Market Update
U.S. Movers: American Express, CVS Healthcare, Netflix, Procter & Gamble
Scott Peters
18 Oct, 2024
New York City
Procter & Gamble declined 1.8% to $168.53 after the consumer products company reported quarterly results.
Revenue in the fiscal first quarter ending in September declined 1% to $21.7 billion from $21.9 billion, net income decreased 12% to $3.9 billion from $4.5 billion, and diluted earnings per share dropped 12% to $1.81 from $1.61 from $1.83 a year ago.
The company reiterated its full-year revenue growth to range between 2% and 4% and diluted earnings per share to increase between 10% and 12% from $6.02 in 2024, or between $6.91 and $7.05.
Netflix increased 10.2% to $759.70 after the streaming services provider reported better-than-expected quarterly results.
Revenue in the third quarter increased 15% to $9.8 billion from $8.5 billion, net income rose 26% to $2.3 billion from $1.7 billion, and diluted earnings per share advanced 45% to $5.40 from $3.73 a year ago.
Global streaming paid net members increased 14.4% to 282.7 million, and the company added 5.07 million new net paid members.
CVS Healthcare declined 7.5% to $58.90 after the drugstore chain announced preliminary third quarter earnings and replaced its chief executive.
The company estimated diluted earnings per share to range between 3 cents and 8 cents and adjusted earnings per share between $1.05 and $1.10.
The company appointed longtime executive David Joyner as the new chief executive and president, replacing Karen Lynch effective October 17.
The drug retailer said it plans to take a restructuring charge of $1.2 billion in the third quarter, related to incremental store closure costs and previously disclosed cost reduction actions.
American Express declined 5% to $271.68 after the financial service company reported weaker-than-expected quarterly results.
Total revenue net of interest expenses in the third quarter increased 8% to $16.6 billion from $15.4 billion, net income advanced 2% to $2.50 from $2.45 billion, and diluted earnings per share rose 6% to $3.49 from $3.30 a year ago.
The company reiterated its full-year revenue growth at around 9% and lifted its annual earnings per share outlook to between $13.75 and $14.05 from the previous range between $13.30 and $13.80.
S&P 500 and Nasdaq Extend Rally to Sixth Week, Netflix Pops 10%
Barry Adams
18 Oct, 2024
New York City
Stock market indexes extended gains for the sixth week in a row amid positive earnings and a stable macroeconomic backdrop.
The S&P 500 index increased 0.2% and the Nasdaq Composite advanced 0.6%, and they are likely to close higher by more than 0.5% for the week.
Market sentiment was positive after investors reviewed the latest earnings from American Express, Procter & Gamble, and Travelers.
CVS Healthcare plunged more than 10% after the company announced a change in leadership and reported weaker-than-expected third quarter preliminary earnings per share.
On the economic front, housing starts decreased 0.5% from the previous month in September to 1.354 million, and building permits fell 2.9% to 1.428 million, according to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.
Housing completions declined 5.7% from the revised estimate in August to an annual rate of 1.68 million.
In the overseas market, China reported a raft of economic data confirming slowdown and persistent weakness in the housing market.
GDP in the third quarter expanded at an annual pace of 4.6%, slower than the 4.7% rate in the second quarter, and new home prices plunged 6.1% across 70 mainland cities in September.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.2% to 5,853.0, the Nasdaq Composite rose 0.6% to 18,490.27, and the Russell 2000 index advanced 0.1% to 2,284.36.
The yield on 2-year Treasury notes edged lower to 3.96%, 10-year Treasury notes inched up to 4.08%, and 30-year Treasury bonds inched higher to 4.39%.
WTI crude oil decreased $0.32 to $70.35 a barrel, and natural gas prices edged up 1 cent to $2.34 a thermal unit.
Gold rose by $17.11 to $2,711.20 an ounce, and silver increased by $0.46 to $32.24.
The dollar index, which weighs the US currency against a basket of foreign currencies, edged higher to 103.53.
U.S. Stock Movers
Procter & Gamble declined 1.8% to $168.53 after the consumer products company reported quarterly results.
Revenue in the fiscal first quarter ending in September declined 1% to $21.7 billion from $21.9 billion, net income decreased 12% to $3.9 billion from $4.5 billion, and diluted earnings per share dropped 12% to $1.81 from $1.61 from $1.83 a year ago.
The company reiterated its full-year revenue growth to range between 2% and 4% and diluted earnings per share to increase between 10% and 12% from $6.02 in 2024, or between $6.91 and $7.05.
Netflix increased 10.2% to $759.70 after the streaming services provider reported better-than-expected quarterly results.
Revenue in the third quarter increased 15% to $9.8 billion from $8.5 billion, net income rose 26% to $2.3 billion from $1.7 billion, and diluted earnings per share advanced 45% to $5.40 from $3.73 a year ago.
Global streaming paid net members increased 14.4% to 282.7 million, and the company added 5.07 million new net paid members.
CVS Healthcare declined 7.5% to $58.90 after the drugstore chain announced preliminary third quarter earnings and replaced its chief executive.
The company estimated diluted earnings per share to range between 3 cents and 8 cents and adjusted earnings per share between $1.05 and $1.10.
The company appointed longtime executive David Joyner as the new chief executive and president, replacing Karen Lynch effective October 17.
The drug retailer said it plans to take a restructuring charge of $1.2 billion in the third quarter, related to incremental store closure costs and previously disclosed cost reduction actions.
Europe Movers: ASML, Brunello Cucinelli, EssilorLuxottica, Luxury Stocks, Oil Stocks
Inga Muller
18 Oct, 2024
Frankfurt
European markets advanced about 1% in the week after the ECB lowered its key lending rates for the third time in 2024 and signaled possible rate cuts in the future.
The DAX index increased by 0.1% to 19,609.65; the CAC-40 index rose by 0.5% to 7,621.52; and the FTSE 100 index decreased by 0.3% to 8,363.31.
The yield on 10-year German bonds edged lower to 2.19%, French bonds inched lower to 2.91%, the UK gilts edged up to 4.09%, and Italian bonds decreased to 3.37%.
EssilorLuxottica SA declined 0.1% to €215.70 after the eyewear company reported slightly weaker-than-expected quarterly results.
Revenue in the third quarter increased 2.3% to €6.4 billion from €6.3 billion, driven by 1.6% increase in North America and 5.6% rise in Europe and Middle East region.
Weakening macroeconomic conditions in Greater China weighed on sales growth in Asia Pacific region, and sales growth slowed down to 5% from 11.7% in the period a year ago.
Brunello Cucinelli jumped 4.8% to €97.75 after the fashion company reported a 12% increase in sales in its latest nine-month period.
Luxury goods makers advanced after the Cucinelli's results, and Kering SA gained 5% to €242.80, Hermes International jumped 2% to €2,110.0, and LVMH gained 3% to €627.40.
Oil exploration companies traded lower after crude oil prices hovered near a two-week low.
BP plc jumped 0.9% to 403.65 pence, Shell PLC edged up 0.1% to 2,554.50 pence, and TotalEnergies SE gained 0.9% to €60.27.
