexes in Frankfurt, Paris, and London traded around the flatline as earnings season enters the third week.
Investors are also awaiting the release of interest rate decisions from the U.S. Federal Reserve on Wednesday and the Bank of England on Thursday.
Both central banks are widely anticipated to hold rates steady and reiterate their commitment to keep interest rates restrictive to bring inflation down to the target level of 2%.
On Thursday, the European Central Bank left its key lending rates unrevised and signaled that interest rates will remain restrictive as long as necessary, without giving any clarity if and when rates may be cut.
Moreover, investors also reviewed the faster-than-expected economic growth in the U.S. in the fourth quarter while inflation slowed.
In Friday's trading, market indexes in New York lacked direction after an alternative measure of inflation in the U.S. showed a decline in December.
Closer to home, fourth quarter GDP rates for the Euro Area, Germany, France, Spain, and Italy are awaited by investors later in the week.
In addition, inflation figures from the Euro Area, Spain, France, and Germany are scheduled to be released this week.
Sweden's GDP Contracted In 2023
The Swedish economy expanded by 0.1% in the three months to December 2023, while reversing a 0.3% contraction in the previous quarter, according to a preliminary estimate released by Statistics Sweden on Monday.
Compared to the same period last year, the economy stagnated after shrinking by 0.8% in the second quarter and 0.3% in the third quarter.
For the whole year, the GDP shrank by 0.3%, the statistical agency noted.
“The last three months of 2023 saw relatively minor movements in overall economic activity, with weaker figures for domestic use weighed up by a strengthening of net exports,” highlighted Mattias Kain Wyatt, an economist at Statistics Sweden.
Europe Indexes and Yields
The DAX index decreased 0.1% to 16,941.74, the CAC-40 index rose 0.1% to 7,640.81, and the FTSE 100 index inched lower by 0.03% to 7,632.74.
The yield on 10-year German bonds edged down to 2.23%; French bonds inched lower to 2.72%; the UK gilts edged lower to 3.91%; and Italian bonds inched lower to 3.75%.
The euro edged lower to $1.082, the British pound inched higher to $1.272, and the U.S. dollar gained to 86.20 Swiss cents.
Brent crude decreased $1.01 to $81.92 a barrel, and the Dutch TTF natural gas increased by €0.17 to €28.27 per MWh.
Europe Stock Movers
Ryanair Holdings declined 1.8% to €18.17 after the deep discount airline trimmed its profit estimate for the fiscal year ending in March.
Holcim AG increased 3.2% to CHF 66.18 after the Swiss construction material company announced plans to spin off its North American business through a listing in New York.
The North American operation generated $11 billion in revenue and earnings before interest and taxes of $2 billion in 2023.
Post-spinoff, Holcim revenue in 2023 is estimated at $17 billion, with $2 billion of free cash flow.
Holcim North America employs about 16,000 people across 850 sites, and the company plans to generate $20 billion in revenue by 2030.
Ferrexpo decreased 3.1% to 83.19 pence after a court of appeals in Ukraine affirmed claims of $125 million against the iron ore pellet producer.
Philips NV plunged 6.5% to €19.70 after the Dutch medical device maker said it would halt new sales of sleep machines following a series of recalls.
Group sales in fiscal year 2023 increased 7% to €18.2 billion in 2023 and advanced 3% to €5.1 billion in the fourth quarter.
Income from operations swung to a loss of €115 million in 2023 and a profit of €24 million in the fourth quarter, including charges of €363 million connected with the Respironics consent decree.
The company reached a settlement with the U.S. Food and Drug Administration regarding a mass recall of its Respironics ventilators.
The medical device maker retained its 85-cent stock dividend for shareholders.
Philips expects to deliver 3% to 5% comparable sales growth and an adjusted EBITA margin of 11% to 11.5% in 2024.
Wacker Chemie declined 1.1% to €99.34 after the chemical company reported a 60% decline in its core earnings in 2023.
Bayer AG declined 4.5% to €30.76 after the company was ordered to pay $2.25 billion by a Pennsylvania court to a plaintiff who developed cancer due to exposure to the company's Roundup weed killer.
The company plans to appeal the decision.
Eutelsat Communications SA dropped 14.6% to €3.51 after the company lowered its annual revenue outlook.
The company revised its fiscal 2024 revenue in a range of €1.25 billion to €1.3 billion from its previous estimated range of €1.32 billion to €1.42 billion.
The company lowered its adjusted EBITDA in a range of €650 million to €680 million from its previous range between €725 million and €825 million.
The company attributed the revenue shortfall to the delay in ground network construction and the shift in revenue mix towards the sale of user terminals with lower margins.
Japan and India Markets Pull Ahead, China Markets Diverge
Across Asia, markets lacked direction, and investors looked ahead to the release of key economic data in the region.