European Markets Rest After Mixed Earnings and Lackluster China Data
Bridgette Randall
18 Oct, 2024
London
European markets traded mixed a day after the European Central Bank lowered its key lending rates for the third time in 2024.
Benchmark indexes in Paris, London, and Frankfurt traded around the flatline, and crude oil prices hovered near a two-week low.
For the week, market indexes in London edged up 1.3%, in Paris rose 0.7%, and in Frankfurt advanced 0.9%.
Investors were cautious after China reported lackluster economic data and persistent weakness in the housing market.
China's third-quarter GDP expanded at an annual pace of 4.6%, faster than estimated, but economists warned that the world's second-largest economy is still likely to miss its annual growth target rate of 5%.
China's GDP growth slowed from 4.7% in the second quarter after consumer spending growth eased, according to the statistical agency.
New home prices in September declined 6.1% from a year ago across 70 mainland cities, a larger than 5.7% fall in August.
Home prices fell at the fastest pace since May 2015 and extended losses to the 16th consecutive month, according to the statistics bureau.
Existing home prices fell on average 1.2% in September across the top-tier cities, faster than the 0.3% monthly decline in August.
Meanwhile, geopolitical tensions persist in the Middle East after Hamas leader Yahya Sinwar was killed by the Israeli army during an operation in Gaza.
The killing of Sinwar is likely to escalate tensions in the region as Israel conducts its offensive in Lebanon and Gaza and prepares for a significant assault targeting Iranian oil infrastructure.
Israel is widely expected to strike before November 5, ahead of the U.S. presidential election, despite the White House's attempts to prevent a wider war in the Middle East.
Europe Indexes and Yields
The DAX index increased by 0.1% to 19,609.65; the CAC-40 index rose by 0.5% to 7,621.52; and the FTSE 100 index decreased by 0.3% to 8,363.31.
The yield on 10-year German bonds edged lower to 2.19%, French bonds inched lower to 2.91%, the UK gilts edged up to 4.09%, and Italian bonds decreased to 3.37%.
The euro edged lower to $1.08; the British pound inched higher to $1.30; and the U.S. dollar strengthened to 86.61 Swiss cents.
Brent crude decreased $0.42 to $74.02 a barrel, and the Dutch TTF natural gas fell by €0.35 to €39.21 per MWh.
Europe Stock Movers
EssilorLuxottica SA declined 0.1% to €215.70 after the eyewear company reported slightly weaker-than-expected quarterly results.
Brunello Cucinelli jumped 4.8% to €97.75 after the fashion company reported a 12% increase in sales in its latest nine-month period.
Luxury goods makers advanced after the Cucinelli's results, and Kering SA gained 5% to €242.80, Hermes International jumped 2% to €2,110.0, and LVMH gained 3% to €627.40.
Oil exploration companies traded lower after crude oil prices hovered near a two-week low.
BP plc jumped 0.9% to 403.65 pence, Shell PLC edged up 0.1% to 2,554.50 pence, and TotalEnergies SE gained 0.9% to €60.27.
Japan's Inflation Slows to Five-Month Low, Nikkei 225 Extends Weekly Loss to 1.4%
Akira Ito
18 Oct, 2024
Tokyo
Stocks in Tokyo advanced and halted a two-day slide after fears of hawkish monetary policy eased following the release of inflation data.
The Nikkei 225 stock average increased 0.2%, and the broader Topix index edged slightly higher in lackluster trading.
The yen drifted lower and traded at a six-week low of 150.06 against the dollar after the interest rate worry receded following the release of the inflation report.
Investors have been on edge despite a growing campaign by central bank officials that rates are not likely to be raised in the immediate future and policymakers are looking for a gradual increase in interest rates.
Earlier in the week, Bank of Japan board member Seiji Adachi said that the central bank must raise rates at a "very moderate" pace, signaling the gradual approach amid elevated global geopolitical uncertainties.
Consumer price inflation in September eased to an annual pace of 2.5% from 3.0% in August, said the Ministry of Internal Affairs and Communications on Friday.
Core consumer price inflation, which excludes food prices but not energy prices, declined to an annual pace of 2.4% amid weakening inflation in energy and transportation prices.
The overall and core consumer price inflation dropped to a five-month low as the electricity prices increased at the slowest pace after the removal of government subsidies.
Japan Stock Movers
The Nikkei 225 Stock Average rose 0.2% to 38,981.75 and the broader Topix index advanced 0.04% to 2,688.98.
Tokyo Electron decreased 0.1% to ¥23,500.0, Advantest Corp. fell 0.4% to ¥7,968.0, Lasertec Corporation eased 0.8% to ¥21,345.0, and Disco Corp. jumped 7.7% to ¥38,310.0.
Mitsubishi UFJ Financial Group added 1.5% to ¥1,644.0, Sumitomo Mitsui Financial Group added 0.7% to ¥3,263.0, and Mizuho Financial Group advanced 1% to ¥3,204.0.
Seven & I declined 0.2% to ¥2,212.0, Fast Retailing Company increased 1% to ¥53,570.0, and Isetan Mitsukoshi declined 2.8% to ¥2,306.0.
Toyota Motor increased 0.1% to ¥2,552.50, Honda Motor decreased 0.1% to ¥1,533.0, and Nissan Motor declined 0.5% to ¥395.50.
Nippon Yusen KK rose 0.5% to ¥5,142.0, Kawasaki Kisen Kaisha added 1% to ¥2,082.00, and Mitsui O.S.K. Lines added 0.8% to ¥4,994.0.
China Q3 GDP Growth Slowed to 4.6%, New Home Prices Extend Decline to 16th Consecutive Month
Li Chen
18 Oct, 2024
Hong Kong
Stock market indexes in Hong Kong and mainland China soared on renewed calls for additional fiscal stimulus following the latest batch of economic data.
The Hang Seng index and CSI 300 index jumped as much as 3% after investors reviewed updates on retail sales, new home prices, and third quarter GDP growth.
China's property market, once the main driver of the economy, has now become a drag as home prices continue to fall.
China's retail sales advanced 3.2% and industrial output rose 5.4% in September, according to separate reports released by the National Bureau of Statistics.
In addition, China's third quarter GDP expanded at an annual pace of 4.6%, faster than estimated, but economists warned that the world's second-largest economy is still likely to miss its annual growth target rate of 5%.
China's GDP growth slowed from 4.7% in the second quarter after consumer spending growth eased, according to the statistical agency.
New home prices in September declined 6.1% from a year ago across 70 mainland cities, a larger than 5.7% fall in August.
Prices fell at the fastest pace since May 2015 and extended losses to the 16th consecutive month, according to the statistics bureau.
Existing home prices fell on average 1.2% in September across the top-tier cities, faster than the 0.3% monthly decline in August.
Market sentiment was further bolstered after PBoC Governor Pan Gongsheng suggested that the central bank is ready to act if economic conditions warrant such a move.
Governor Gongsheng said at a financial forum that the central bank is prepared to lower the cash reserve ratio requirement and other policy rates by the end of the year, depending on the liquidity condition.
China Stock Movers
The Hang Seng index rose 2.8% to 20,639.04, and the CSI 300 index rose 3.2% to 3,907.37.
China Vanke increased 4.6% to HK $6.91, China Resources Land jumped 3.8% to HK $26.15, and Longfor Group added 2.2% to HK $12.22.
Alibaba Group Holding increased 1% to HK $99.50, JD.com rose 1.6% to HK $157.10, and Tencent Holdings advanced 3.9% to HK $428.60.
India Movers: Axis Bank, Hyundai Motor, Mazagon Dock, Polcycab, Zomato
Arun Goswami
18 Oct, 2024
Mumbai
The Sensex and Nifty indexes extended weekly losses to more than 1% after a week of choppy trading as investors reviewed a mixed batch of earnings.
Crude oil prices extended two-week losses to over 10%, and the rupee hovered near a record low.
The Sensex index decreased by 0.4% to 80,651.83, and the Nifty index fell by 0.3% to 24,667.65.
On the Mumbai stock exchange, 93 stocks traded at their 52-week highs, and 44 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds inched higher to 6.77%, and the Indian rupee eased to 84.04 against the U.S. dollar.
Hyundai Motor India's initial public offering was oversubscribed amid strong participation from institutional investors.
The mega-issue was oversubscribed by 2.37 times at the conclusion of the three-day subscription period on October 17.
The ₹27,870 crore public offering of 9.97 crore shares attracted bids totaling 23.6 crore, driven by a strong demand from institutional investors.
Total institutional tranche attracted bids totaling nearly 7 times the offering size, and retail investor portion received bids for 50% of the allocated shares, according to the data available on the NSE website.
The South Korea-based Hyundai Motor Company is the sole seller in the offering, and the company is not issuing new shares.
Zomato fell 0.7% to ₹269.25 after the delivery company said its board at a meeting on October 22 plans to consider raising additional funds through an institutional offering.
The company is also scheduled to release its quarterly results on the same day.
Infosys declined 2.9% to ₹1,910.75 after the company reported weaker-than-expected revenue and earnings growth in the September quarter.
Operating revenue increased 5.1% to ₹40,986 crore from ₹38,994 crore, and net income advanced 4.7% to ₹6,506 crore from ₹6,212 crore a year ago.
The technology services provider lifted its full-year revenue growth range to between 3.75% and 4.5% from the previous estimate between 3% and 4%.
Mazagon Dock Shipbuilders rose 2.2% to ₹4,334.55 as the company reported strong quarterly results.
Operating revenue in the September quarter increased 8.5% to ₹2,357 crore from ₹2,172.6 crore, and net income advanced 121% to ₹696 crore from ₹314.3 crore a year ago.
Axis Bank increased 3.9% to ₹1,176.10 after the financial service company reported better-than-expected quarterly results.
Total income in the September quarter increased to ₹37,142 crore from ₹31,660 crore and net income advanced 18% to ₹6,918 crore from ₹5,864 crore a year ago.
Net interest income increased 9% and net interest margin was 3.99%, and the bank added gross non-performing loans advanced by 29% to 1.44% and net non-performing loans eased 2 basis points to 0.34%.
Polycab India decreased 3.2% to ₹6,888.20 after the wire and cable company said strong competition hurt its operating margins in the September quarter.
Operating revenue in the quarter increased 30.4% to ₹5,498 crore from ₹4,217 crore and total comprehensive income advanced 3.7% to ₹445 crore from ₹429 crore a year ago.
World Markets Hover Near Record Highs, ECB Cuts Rates and China Housing Stimulus Lacks Punch
Alexander Garcia
17 Oct, 2024
Miami
Tech rally on Wall Street powered a rise in broader indexes as investors reviewed latest economic updates.
The S&P 500 index increased 0.4%, and the S&P 500 index edged up 0.6% as investors bid up tech stocks.
Chip stocks led the gainers after Taiwan Semiconductor reported strong third-quarter results and boosted its sales outlook for the current year.
Taiwan Semi's quarterly results boosted other chip stocks, and Nvidia jumped 2.2%, AMD advanced 1.5%, and Broadcom gained 2.7%.
Investors reacted positively to the latest updates on retail sales and weekly jobless claims.
Retail and food services sales increased at an annual rate of 1.7% in September, but the pace of increase was the slowest in eight months, according to the U.S. Census Bureau.
Sales are adjusted for seasonal factors but not adjusted for inflation.
Preliminary retail and food services sales increased 0.4% from the previous month to $714.4 billion.
Sales at food services and drinking places increased 1% from the previous month; miscellaneous stores advanced 4%, but declined 3.3% at electronic and appliance stores and fell 1.6% at gasoline stations.
Sales at auto dealers were flat.
However, sales excluding food services, auto dealers, building materials stores, and gasoline stations, which are used to calculate gross domestic product, jumped 0.7%.
Weekly initial jobless claims declined 19,000 to 241,000 in the week ending October 12, the U.S. Department of Labor reported Thursday.
The jobless claims eased from the previous week after disruptions from Hurricanes Milton and Helena spiked filings.
Despite the decline in the last week, claims are still running higher than the average earlier in the year, highlighting softening labor market conditions since its post-pandemic peak.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.4% to 5,863.52, the Nasdaq Composite rose 0.6% to 18,473.97, and the Russell 2000 index fell 0.4% to 2,287.77.
The yield on 2-year Treasury notes edged higher to 3.99%, 10-year Treasury notes inched up to 4.08%, and 30-year Treasury bonds inched higher to 4.36%.
WTI crude oil increased $0.21 to $70.71 a barrel, and natural gas prices edged up 2 cents to $2.38 a thermal unit.
Gold rose by $16.61 to $2,690.51 an ounce, and silver increased by $0.18 to $31.57.
The dollar index, which weighs the US currency against a basket of foreign currencies, edged higher to 103.81.
U.S. Stock Movers
Taiwan Semiconductor Manufacturing Company increased 12% to $210.36 after the company reported sharply higher sales and earnings in the third quarter.
Revenue increased 36% to $23.5 billion, and gross margin expanded to 57.8% from 54.3% a year ago.
Net income in the quarter jumped to NT 325.08 billion, or $10.05 billion, from NT 210.8 billion a year ago.
Gross margin for the quarter was 57.8%, operating margin was 47.5%, and net profit margin was 42.8%.
In the third quarter, shipments of 3-nanometer accounted for 20% of total wafer revenue; 5-nanometer accounted for 32%; 7-nanometer accounted for 17%.
Advanced technologies, defined as 7-nanometer and smaller chip technologies, accounted for 69% of total wafer revenue.
The company guided fourth-quarter revenue to fall between $26.1 billion and $26.9 billion.
Lucid Group dropped 14.9% to $2.80 after the electric vehicle company announced a stock offering to sell 262.5 million.
The company also said its major stockholder, Ayar Third Investment, and an affiliate of the Saudi Arabia-controlled sovereign wealth fund have agreed to purchase 374.7 million shares in a concurrent private placement.