Investors are also awaiting the release of interest rate decisions from the U.S. Federal Reserve on Wednesday and the Bank of England on Thursday.
Both central banks are widely anticipated to hold rates steady and reiterate their commitment to keep interest rates restrictive to bring inflation down to the target level of 2%.
In Friday's trading, market indexes in New York lacked direction after an alternative measure of inflation showed a decline in December.
Core Personal Consumption Expenditure, which excludes food and energy, rose to 0.2% from 0.1% on a monthly basis, and the annual core rate fell to 2.9% from 3.2%, the lowest level since March 2021.
A Broad Rally Lifts the Nikkei Index in Tokyo
The Nikkei index advanced more than 0.8% to 36,027.74 in a broad rally, and investors are awaiting the release of retail sales, unemployment, industrial production, and consumer confidence data in the coming week.
Financial, commodities importers, and vehicle and electronics exporters were among the most actively traded stocks in Tokyo.
Mitsubishi UFJ, Sumitomo Mitsui, Mizuho Financial, and Inpex Corp. gained between 2% and 4%.
Toyota Motor, Sony Group, and Honda Motor added between 2% and 3%.
China Announces Additional Measures; Evergrande Halted After Liquidation Order
Market indexes Shanghai eased 0.6% to 3,315.49 after China's market regulator placed a ban on lending restricted securities listed on mainland exchanges.
The latest measure adds to several steps taken by the government and the central bank to stabilize financial markets after indexes lost more than 30% in the last three years.
The Hang Seng index jumped 0.5% to 16,026.49 and extended last week's gain of 4.2%, and tech stocks were among the most active stocks.
Alibaba Group, JD.com, and Baidu gained about 3%, but Tencent declined 1%.
Homebuilders advanced after Guangzhou city regulators lifted the ban on the purchase of large homes.
Longfor and China Resources Land advanced 0.6%.
China Evergrande plunged 21% to 16 cents after a court in Hong Kong ordered the company's liquidation after the mainland real estate developer failed to present a credible restructuring plan and repay creditors.
Healthcare stocks were under pressure after U.S. lawmakers debated additional sanctions on Chinese biotech companies for collaborating with PLA-linked entities.
WuXi Apptec, Zhongji Innolight, and TCL Zhonghuan dropped between 9% and 12%.
India Stocks Soared Ahead of Interim Budget
Benchmark indexes in Mumbai lacked direction in Monday's trading as investors looked ahead to a busy week of economic data and corporate earnings.
Finance Minister Nirmala Sitharaman is scheduled to present the interim budget to the Lok Sabha on February 1.
Moreover, investors are looking ahead to the release of December automobile sales, infrastructure output, and fiscal deficit updates.
The Sensex index increased 639.59 points to 71,340.26, and the Nifty index rose 185.90 points to 21,538.50.
On the Mumbai stock exchange, 258 stocks traded at their 52-week highs and 9 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds increased to 7.17%, and the Indian rupee held steady at ₹83.13 against the U.S. dollar.
HDFC Bank increased 1.2% to ₹1,453.35 after the Reserve Bank of India permitted Life Insurance Corporation to increase its stake in the bank from 5.19% to up to 9.99%.
Elsewhere in the region, the KOSPI index in Seoul added 1.1% to 2,507.82, and the ASX 200 index in Sydney jumped 0.3% to 7,578.40.
U.S. Averages Hover Near Record Highs, Earnings Season Gathers Momentum
Barry Adams
29 Jan, 2024
New York City
U.S. stocks traded slightly higher in Monday's session ahead of the Federal Reserve's policy announcement and a flood of earnings from mega-cap companies.
The S&P 500 index and the Nasdaq Composite edged higher and extended the previous week's gains.
The resilient U.S. economy and strong but not-too-hot labor market conditions are giving more room to the Federal Reserve to cool inflation to its 2% targe rate.
Last week, economic updates showed that the U.S. economy accelerated its growth in 2023, despite widespread predictions of an imminent slowdown at the beginning of the year.
The U.S. GDP expanded at a faster pace of 2.5% from 1.9% in the previous year, powered by sustained consumer spending.
Moreover, new home sales rose in December and advanced in 2023, despite elevated home prices and rising interest rates.
Investors are widely anticipating the Federal Reserve holding its key lending rates at the end of its two-day meeting on Wednesday.
Moreover, investors are looking forward to the release of non-farm payrolls and JOLT reports this week.
On the earnings front, about 800 companies are expected to release earnings this week.
Earnings season enters its third week, and Microsoft, Alphabet, Apple, AMD, MasterCard, and ExxonMobil are among the leading companies scheduled to release earnings in the U.S.