European Markets Advanced After the ECB Lowered Rates Third Time In 2024
European markets advanced as investors reacted rate decisions from the European Central Bank.
Benchmark indexes in Paris, London, and Frankfurt rose between 0.5% and 1.2% as investors reviewed the latest update on the Euro Area inflation.
Consumer price inflation was lowered to an annual rate of 1.7% in September from the previous estimate of 1.8% and fell from 2.2% in August.
The annual core rate of inflation, which excludes prices of food and energy, eased to 2.7% from 2.8% in August, according to a report by the Eurozone statistical agency, Eurostat.
As widely expected, the European Central Bank lowered its benchmark rates by 25 basis points, the second time in a row and the third time this year, as policymakers looked for ways to arrest the rapidly deteriorating economic conditions.
The central bank lowered its deposit facility rate to 3.25%, main refinancing rate to 3.4%, and marginal lending facility rate to 3.65%.
Crude oil prices continued to slide in international trading amid weakening demand growth expectations from China.
China's housing minister announced several key measures to revive demand for new homes, but those measures fell short of market expectations.
China plans to increase its "white list" of approved residential projects eligible for financing and increase lending to 4 trillion yen, or $562 billion.
Local Chinese authorities in key metropolitan areas relaxed home purchase restrictions, lowered down payments, and provided additional incentives for first-time home buyers.
Despite the raft of measures, property stocks sold off in Shanghai and Hong Kong on the worry that the proposed stimulus did not go far enough to revive consumer confidence.
Europe Indexes and Yields
The DAX index increased by 0.8% to 19,583.59; the CAC-40 index rose by 1.2% to 7,583.73; and the FTSE 100 index jumped by 0.7% to 8,385.13.
The yield on 10-year German bonds edged lower to 2.19%, French bonds inched lower to 2.94%, the UK gilts edged down to 4.07%, and Italian bonds decreased to 3.40%.
The euro edged lower to $1.08; the British pound inched higher to $1.30; and the U.S. dollar strengthened to 86.34 Swiss cents.
Brent crude decreased $0.23 to $73.98 a barrel, and the Dutch TTF natural gas rose by €0.10 to €39.58 per MWh.
Europe Stock Movers
Nordea Bank increased 5.5% to €10.97 after the Helsinki-based bank raised its estimate of annual return on equity and announced a new stock buyback plan.
Pernod Ricard increased 1.9% to €125.80 despite the French wine and spirit maker reporting a decline in sales.
Sales in the fiscal first quarter declined 8.5% to €2.78 billion, and the negative impact of unfavorable foreign exchange rates was €103 million.
The company blamed the weakness on a sharp decrease in sales in China because of weak consumer sentiment, inventory adjustments in the U.S., and technical challenges in India.
Sales in the U.S. declined by 10%, in China plunged by 26%, in Europe fell by 3%, but rose in India by 2%.
Nokia Oyj declined 4.3% to €3.88 after the Finnish tech company reported a 9% increase in operating profit and reiterated its annual earnings outlook.
Net sales in the third quarter declined 7% to €4.3 billion from €4.7 billion, net income increased 32% to €175 million from €133 million, and diluted earnings per share rose to 3 cents from 2 cents a year ago.
The company reiterated its full-year operating earnings outlook to range between €2.3 billion and €2.9 billion and free cash flow conversion from operating profit to range between 30% and 60%.
Nestle SA increased 2.5% to CHF 86.02 despite the Swiss food product maker reporting weaker-than-expected sales.
Reported sales in the nine-month period declined 2.4% to CHF 67.1 billion from CHF 68.8 billion, driven by the 4.1% negative impact of foreign exchange rates and net divestures by 0.3%.
The company estimated full-year organic sales growth of 2%, underlying operating profit margin of around 17%, and underlying earnings per share growth in constant currency to be broadly flat.
China Indexes Extended Weekly Losses After Housing Secretary Conference Failed to Deliver New Measures
Stocks in Hong Kong and mainland China resumed their downward slide after a press briefing from the housing secretary fell short of market expectations.
Benchmark indexes opened higher but turned lower as the press briefing by the Minister of Housing Rural-Urban Development, Ni Hong, got underway.
Officials made several key announcements to relax property purchase restrictions, increase financing to local governments, and expedite the purchase of properties on the so-called preferred list of projects.
The housing minister said between January and September, about 1.5 million residential units were built or allocated, and about 4.5 million people are expected to move in by the year's end.
Minister Hong added that loans to preferred projects on the so-called white list have reached 2.3 trillion yen, or about $313 billion, with the target of 4 trillion yuan by the end of the year.
The officials from the central bank, the Ministry of Finance, the National Financial Regulatory Administration, and the housing secretary chaired the widely advertised press conference.
The government's relaxation of mortgage rates and additional measures to lower down payment requirements will support the demand for new homes but will not ease the financial strain on property developers in the near future.
The latest press briefing from the housing secretary follows the announcement from the finance minister a week ago, and government officials failed to provide clear fiscal measures to revive consumer confidence.
Market indexes in Hong Kong and mainland China surged more than 20% in the three-week period but have lost about one-third of the gains after the government officials failed to follow through with specific measures.
The Hang Seng index has lost more than 6% in the last three days as investors lower expectations of policy reforms to arrest falling property markets and revive consumer confidence.
China Stock Movers
The Hang Seng index decreased 1.2% to 20,039.69, and the CSI 300 index dropped 0.8% to 3,803.19.
Residential property developers fell sharply after the housing secretary failed to announce any new measures to ease the financial burden on the companies.
The announced measures are not expected to improve home buyers's confidence as the property market is likely to remain depressed in the foreseeable future.
China Vanke plunged 16.6% to HK $6.61, China Resources Land dropped 5.2% to HK $25.20, and Longfor declined 13.5% to HK $11.92.
Alibaba Group fell 0.8% to HK $98.15, Tencent Holding decreased 1.1% to HK $411.20, and JD.com declined 0.5% to HK $154.70.
U.S. Movers: CSX, Discover Financial, Lucid Group, TSMC
Scott Peters
17 Oct, 2024
New York City
Taiwan Semiconductor Manufacturing Company increased 12% to $210.36 after the company reported sharply higher sales and earnings in the third quarter.
Revenue increased 36% to $23.5 billion, and gross margin expanded to 57.8% from 54.3% a year ago.
Net income in the quarter jumped to NT 325.08 billion, or $10.05 billion, from NT 210.8 billion a year ago.
Gross margin for the quarter was 57.8%, operating margin was 47.5%, and net profit margin was 42.8%.
In the third quarter, shipments of 3-nanometer accounted for 20% of total wafer revenue; 5-nanometer accounted for 32%; 7-nanometer accounted for 17%.
Advanced technologies, defined as 7-nanometer and smaller chip technologies, accounted for 69% of total wafer revenue.
The company guided fourth-quarter revenue to fall between $26.1 billion and $26.9 billion.
Lucid Group dropped 14.9% to $2.80 after the electric vehicle company announced a stock offering to sell 262.5 million.
The company also said its major stockholder, Ayar Third Investment, and an affiliate of the Saudi Arabia-controlled sovereign wealth fund have agreed to purchase 374.7 million shares in a concurrent private placement.
CSX Corp. declined 5% to $33.71 after the railroad transportation company reported weaker-than-expected quarterly results.
Revenue in the third quarter increased 1% to $3.62 billion from $3.57 billion, net income increased 8% to $894 million from $828 million, and diluted earnings per share rose to 46 cents from 41 cents a year ago.
Total volume of 1.59 million units for the quarter was 3% higher from a year ago, but lower fuel surcharges and a reduction in other revenue negatively impacted overall revenue.
Discover Financial Services increased 1.4% to $149.64 after the company reported higher-than-expected third quarter results.
Total revenue net of interest expense increased 10% to $4.5 billion from $4.0 billion, net income rose 41% to $965 million from $683 million, and diluted earnings per share advanced 42% to $3.69 from $2.59 a year ago.
The total net charge-off rate was 4.86%, up 134 basis points from a year ago and up 3 basis points from the previous quarter "reflecting continued seasoning of recent vintages and the student loan accounting classification change."
The credit card net charge-off rate was 5.28%, up 125 basis points from a year ago and down 27 basis points from the previous quarter.
Strong Retail Sales and Chip Stocks Rally Lifts S&P 500 to New Highs
Barry Adams
17 Oct, 2024
New York City
Market sentiment on Wall Street was positive after retail sales rose in September and artificial intelligence-linked stocks got another boost.
The S&P 500 index increased 0.2%, and the S&P 500 index edged up 0.3% as investors bid up tech stocks.
Chip stocks led the gainers after Taiwan Semiconductor reported strong third-quarter results and boosted its sales outlook for the current year.
Taiwan Semi's quarterly results boosted other chip stocks, and Nvidia jumped 2.2%, AMD advanced 1.5%, and Broadcom gained 2.7%.
Investors reacted positively to the latest updates on retail sales and weekly jobless claims.
Retail and food services sales increased at an annual rate of 1.7% in September, but the pace of increase was the slowest in eight months, according to the U.S. Census Bureau.
Sales are adjusted for seasonal factors but not adjusted for inflation.
Preliminary retail and food services sales increased 0.4% from the previous month to $714.4 billion.
Sales at food services and drinking places increased 1% from the previous month; miscellaneous stores advanced 4%, but declined 3.3% at electronic and appliance stores and fell 1.6% at gasoline stations.
Sales at auto dealers were flat.
However, sales excluding food services, auto dealers, building materials stores, and gasoline stations, which are used to calculate gross domestic product, jumped 0.7%.
Weekly initial jobless claims declined 19,000 to 241,000 in the week ending October 12, the U.S. Department of Labor reported Thursday.
The jobless claims eased from the previous week after disruptions from Hurricanes Milton and Helena spiked filings.
Despite the decline in the last week, claims are still running higher than the average earlier in the year, highlighting softening labor market conditions since its post-pandemic peak.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.2% to 5,855.0, the Nasdaq Composite rose 0.3% to 18,417.52, and the Russell 2000 index fell 0.1% to 2,285.49.
The yield on 2-year Treasury notes edged higher to 3.99%, 10-year Treasury notes inched up to 4.08%, and 30-year Treasury bonds inched higher to 4.36%.
WTI crude oil increased $0.21 to $70.71 a barrel, and natural gas prices edged up 2 cents to $2.38 a thermal unit.
Gold rose by $14.17 to $2,688.17 an ounce, and silver increased by $0.02 to $31.76.
The dollar index, which weighs the US currency against a basket of foreign currencies, edged higher to 103.78.
U.S. Stock Movers
Taiwan Semiconductor Manufacturing Company increased 12% to $210.36 after the company reported sharply higher sales and earnings in the third quarter.
Revenue increased 36% to $23.5 billion, and gross margin expanded to 57.8% from 54.3% a year ago.
Net income in the quarter jumped to NT 325.08 billion, or $10.05 billion, from NT 210.8 billion a year ago.
Gross margin for the quarter was 57.8%, operating margin was 47.5%, and net profit margin was 42.8%.
In the third quarter, shipments of 3-nanometer accounted for 20% of total wafer revenue; 5-nanometer accounted for 32%; 7-nanometer accounted for 17%.
Advanced technologies, defined as 7-nanometer and smaller chip technologies, accounted for 69% of total wafer revenue.
The company guided fourth-quarter revenue to fall between $26.1 billion and $26.9 billion.
Lucid Group dropped 14.9% to $2.80 after the electric vehicle company announced a stock offering to sell 262.5 million.
The company also said its major stockholder, Ayar Third Investment, and an affiliate of the Saudi Arabia-controlled sovereign wealth fund have agreed to purchase 374.7 million shares in a concurrent private placement.
Europe Movers: Nestle, Nokia, Nordea Bank, Pernod Ricard
Inga Muller
17 Oct, 2024
Frankfurt
European markets advanced after the European Central Bank lowered its key lending rates by 25 basis points, as widely anticipated.
Inflation in the currency union fell below the target rate of 2% for the first time in over three years.
The DAX index increased by 0.9% to 19,598.83; the CAC-40 index rose by 1.2% to 7,584.37; and the FTSE 100 index rose by 0.4% to 8,362.67.
The yield on 10-year German bonds edged lower to 2.19%, French bonds inched lower to 2.94%, the UK gilts edged down to 4.07%, and Italian bonds decreased to 3.40%.
Nordea Bank increased 5.5% to €10.97 after the Helsinki-based bank raised its estimate of annual return on equity and announced a new stock buyback plan.
Pernod Ricard increased 1.9% to €125.80 despite the French wine and spirit maker reporting a decline in sales.
Sales in the fiscal first quarter declined 8.5% to €2.78 billion, and the negative impact of unfavorable foreign exchange rates was €103 million.
The company blamed the weakness on a sharp decrease in sales in China because of weak consumer sentiment, inventory adjustments in the U.S., and technical challenges in India.
Sales in the U.S. declined by 10%, in China plunged by 26%, in Europe fell by 3%, but rose in India by 2%.
Nokia Oyj declined 4.3% to €3.88 after the Finnish tech company reported a 9% increase in operating profit and reiterated its annual earnings outlook.
Net sales in the third quarter declined 7% to €4.3 billion from €4.7 billion, net income increased 32% to €175 million from €133 million, and diluted earnings per share rose to 3 cents from 2 cents a year ago.
The company reiterated its full-year operating earnings outlook to range between €2.3 billion and €2.9 billion and free cash flow conversion from operating profit to range between 30% and 60%.
Nestle SA increased 2.5% to CHF 86.02 despite the Swiss food product maker reporting weaker-than-expected sales.
Reported sales in the nine-month period declined 2.4% to CHF 67.1 billion from CHF 68.8 billion, driven by the 4.1% negative impact of foreign exchange rates and net divestures by 0.3%.