U.S. Indexes and Yields
The S&P 500 index increased 0.01% to 4,916.23, and the Nasdaq Composite added 0.1% to 15,672.82.
The yield on 2-year Treasury notes increased to 4.33%. 10-year Treasury notes declined to 4.10%, and 30-year Treasury bonds edged down to 4.34%.
WTI crude oil decreased $0.31 to $77.71 a barrel, and natural gas prices decreased 5 cents to $2.12 a thermal unit.
Gold increased by $10.93 to $2,029.31 an ounce and extended the previous week's gains after the U.S. dollar drifted slightly lower in international trading.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.63.
U.S. Stock Movers
Holcim AG increased 3.2% to CHF 66.18 after the Swiss construction material company announced plans to spin off its North American business through a listing in New York.
The North American operation generated $11 billion in revenue and earnings before interest and taxes of $2 billion in 2023.
Post-spinoff, Holcim revenue in 2023 is estimated at $17 billion, with $2 billion of free cash flow.
Holcim North America employs about 16,000 people across 850 sites, and the company plans to generate $20 billion in revenue by 2030.
Philips NV plunged 6.5% to €19.70 after the Dutch medical device maker said it would halt new sales of sleep machines following a series of recalls.
Group sales in fiscal year 2023 increased 7% to €18.2 billion in 2023 and advanced 3% to €5.1 billion in the fourth quarter.
Income from operations swung to a loss of €115 million in 2023 and a profit of €24 million in the fourth quarter, including charges of €363 million connected with the Respironics consent decree.
The company reached a settlement with the U.S. Food and Drug Administration regarding a mass recall of its Respironics products, including ventilators and breathing devices, in 2021.
Philips may take as long as five to seven years to meet the regulatory requirements before the company is able to sell new products in the U.S.
The company is still facing an investigation by the U.S. Department of Justice into how it handled the mass recall and numerous lawsuits from patients claiming their health has suffered due to the use of sleep apnea and breathing devices.
The medical device maker retained its 85-cent stock dividend for shareholders.
Philips expects to deliver 3% to 5% comparable sales growth and an adjusted EBITA margin of 11% to 11.5% in 2024.
Flutter, the parent company of FanDuel is expected to list its stock on the New York Stock Exchange on Monday.
DraftKings and the company are the two dominant players in online sports betting in the U.S.
The company will keep its listing on the London Stock Exchange and remain a member of the FTSE 100 index.
Europe Movers: Bayer, Eutelsat, Ferrexpo, Holcim, Philips, Ryanair, Wacker Chemie
Inga Muller
29 Jan, 2024
Frankfurt
European markets hugged the flatline ahead of the rate decisions from the Bank of England and the U.S. Federal Reserve.
The DAX index decreased 0.5% to 16,874.0, the CAC-40 index rose 0.01% to 7,634.92, and the FTSE 100 index inched higher by 0.1% to 7,642.72.
The yield on 10-year German bonds edged down to 2.23%; French bonds inched lower to 2.72%; the UK gilts edged lower to 3.91%; and Italian bonds inched lower to 3.75%.
Ryanair Holdings declined 1.8% to €18.17 after the deep discount airline trimmed its profit estimate for the fiscal year ending in March.
Holcim AG increased 3.2% to CHF 66.18 after a Swiss construction material company announced plans to spin off its North American business through a listing in New York.
The North American operation generated $11 billion in revenue and earnings before interest and taxes of $2 billion in 2023.
Post-spinoff, Holcim revenue in 2023 is estimated at $17 billion, with $2 billion of free cash flow.
Ferrexpo decreased 3.1% to 83.19 pence after a court of appeals in Ukraine affirmed claims of $125 million against the iron ore pellet producer.
Philips NV plunged 6.5% to €19.70 after the Dutch medical device maker said it would halt new sales of sleep machines following a series of recalls.
Group sales in fiscal year 2023 increased 7% to €18.2 billion in 2023 and advanced 3% to €5.1 billion in the fourth quarter.
Income from operations swung to a loss of €115 million in 2023 and a profit of €24 million in the fourth quarter, including charges of €363 million connected with the Respironics consent decree.
The company reached a settlement with the U.S. Food and Drug Administration regarding a mass recall of its Respironics products, including ventilators and breathing devices, in 2021.
Philips may take as long as five to seven years to meet the regulatory requirements before the company is able to sell new products in the U.S.
The company is still facing an investigation by the U.S. Department of Justice into how it handled the mass recall and numerous lawsuits from patients claiming their health has suffered due to the use of sleep apnea and breathing devices.
The medical device maker retained its 85-cent stock dividend for shareholders.
Philips expects to deliver 3% to 5% comparable sales growth and an adjusted EBITA margin of 11% to 11.5% in 2024.