The company estimated full-year organic sales growth of 2%, underlying operating profit margin of around 17%, and underlying earnings per share growth in constant currency to be broadly flat.
European Markets Advanced After the ECB Lowered Rates by 0.25%
Bridgette Randall
17 Oct, 2024
London
European markets advanced as investors reacted rate decisions from the European Central Bank.
Benchmark indexes in Paris, London, and Frankfurt rose between 0.5% and 1.2% as investors reviewed the latest update on the Euro Area inflation.
Consumer price inflation was lowered to an annual rate of 1.7% in September from the previous estimate of 1.8% and fell from 2.2% in August.
The annual core rate of inflation, which excludes prices of food and energy, eased to 2.7% from 2.8% in August, according to a report by the Eurozone statistical agency, Eurostat.
As widely expected, the European Central Bank lowered its benchmark rates by 25 basis points, the second time in a row and the third time this year, as policymakers looked for ways to arrest the rapidly deteriorating economic conditions.
The central bank lowered its deposit facility rate to 3.25%, main refinancing rate to 3.4%, and marginal lending facility rate to 3.65%.
Crude oil prices continued to slide in international trading amid weakening demand growth expectations from China.
China's housing minister announced several key measures to revive demand for new homes, but those measures fell short of market expectations.
China plans to increase its "white list" of approved residential projects eligible for financing and increase lending to 4 trillion yen, or $562 billion.
Local Chinese authorities in key metropolitan areas relaxed home purchase restrictions, lowered down payments, and provided additional incentives for first-time home buyers.
Despite the raft of measures, property stocks sold off in Shanghai and Hong Kong on the worry that the proposed stimulus did not go far enough to revive consumer confidence.
Europe Indexes and Yields
The DAX index increased by 0.9% to 19,598.83; the CAC-40 index rose by 1.2% to 7,584.37; and the FTSE 100 index advanced by 0.4% to 8,362.67.
The yield on 10-year German bonds edged lower to 2.19%, French bonds inched lower to 2.94%, the UK gilts edged down to 4.07%, and Italian bonds decreased to 3.40%.
The euro edged lower to $1.08; the British pound inched higher to $1.30; and the U.S. dollar strengthened to 86.34 Swiss cents.
Brent crude decreased $0.39 to $73.85 a barrel, and the Dutch TTF natural gas fell by €0.18 to €39.40 per MWh.
Europe Stock Movers
Nordea Bank increased 5.5% to €10.97 after the Helsinki-based bank raised its estimate of annual return on equity and announced a new stock buyback plan.
Pernod Ricard increased 1.9% to €125.80 despite the French wine and spirit maker reporting a decline in sales.
Sales in the fiscal first quarter declined 8.5% to €2.78 billion, and the negative impact of unfavorable foreign exchange rates was €103 million.
The company blamed the weakness on a sharp decrease in sales in China because of weak consumer sentiment, inventory adjustments in the U.S., and technical challenges in India.
Sales in the U.S. declined by 10%, in China plunged by 26%, in Europe fell by 3%, but rose in India by 2%.
Nokia Oyj declined 4.3% to €3.88 after the Finnish tech company reported a 9% increase in operating profit and reiterated its annual earnings outlook.
Net sales in the third quarter declined 7% to €4.3 billion from €4.7 billion, net income increased 32% to €175 million from €133 million, and diluted earnings per share rose to 3 cents from 2 cents a year ago.
The company reiterated its full-year operating earnings outlook to range between €2.3 billion and €2.9 billion and free cash flow conversion from operating profit to range between 30% and 60%.
Nestle SA increased 2.5% to CHF 86.02 despite the Swiss food product maker reporting weaker-than-expected sales.
Reported sales in the nine-month period declined 2.4% to CHF 67.1 billion from CHF 68.8 billion, driven by the 4.1% negative impact of foreign exchange rates and net divestures by 0.3%.
The company estimated full-year organic sales growth of 2%, underlying operating profit margin of around 17%, and underlying earnings per share growth in constant currency to be broadly flat.
China Indexes Extended Weekly Losses After Housing Secretary Conference Failed to Deliver New Measures
Li Chen
17 Oct, 2024
Hong Kong
Stocks in Hong Kong and mainland China resumed their downward slide after a press briefing from the housing secretary fell short of market expectations.
Benchmark indexes opened higher but turned lower as the press briefing by the Minister of Housing Rural-Urban Development, Ni Hong, got underway.
Officials made several key announcements to relax property purchase restrictions, increase financing to local governments, and expedite the purchase of properties on the so-called preferred list of projects.
The housing minister said between January and September, about 1.5 million residential units were built or allocated, and about 4.5 million people are expected to move in by the year's end.
Minister Hong added that loans to preferred projects on the so-called white list have reached 2.3 trillion yen, or about $313 billion, with the target of 4 trillion yuan by the end of the year.
The officials from the central bank, the Ministry of Finance, the National Financial Regulatory Administration, and the housing secretary chaired the widely advertised press conference.
The government's relaxation of mortgage rates and additional measures to lower down payment requirements will support the demand for new homes but will not ease the financial strain on property developers in the near future.
The latest press briefing from the housing secretary follows the announcement from the finance minister a week ago, and government officials failed to provide clear fiscal measures to revive consumer confidence.
Market indexes in Hong Kong and mainland China surged more than 20% in the three-week period but have lost about one-third of the gains after the government officials failed to follow through with specific measures.
The Hang Seng index has lost more than 6% in the last three days as investors lower expectations of policy reforms to arrest falling property markets and revive consumer confidence.
China Stock Movers
The Hang Seng index decreased 1.2% to 20,039.69, and the CSI 300 index dropped 0.8% to 3,803.19.
Residential property developers fell sharply after the housing secretary failed to announce any new measures to ease the financial burden on the companies.
The announced measures are not expected to improve home buyers's confidence as the property market is likely to remain depressed in the foreseeable future.
China Vanke plunged 16.6% to HK $6.61, China Resources Land dropped 5.2% to HK $25.20, and Longfor declined 13.5% to HK $11.92.
Alibaba Group fell 0.8% to HK $98.15, Tencent Holding decreased 1.1% to HK $411.20, and JD.com declined 0.5% to HK $154.70.
India Movers: Bajaj Auto, Crisil, GMR Airports, Kolte-Patil, L&T Technology, Reliance Industries
Arun Goswami
17 Oct, 2024
Mumbai
Investors reviewed the latest batch of mixed earnings results and corporate announcements.
The Sensex index decreased by 0.4% to 81,200.98, and the Nifty index fell by 0.5% to 24,836.45.
On the Mumbai stock exchange, 196 stocks traded at their 52-week highs, and 21 stocks traded at their 52-week lows.
Bajaj Auto declined 8.5% to ₹10,624.30 after the vehicle maker reported weaker-than-expected September quarter results.
Standalone revenue in the fiscal second quarter increased ₹13,512 crore from 11,138 crore, net income rose to ₹2,005 crore from ₹1,836 crore, and diluted earnings per share rose to ₹71.9 from ₹64.9 a year ago.
Net income was impacted by the one-time deferred-tax item of ₹211.26 crore in the current quarter.
L&T Technology Services declined 1.4% to ₹5,294.70 after the company reported weak growth in its consolidated profit.
Revenue in the fiscal second quarter ending in September increased 7.8% to ₹2,639 crore from 2,427 crore, and net income attributable to shareholders advanced to 291 crore from 278 crore, and diluted earnings per share increased to 30.12 from 29.76 a year ago.
The company also announced an interim dividend payment of ₹17 per share.
Crisil increased 4.5% to ₹5,011.15 after the rating agency reported better-than-expected fiscal second quarter results.
Revenue in the September quarter increased to ₹833.2 crore from ₹771.8 crore, comprehensive net income rose to ₹183.1 crore from ₹175.8 crore, and diluted earnings per share rose to ₹23.24 from ₹20.76 a year ago.
The company declared an interim cash dividend of ₹15 per share, higher than the dividend payment of ₹11 declared a year ago.
Kolte-Patil Developers advanced 13% to ₹443.50 after the company reported record quarterly sales in the September quarter.
Revenue increased 22% from a year ago to ₹770 crore, and sales per square foot realization increased 16% to ₹7,472 crore from ₹6,426 crore a year ago.
The luxury residential project 24K in Bengaluru generated about 25% of total gross booking revenue.
Gross collection in the quarter increased 16% to ₹550 crore from ₹472 crore a year ago.
GMR Airports decreased 2.7% to ₹87.23, and the company released September traffic data.
The total number of passengers handled at all airports increased 9% to 1.02 crore, driven by a 7.5% increase in domestic passengers and a 12% rise in international passengers.
Reliance Industries increased 0.7% to ₹2,727.70, and the company set the 1-to-1 bonus issue date of October 28.
S&P 500 and World Markets Hover Near Recent Highs as Investors Focus On Earnings
Alexander Garcia
16 Oct, 2024
Miami
Stocks on Wall Street edged slightly higher as benchmark indexes attempted to surpass previous record highs set earlier in the week.
The S&P 500 index edged up 0.2%, the tech-heavy Nasdaq Composite index increased 0.1%, and the Russell 2000 traded at a new intraday high.
Investors have been bidding up stocks after payrolls expanded at a faster-than-expected pace in September and inflation continued to trend lower toward the Fed's target rate of 2%.
Moreover, investors returned to add positions to artificial intelligence-linked stocks amid a growing appetite for risky stocks.
Market sentiment further improved after Goldman Sachs, Bank of America, and Citigroup reported earnings exceeding market expectations.
Earnings beat from Morgan Stanley and United Airlines also supported broader market levels in Wednesday's trading.
Crude oil prices hovered near two-week lows as rising global supply outweighed elevated Iran-Israel tensions, denting stocks in the energy sector for the third day in a row.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.2% to 5,828.11, the Nasdaq Composite rose 0.1% to 18,319.36, and the Russell 2000 index advanced 1.6% to 2,287.11.
The yield on 2-year Treasury notes edged lower to 3.93%, 10-year Treasury notes inched down to 4.01%, and 30-year Treasury bonds inched higher to 4.29%.
WTI crude oil decreased $0.11 to $70.46 a barrel, and natural gas prices edged down 10 cents to $2.39 a thermal unit.
Gold rose by $11.13 to $2,671.38 an ounce, and silver increased by $0.26 to $31.71.
The dollar index, which weighs the US currency against a basket of foreign currencies, edged higher to 103.27.
U.S. Stock Movers
United Airlines rose 7.5% to $68.90 after the company announced a stock repurchase plan as part of its quarterly earnings update.
The airline said it plans to buyback up to $1.5 billion of its stock and warrants originally issued to the U.S. Treasury, the first such purchase since before the COVID-19 pandemic.
In the quarter, the company repurchased in the open market just over 2 million shares of its common stock in connection with the exercise of roughly 6.4 million warrants issued to the U.S. Treasury under the CARES Act and Payroll Support Program.
The company repurchased shares at an average price of $39.99.
The repurchase of these shares eliminated the dilution associated with the warrants exercised and are separate from the new stock repurchase plan of $1.5 billion.
Revenue in the third quarter increased 2.5% to $14.8 billion from $14.5 billion, net income declined 15.1% to $965 million, and diluted earnings per share dropped to $2.90 from $3.42 a year ago.
Morgan Stanley increased 7.5% to $120.50 after the financial services company reported better-than-expected revenue and earnings in the third quarter.
Revenue increased to $15.4 billion from $13.3 billion, net income advanced to $3.2 billion from $2.4 billion, and diluted earnings per share rose to $1.88 from $1.38 a year ago.
Revenue in the institutional securities division increased to $6.8 billion from $5.7 billion, wealth management jumped to $7.2 billion from $6.4 billion, and investment management advanced to $1.5 billion from $1.3 billion a year ago.
The wealth management unit attracted $64 billion in new assets, increasing total client assets to $6 trillion.
Investment management unit received a net long-term asset flow of $7 billion, and assets at the end of the quarter increased to $1.6 trillion.
European Markets Faced Headwinds After LVMH Sales Dropped
European markets traded down ahead of the rate decisions from the European Central Bank, and weak results from two leading companies compounded market anxieties.
Benchmark indexes in London, Paris, and Frankfurt traded down ahead of the interest rate decisions from the European Central Bank on Thursday.
The European Central Bank is widely expected to cut rates for the third time this year amid deteriorating economic conditions and a weakening inflation outlook.
Inflation in the eurozone peaked at 10.6% in October 2022 and has steadily declined to an annual 1.8% in September, below the central bank's targe rate of 2%.
This decline in overall inflation is primarily driven by the fall in energy prices, but core inflation, which excludes food and energy prices, remained at 2.7% and service inflation stayed at 4%.
UK Consumer Price Inflation Eased In September
Separately, the UK's overall inflation decreased to 1.7% in September, the lowest since April 2021, after staying at 2.2% in the previous two months, the Office for National Statistics reported Wednesday.
The core rate of inflation, which excludes food and energy prices, decreased to an annual rate of 3.2% in September from 3.6% in the previous month.
Core inflation dropped to the lowest level since September 2021.
Europe Indexes and Yields
The DAX index decreased by 0.3% to 19,432.81; the CAC-40 index fell by 0.4% to 7,492.0; and the FTSE 100 index rose by 0.9% to 8,329.07.
The yield on 10-year German bonds edged lower to 2.19%, French bonds inched lower to 2.93%, the UK gilts edged down to 4.09%, and Italian bonds decreased to 3.42%.
The euro edged lower to $1.08; the British pound inched higher to $1.29; and the U.S. dollar strengthened to 86.23 Swiss cents.
Brent crude decreased $0.01 to $74.25 a barrel, and the Dutch TTF natural gas fell by €0.62 to €39.47 per MWh.
Europe Stock Movers
LVMH declined 3.7% to €601.20 after the fashion and leather goods company reported a drop in third quarter sales and warned of an "uncertain" outlook.