Wacker Chemie declined 1.1% to €99.34 after the chemical company reported a 60% decline in its core earnings in 2023.
Bayer AG declined 4.5% to €30.76 after the company was ordered to pay $2.25 billion by a Pennsylvania court to a plaintiff who developed cancer due to exposure to the company's Roundup weed killer.
The company plans to appeal the decision.
Eutelsat Communications SA dropped 14.6% to €3.51 after the company lowered its annual revenue outlook.
The company revised its fiscal 2024 revenue in a range of €1.25 billion to €1.3 billion from its previous estimated range of €1.32 billion to €1.42 billion.
The company lowered its adjusted EBITDA in a range of €650 million to €680 million from its previous range between €725 million and €825 million.
The company attributed the revenue shortfall to the delay in ground network construction and the shift in revenue mix towards the sale of user terminals with lower margins.
European Markets Rested, Swedish GDP Contracted
Bridgette Randall
29 Jan, 2024
Frankfurt
European markets advanced in Monday's trading as investors prepared for monetary policy decisions from central banks in the U.S. and the U.K.
Market indexes in Frankfurt, Paris, and London traded around the flatline as earnings season enters the third week.
Investors are also awaiting the release of interest rate decisions from the U.S. Federal Reserve on Wednesday and the Bank of England on Thursday.
Both central banks are widely anticipated to hold rates steady and reiterate their commitment to keep interest rates restrictive to bring inflation down to the target level of 2%.
On Thursday, the European Central Bank left its key lending rates unrevised and signaled that interest rates will remain restrictive as long as necessary, without giving any clarity if and when rates may be cut.
Moreover, investors also reviewed the faster-than-expected economic growth in the U.S. in the fourth quarter while inflation slowed.
In Friday's trading, market indexes in New York lacked direction after an alternative measure of inflation showed a decline in December.
Core Personal Consumption Expenditure, which excludes food and energy, rose to 0.2% from 0.1% on a monthly basis, and the annual core rate fell to 2.9% from 3.2%, the lowest level since March 2021.
Closer to home, fourth quarter GDP rates for the Euro Area, Germany, France, Spain, and Italy are awaited by investors later in the week.
In addition, inflation figures from the Euro Area, Spain, France, and Germany are scheduled to be released this week.
Sweden's GDP Contracted In 2023
The Swedish economy expanded by 0.1% in the three months to December 2023, while reversing a 0.3% contraction in the previous quarter, according to a preliminary estimate released by Statistics Sweden on Monday.
Compared to the same period last year, the economy stagnated after shrinking by 0.8% in the second quarter and 0.3% in the third quarter.
For the whole year, the GDP shrank by 0.3%, the statistical agency noted.
“The last three months of 2023 saw relatively minor movements in overall economic activity, with weaker figures for domestic use weighed up by a strengthening of net exports,” highlighted Mattias Kain Wyatt, an economist at Statistics Sweden.
Europe Indexes and Yields
The DAX index decreased 0.5% to 16,874.0, the CAC-40 index rose 0.01% to 7,634.92, and the FTSE 100 index inched higher by 0.1% to 7,642.72.
The yield on 10-year German bonds edged down to 2.23%; French bonds inched lower to 2.72%; the UK gilts edged lower to 3.91%; and Italian bonds inched lower to 3.75%.
The euro edged lower to $1.082, the British pound inched higher to $1.272, and the U.S. dollar gained to 86.20 Swiss cents.
Brent crude decreased $0.23 to $82.72 a barrel, and the Dutch TTF natural gas increased by €0.59 to €28.67 per MWh.
Europe Stock Movers
Ryanair Holdings declined 1.8% to €18.17 after the deep discount airline trimmed its profit estimate for the fiscal year ending in March.
Holcim AG increased 3.2% to CHF 66.18 after a Swiss construction material company announced plans to spin off its North American business through a listing in New York.
The North American operation generated $11 billion in revenue and earnings before interest and taxes of $2 billion in 2023.
Post-spinoff, Holcim revenue in 2023 is estimated at $17 billion, with $2 billion of free cash flow.
Ferrexpo decreased 3.1% to 83.19 pence after a court of appeals in Ukraine affirmed claims of $125 million against the iron ore pellet producer.
Philips NV plunged 6.5% to €19.70 after the Dutch medical device maker said it would halt new sales of sleep machines following a series of recalls.
Group sales in fiscal year 2023 increased 7% to €18.2 billion in 2023 and advanced 3% to €5.1 billion in the fourth quarter.
Income from operations swung to a loss of €115 million in 2023 and a profit of €24 million in the fourth quarter, including charges of €363 million connected with the Respironics consent decree.
The company reached a settlement with the U.S. Food and Drug Administration regarding a mass recall of its Respironics ventilators.