Overall sales declined 2% to €60.7 billion from €62.2 billion, driven by a 11% fall in wine & spirit sales to €4.2 billion, fashion & leather goods sales by 3% to €29.9 billion, and watches & jewelry sales by 5% to €7.5 billion.
However, perfumes and cosmetic sales increased 2% to €6.1 billion.
The luxury goods company blamed the sales weakness to challenges in China following "several years of exceptional post-Covid growth."
Other luxury goods makers declined following the LVMH announcement: Kering SA fell 2%, Hermes International declined 1.3%, L'Oreal dropped 2%, and Brunello Cucinelli S.p.A. eased 0.8%.
ASML Holding declined 2.5% to €651.0 after dropping as much as 15% in the previous session following the company's sales warning.
Rexel SA dropped 3.9% to €25.28, and the French distributor of electric supplies cut its 2024 outlook, citing challenging market conditions in Europe.
Stellantis NV declined 1.3% to €11.87 after the Italy-based vehicle maker reported a 20% decline in shipment in the third quarter.
Just Eat Takeaway.com declined 2.9% to €12.0, and the food delivery company reported a decline in orders in the third quarter.
Hammerson plc rose 3.5% to 320.20 pence after the property developer launched a £140 million stock repurchase plan.
Antofagasta jumped 2.8% to 1,847.0 pence after the Chile-based mining company reported a 15% increase in copper production.
Japan's Nikkei 225 Drops 2%
Benchmark indexes in Tokyo dropped sharply, tracking losses in overnight trading in New York.
The Nikkei 225 stocks average plunged nearly 2%, and the broader Topix index fell more than 1% after tech and energy stocks dropped in New York.
The S&P 500 index declined 0.8% and the Nasdaq Composite fell 1.1% after the Dutch equipment maker ASML Holding said demand recovery is more gradual than previously estimated.
Following the ASML's revised outlook, AMD, Nvidia, Broadcom, and Micron Technology declined between 4% and 7%.
ASML revised its annual revenue estimate to range between Є30 billion and Є35 billion, near the low end of its previous annual outlook.
The company said net sales in the September quarter were Є7.5 billion and new orders were Є2.6 billion, sharply lower than previously estimated.
Crude oil plunged 5% after supply-demand imbalances overshadowed Iran-Israel tensions.
Energy stocks continued to fall after crude oil prices extended losses for the third consecutive day amid worry of lack of demand growth from China and rising supply in the Middle East.
On the economic front, Japan's core machinery orders, which exclude large and volatile orders for ships and power plants, decreased 1.9% to 858.9 billion yen.
On an annual basis, private sector machinery orders fell 3.4% in August from a year ago, according to the data released by the Cabinet Office.
The orders declined for the fifth month in 2024 as orders for manufacturing fell by 2.5% to 388.4 billion yen.
The yen drifted lower to 149.26 against the U.S. dollar amid rising expectations of the Bank of Japan holding its interest rate steady at the next policy meeting.
Tokyo Metro IPO Raises $2.3 Billion
Tokyo Metro priced its shares at 1,200 yen, and the company plans to list its shares on October 23.
The widely anticipated public offering was oversubscribed more than 10 times, according to a report by Reuters.
The local rail service company is planning to sell 290.5 million shares.
The company is estimating annual revenue in the current fiscal year ending in March 2025 of 407.5 billion and net income of 52.3 billion yen.
The company is also planning to pay a cash dividend of 40 yen per share from earnings per share of 90.02 yen.
The Tokyo Metropolitan Government controls 46.6%, and Japan's central government holds the remaining 53.4% stake in the local railroad company.
Japan Stock Movers
The Nikkei 225 Stock Average decreased 1.7% to 39,225.70, and the broader Topix index dropped 1% to 2,695.51.
Tech stocks plunged following the sharp decline in leading chipmakers in overnight trading in New York.
Tokyo Electron dropped 9.2% to ¥24,310.0, Advantest fell 7% to ¥7,865.0, Disco Corp. plunged 5.7% to ¥36,160.0, and Lasertec declined 13.4% to ¥22,155.0.
East Japan Railway Company increased 0.1% to ¥2,974.0, West Japan Railway Company decreased 0.8% to ¥2,774.0, and Kyushu Railway fell 2.2% to ¥4,067.0.
Seven & I Holdings decreased 2.7% to ¥2,224.50, Isetan Mitsukoshi fell 6.6% to ¥2,353.50, and Fast Retailing added 0.1% to ¥53,580.0.
China Prepares to Raise Debt Limit Ahead of Anticipated Fiscal Measures
Stocks in Hong Kong and mainland China diverged as investors debated future policy measures following the recent economic reports.
The Hang Seng index rebounded 0.9% after falling 4.4% in the previous two sessions, and the CSI index decreased 0.3%.
Market sentiment remained weak after policymakers failed to follow through again with specific measures, following the top politicians promising "whatever it takes" measures to revive consumer spending.
In a familiar pattern witnessed over the last four years, Chinese politicians make big announcements that are not always followed by specific measures to support the property market and revive consumer sentiment.
Foreign investors are increasingly skeptical about the Chinese leadership's commitment to supporting the annual economic growth target of 5%.
Moreover, investors are dialing down annual growth expectations for the current year to below 5% and to close to 4% in 2025 as the government struggles to address structural issues amid high and rising government debt.
Despite the bold and strong rhetoric from China's politburo, the world's second-largest economy is steadily drifting to a slower annual economic growth rate nearing 2% over the next three years.
Persistent decline in property market valuations, elevated youth unemployment, and steady outflow of foreign investors are overshadowing China's success in exporting renewable energy products, electric vehicles, and consumer electronics.
Investors looked forward to comments from the housing secretary on Thursday and held out for measures to arrest the four-year property market malaise.
China's policymakers are also considering to raise debt by as much as 4 trillion yen that will facilitate exchanging local government debt and support the purchase of residential properties.
China's central government and local government debt is estimated to surpass at least 120% of gross domestic product, a sharp rise over the last five years.
China Stock Movers
The Hang Seng index increased 0.9% to 20,501.77, and the mainland-focused CSI 300 index fell 0.3% to 3,846.57.
Alibaba Group increased 0.5% to HK $100.40, Tencent Holding added 2% to HK $425.40, and JD.com fell 2.2% to HK $156.90.
Residential property developers rebounded ahead of comments from the housing secretary on Thursday.
Longfor Group rebounded 9.2% to HK $13.98, China Resources Land gained 5% to HK $27.40, and China Vanke increased 14.6% to HK $7.66.
BYD declined 0.8% to HK $273.40, Li Auto added 0.3% to HK $98.85, and Xpeng fell 1.4% to HK $43.85.
Qiniu Limited plunged as much as 50% in its Hong Kong debut after the cloud services provider priced its initial public offering at HK $1.38 per share.
Zhonghang Shangda Superalloys soared more than 10-fold in Shenzhen trading after the company priced its initial public offering at 6.88 yuan per share.