The medical device maker retained its 85-cent stock dividend for shareholders.
Philips expects to deliver 3% to 5% comparable sales growth and an adjusted EBITA margin of 11% to 11.5% in 2024.
Wacker Chemie declined 1.1% to €99.34 after the chemical company reported a 60% decline in its core earnings in 2023.
Bayer AG declined 4.5% to €30.76 after the company was ordered to pay $2.25 billion by a Pennsylvania court to a plaintiff who developed cancer due to exposure to the company's Roundup weed killer.
The company plans to appeal the decision.
Eutelsat Communications SA dropped 14.6% to €3.51 after the company lowered its annual revenue outlook.
The company revised its fiscal 2024 revenue in a range of €1.25 billion to €1.3 billion from its previous estimated range of €1.32 billion to €1.42 billion.
The company lowered its adjusted EBITDA in a range of €650 million to €680 million from its previous range between €725 million and €825 million.
The company attributed the revenue shortfall to the delay in ground network construction and the shift in revenue mix towards the sale of user terminals with lower margins.
Nikkei Advanced 1%, Hong Kong Court Ordered China Evergrande Liquidation
Arjun Pandit
29 Jan, 2024
Mumbai
Across Asia, markets lacked direction, and investors looked ahead to the release of key economic data in the region.
Investors are also awaiting the release of interest rate decisions from the U.S. Federal Reserve on Wednesday and the Bank of England on Thursday.
Both central banks are widely anticipated to hold rates steady and reiterate their commitment to keep interest rates restrictive to bring inflation down to the target level of 2%.
In Friday's trading, market indexes in New York lacked direction after an alternative measure of inflation showed a decline in December.
Core Personal Consumption Expenditure, which excludes food and energy, rose to 0.2% from 0.1% on a monthly basis, and the annual core rate fell to 2.9% from 3.2%, the lowest level since March 2021.
A Broad Rally Lifts the Nikkei Index in Tokyo
The Nikkei index advanced more than 0.8% to 36,027.74 in a broad rally, and investors are awaiting the release of retail sales, unemployment, industrial production, and consumer confidence data in the coming week.
Financial, commodities importers, and vehicle and electronics exporters were among the most actively traded stocks in Tokyo.
Mitsubishi UFJ, Sumitomo Mitsui, Mizuho Financial, and Inpex Corp. gained between 2% and 4%.
Toyota Motor, Sony Group, and Honda Motor added between 2% and 3%.
China Announces Additional Measures; HK Court Orders Evergrande Liquidation
Market indexes Shanghai eased 0.6% to 3,315.49 after China's market regulator placed a ban on lending restricted securities listed on mainland exchanges.
The latest measure adds to several steps taken by the government and the central bank to stabilize financial markets after indexes lost more than 30% in the last three years.
The Hang Seng index jumped 0.5% to 16,026.49 and extended last week's gain of 4.2%, and tech stocks were among the most active stocks.
Alibaba Group, JD.com, and Baidu gained about 3%, but Tencent declined 1%.
Homebuilders advanced after Guangzhou city regulators lifted the ban on the purchase of large homes.
Longfor and China Resources Land advanced 0.6%.
China Evergrande plunged 21% to 16 cents after a court in Hong Kong ordered the company's liquidation after the mainland real estate developer failed to present a credible restructuring plan and repay creditors.
Healthcare stocks were under pressure after U.S. lawmakers debated additional sanctions on Chinese biotech companies for collaborating with PLA-linked entities.
WuXi Apptec, Zhongji Innolight, and TCL Zhonghuan dropped between 9% and 12%.
India Stocks Advanced Ahead of Interim Budget
Benchmark indexes in Mumbai lacked direction in Monday's trading as investors looked ahead to a busy week of economic data and corporate earnings.
Finance Minister Nirmala Sitharaman is scheduled to present the interim budget to the Lok Sabha on February 1.
Moreover, investors are looking ahead to the release of December automobile sales, infrastructure output, and fiscal deficit updates.
The Sensex index increased 639.59 points to 71,340.26, and the Nifty index rose 185.90 points to 21,538.50.
On the Mumbai stock exchange, 258 stocks traded at their 52-week highs and 9 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds increased to 7.17%, and the Indian rupee held steady at ₹83.13 against the U.S. dollar.
HDFC Bank increased 1.2% to ₹1,453.35 after the Reserve Bank of India permitted Life Insurance Corporation to increase its stake in the bank from 5.19% to up to 9.99%.
Elsewhere in the region, the KOSPI index in Seoul added 1.1% to 2,507.82, and the ASX 200 index in Sydney jumped 0.3% to 7,578.40.
India Movers: Adani Power, HDFC Bank, ONGC, SBI Cards, SJVN, Shriram Finance
Arun Goswami
29 Jan, 2024
Mumbai
Stocks in Mumbai advanced ahead of the release of vehicle sales, the fiscal deficit, and the release of the interim budget.
The Sensex index increased 639.59 points to 71,340.26, and the Nifty index rose 185.90 points to 21,538.50.
On the Mumbai stock exchange, 258 stocks traded at their 52-week highs and 9 stocks traded at their 52-week lows.
HDFC Bank increased 1.2% to ₹1,453.35 after the Reserve Bank of India permitted Life Insurance Corporation to increase its stake in the bank from 5.19% to up to 9.99%.
SBI Cards and Payment Services dropped 7.2% to ₹713.50 after two brokerage firms lowered their views on the stock, citing the "weak" quality of the company's loan portfolio.
Adani Power jumped 3.8% to ₹564.0 after the company reported a surge in quarterly revenue and earnings.
Consolidated revenue in the December quarter soared 67.3%. ₹12,991 crore, and net profit advanced to ₹2,738 crore from ₹8.8 crore a year ago.
ONGC jumped 4.2% to ₹244.0 after Brent crude oil prices advanced in international trading by 1% to $84.38 a barrel.
Moreover, oil supplies from Russia are expected to fall sharply after several refineries are undergoing repairs following drone attacks last week.
In addition, a missile launched by Yemen-based Houthi group in the Red Sea struck an oil tanker controlled by the commodities trader Trafigura on Saturday.
SJVN Ltd. jumped 12.9% to ₹130.80 after the company was deemed the lowest bidder in an auction conducted by Gujarat Urja Vikas Nigam to build a 100 MW power plant.
Shriram Finance jumped 3.5% to ₹2,386.15 after the company reported muted quarterly results.
Net income in the December quarter rose 15% to ₹5,093.9 crore, and net profit increased 2.3% to ₹1,818.3 crore from a year ago.
Stocks on Wall Street Turn Lower, Inflation Measure Shows Cooling Trend
Barry Adams
26 Jan, 2024
New York City
Stocks on Wall Street declined in early trading, and investors reviewed another batch of earnings and inflation updates.
Benchmark indexes lacked direction, and semiconductor stocks dropped after Intel estimated sharply lower-than-expected revenue in the current quarter.
Moreover, market sentiment was dented after Visa Inc. said U.S. transaction volume growth is slowing and American Express said provision for credit losses soared 40% to $1.4 billion at the end of the fourth quarter.
On the economic front, a closely watched alternative measure of inflation eased, as expected by market watchers.
U.S. Personal Spending Rises, Inflation Measured by PCE Prices Slowed
Personal income increased $60.0 billion, or 0.3%, from the previous month in December, according to estimates released today by the Bureau of Economic Analysis.
Disposable personal income, personal income less personal current taxes, increased $51.8 billion, or 0.3%, and personal consumption expenditures increased $133.9 billion, or 0.7%, from the previous month, respectively.
The Personal Consumption Expenditure Index increased by 0.2% in December from the previous month and was steady at 2.6% on an annual basis.
Prices for goods increased less than 0.1%, and prices for services increased 3.9%.
Food prices increased 1.5% and energy prices decreased 2.2% from the previous month, respectively.
Core PCE, which excludes food and energy, rose to 0.2% from 0.1% on a monthly basis, and the annual core rate fell to 2.9% from 3.2%, the lowest level since March 2021.
The core rate of inflation declined for the eleventh month in a row.
U.S. Indexes and Yields
The S&P 500 index increased 0.04% to 4,927.73, and the Nasdaq Composite decreased 0.2% to 15,651.03.
The yield on 2-year Treasury notes increased to 4.36%. 10-year Treasury notes declined to 4.14%, and 30-year Treasury bonds edged down to 4.38%.
WTI crude oil increased $0.53 to $75.66 a barrel, and natural gas prices increased 18 cents to $2.82 a thermal unit.
Gold increased by $1.37 to $2,013.92 an ounce and extended this week's gains after the U.S. dollar drifted slightly lower in international trading.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.27.
U.S. Stock Movers
Intel Corp. declined 10.5% to $44.36 after the advanced chipmaker reported weaker-than-expected quarterly results and issued a cautious outlook.
Revenue in the December quarter rose 10% to $15.4 billion from $14.0 billion, and the company swung to a net income of $2.7 billion from a loss of $664 million, and diluted earnings per share were 63 cents compared to a loss of 16 cents.
For the full year 2023, revenue increased 14% to $54.2 billion. $63.1 billion, net income plunged to $1.7 billion from $8.0 billion, and diluted earnings per share dropped to 40 cents from $1.94 a year ago.
The company guided first-quarter 2024 revenue to range between $12.2 billion and $13.2 billion, with a diluted loss per share of 25 cents and a gross margin of 40.7%.
KLA Corp. fell 3.9% to $616.96 after the semiconductor equipment company reported better-than-expected quarterly results.
Revenue in the fiscal second quarter ending in December dropped to $2.48 billion from $2.98 billion, net income plunged to $583 million from $979 million, and diluted earnings per share fell to $4.28 from $6.89 a year ago.
Visa Inc. dropped 2.7% to $265.30 after the payment processing platform reported strong quarterly results driven by robust consumer spending; however, the company signaled weakening U.S. spending volume.
Revenue in the fiscal 2024 first quarter increased 9% to $8.6 billion, net income rose 17% to $4.9 billion from $4.2 billion, and diluted earnings per share advanced 20% to $2.39 from $1.99 a year ago.
Among the key business drivers, payment volume rose 8%, processed transactions rose 9%, and cross-border volume, including intra-Europe, advanced 16%.
American Express Company rose 3.2% to $194.10 after the company reported mixed quarterly results.
Total revenue net of interest expense increased 11% to $15.8 billion from $14.1 billion, net income rose 23% to $1.93 billion from $1.57 billion, and diluted earnings per share advanced 27% to $2.62 from $2.02 a year ago.
Business billed in the quarter increased by 6% to $379.8 billion from $357.4 billion a year ago.
Total provision for credit losses increased by 40% to $1.4 billion from $1.0 billion a year ago.
Full-year 2023 revenue increased 14% to $60.5 billion, and net income rose to $8.4 billion, or $11.21 per share, compared with net income of $7.5 billion, or $9.85 per share, a year ago.
U.S. Movers: American Express, Intel, KLA Corp, Visa
Scott Peters
26 Jan, 2024
New York City
Intel Corp. declined 10.5% to $44.36 after the advanced chipmaker reported weaker-than-expected quarterly results and issued a cautious outlook.
Revenue in the December quarter rose 10% to $15.4 billion from $14.0 billion, and the company swung to a net income of $2.7 billion from a loss of $664 million, and diluted earnings per share were 63 cents compared to a loss of 16 cents.
For the full year 2023, revenue increased 14% to $54.2 billion. $63.1 billion, net income plunged to $1.7 billion from $8.0 billion, and diluted earnings per share dropped to 40 cents from $1.94 a year ago.
The company guided first-quarter 2024 revenue to range between $12.2 billion and $13.2 billion, with a diluted loss per share of 25 cents and a gross margin of 40.7%.
KLA Corp. fell 3.9% to $616.96 after the semiconductor equipment company reported better-than-expected quarterly results.
Revenue in the fiscal second quarter ending in December dropped to $2.48 billion from $2.98 billion, net income plunged to $583 million from $979 million, and diluted earnings per share fell to $4.28 from $6.89 a year ago.
The company estimated total revenues in the fiscal third quarter in a range of $2.30 billion, and GAAP gross margin is expected to be around 59.4%.
Diluted earnings per share is expected to be in a range of $4.93, and Non-GAAP diluted EPS is expected to be in a range of $5.26.
Visa Inc. dropped 2.7% to $265.30 after the payment processing platform reported strong quarterly results driven by robust consumer spending; however, the company signaled weakening U.S. spending volume.
Revenue in the fiscal 2024 first quarter increased 9% to $8.6 billion, net income rose 17% to $4.9 billion from $4.2 billion, and diluted earnings per share advanced 20% to $2.39 from $1.99 a year ago.
Among the key business drivers, payment volume rose 8%, processed transactions rose 9%, and cross-border volume, including intra-Europe, advanced 16%.
American Express Company rose 3.2% to $194.10 after the company reported mixed quarterly results.
Total revenue net of interest expense increased 11% to $15.8 billion from $14.1 billion, net income rose 23% to $1.93 billion from $1.57 billion, and diluted earnings per share advanced 27% to $2.62 from $2.02 a year ago.
Business billed in the quarter increased by 6% to $379.8 billion from $357.4 billion a year ago.
Total provision for credit losses increased by 40% to $1.4 billion from $1.0 billion a year ago.
Full-year 2023 revenue increased 14% to $60.5 billion, and net income rose to $8.4 billion, or $11.21 per share, compared with net income of $7.5 billion, or $9.85 per share, a year ago.
Europe Movers: KONE, Lonza Group, Louis Vuitton, Remy Cointreau, Volvo
Inga Muller
26 Jan, 2024
Frankfurt
European markets advanced in Friday's trading, and luxury stocks soared after Louis Vuitton and Remy Cointreau reported better-than-expected financial results.
The DAX index decreased 0.04% to 16,896.12, the CAC-40 index rose 1.7% to 7,588.71, and the FTSE 100 index inched higher by 1.1% to 7,612.82.
The yield on 10-year German bonds edged down to 2.26%; French bonds inched lower to 2.74%; the UK gilts edged lower to 3.95%; and Italian bonds inched lower to 3.77%.
Volvo AB declined 1.1% to SEK 248.25 after the company reported mixed quarterly results.
Net sales in the fourth quarter increased by 10% to SEK 148.1 billion from SEK 134.3 billion and rose by 8% in constant currency.
Adjusted operating income increased to SEK 18,384 million from SEK 12,171 million, indicating an adjusted operating margin of 12.4% compared to 9.1%.
Adjusted operating income excludes the negative effects of SEK 1,490 million.
Earnings per share increased to SEK 5.93 from SEK 3.26 a year ago.
"The Board of Directors proposes an ordinary dividend of SEK 7.50 per share and an extra dividend of SEK 10.50 per share,” said Martin Lundstedt, President and CEO, in an update to investors.
Lonza Group soared 13% to CHF 420.0 after the Swiss pharmaceutical group reported better-than-expected earnings and revenues.
2023 sales increased 8% to 6.72 billion Swiss francs from 6.22 billion Swiss francs and rose 10.9% at constant currency rates.
Biologics division sales rose 13.6% to 3.7 billion francs, small molecule division sales rose 10% to 901 million francs, cell and gene division sales edged up 0.4% to 696 million francs, but capsules and health ingredients division sales dropped 8.3% to 1.2 billion francs.
Fiscal 2023 operating earnings, or EBITDA, fell 9.3% to 1.94 billion francs from 2.14 billion francs a year ago, and the EBITDA margin declined to 28.9% from 34.4% a year ago.
Core EBITDA increased 0.2% from the previous year to 2 billion francs, resulting in a margin of 29.8%, down from 32.1% a year ago.
The company estimated flat sales in constant currencies and core EBITDA margins in the "high twenties."
The company proposed a 14% increase in dividends to 4.0 francs from 3.50 francs a year ago.
KONE oyj increased 3.2% to €46.18 after the Finnish elevator group reported better-than-expected results.
Sales in the fourth quarter declined by 3.5% to €2,809.9 from €2,911.5 million and rose 0.7% on comparable exchange rates.
Net income was flat at €276.3 million, and basic earnings per share were flat at 53 cents.
Orders received increased by 5.4% to €2,049.2 from €1,944.2 million a year ago. On comparable exchange rates, orders rose by 10.5%.
Sales in 2023 increased 0.4% to €10.95 billion from €10.90 billion, net income increased 18.8% to €931.6 million from €784.5 million, and basic earnings per share rose 15% to €1.79 from €1.50 a year ago.
"KONE expects its sales to be stable or to grow slightly at comparable exchange rates in 2024. The improvement in adjusted EBIT margin is expected to continue in 2024, albeit with fewer tailwinds than in 2023," the company noted in an update to investors released Friday.
Remy Cointreau SA jumped 13.2% to €100.10 after the alcoholic beverage maker reported better-than-estimated sales.
Sales declined in the first nine months of fiscal year 2024 ending in December, partly because of the calendar shift in China and because consumers in the EMEA region avoid high-priced items because of high inflation.
Sales dropped 22.7% to €956.6 million, and cognac sales plunged 35.6% because of significant destocking of inventories in China ahead of earlier-than-normal Lunar Year holidays.
Cognac sales in the U.S. were down because of the intense promotional environment during the year-end holiday period and ongoing inventory reductions.
For the full fiscal year 2024, the company anticipates sales weakness in the U.S. to persist before improving in the next financial year, sales growth to be moderated by a "persistent inflationary environment," and sales in APAC to be tempered by a slower economic recovery in China.
The company estimated fiscal year 2024 sales to decline by about 20% on an organic basis, near the low end of its previous estimated range.
Louis Vuitton soared 11.4% to €763.20 after the French luxury group reported better-than-expected financial results, indicating resilient demand for luxury products.
Total revenue in 2023 increased 9% to €86.2 billion, and net income soared 8% to €22.8 billion, but operating cash flow fell 20% to €81 billion.
Fashion and leather goods sales increased 9% to €42.2 billion, watches & jewelry sales advanced 3% to €10.9 billion, perfumes & cosmetics sales rose 7% to €8.2 billion, but wines & spirits sales declined 7% to €6.6 billion.
Selective Retailing division sales surged 20% to €17.9 billion.
"All business groups reported strong organic revenue growth, with the exception of Wines & Spirits, which was faced with a high basis of comparison and high inventory levels," the company said in its earnings update released Friday.
Europe, Japan, and the rest of Asia achieved double-digit organic growth.
In the fourth quarter, organic revenue growth came to 10% to €23.9 billion.