Market Update
European Markets Lacked Direction, Swiss GDP Growth Accelerated In Second Quarter
Bridgette Randall
03 Sep, 2024
London
European markets struggled for the second trading day of September as investors debated the weak macroeconomic outlook and future rate path.
Benchmark indexes in Paris, London, and Frankfurt swung around the flatline, and investors looked forward to monetary policy decisions from the U.S. Federal Reserve and the European Central Bank later in the month.
Market indexes staged a solid recovery in the previous three weeks after dropping as much as nearly 10% over a two-week period ending in the first week in August.
Investor confidence was further bolstered after inflation updates last week in the eurozone, Spain, Germany, and France indicated steady decline toward the European Central Bank's target rate of 2%.
This week investors are looking forward to the release of tourist arrivals and car sales updates in Spain and the manufacturing and service sector surveys in the Eurozone.
Investors are also awaiting the release of retail sales updates in the eurozone and Italy, the international trade balance in Germany and France, and the third and final estimate of the second quarter GDP growth in the eurozone.
Swiss GDP Growth Accelerated In Second Quarter
Swiss GDP growth in the second quarter accelerated to 0.7% from the previous month, the State Secretariat for Economic Affairs reported Tuesday.
The 2.6% increase in manufacturing sector activities was the main driver of the growth; however, net international trade contributed negatively after exports declined 5% and imports soared 13.8%.
On an annual basis, GDP growth accelerated to 1.8% from 0.6% rise in the first quarter.
Spain's Registered Unemployment Increased at the Slowest Pace Since 2016
The number of people registered as jobless in Spain increased by 21,844 or 0.9% from the previous month to 2.6 million people, the ministry of labor and social security reported Tuesday.
The unemployment in August fell to the lowest level since 2008, and generally unemployment rises in the month because of seasonal factors.
Seasonally adjusted unemployed fell by 7,724 people in August.
The registered unemployment rate fell in the agriculture sector by 2,337 people, or 2.60%, and among the group with no previous employment, it fell by 3,150 people (-1.33%).
The unemployment rose in services by 20,189 people, or 1.11%; in construction by 4,187 people, or 2.11%; and in industry by 2,995 people, or 1.50%.
Unemployment among young people under 25 years of age rose by 2,186 people, or 1.25%, in August from the previous month to 177,112, the lowest figure in the series for the month of August.
Europe Indexes and Yields
The DAX index decreased by 0.3% to 18,870.15; the CAC-40 index fell by 0.2% to 7,631.47; and the FTSE 100 index declined by 0.5% to 7,631.47.
The yield on 10-year German bonds edged higher to 2.32%, French bonds inched up to 3.04%, the UK gilts edged up to 4.03%, and Italian bonds increased to 3.71%.
The euro edged down to $1.10; the British pound inched higher to $1.31; and the U.S. dollar strengthened to 85.15 Swiss cents.
Brent crude decreased $1.69 to $75.56 a barrel, and the Dutch TTF natural gas fell by €0.95 to €37.60 per MWh.
Europe Stock Movers
Swiss Life Holding declined 0.2% to CHF 686.80 and reversed the earlier gain in the day, and the company reported better-than-expected results in the first half, driven by strong performance in its asset management and insurance operations.
Partners Group dropped 8.2% to CHF 1,123.0, and the Swiss private equity form reported weaker-than-expected quarterly results.
Wizz Air Holdings declined 0.5% to GBX 1,279.0, and the Hungarian discount airline said passenger count and load factor increased from a year ago in August.
Watches of Switzerland PLC jumped 4.2% to 395.0 pence after the UK-based luxury watches and jewelry retailer reiterated its fiscal year outlook.
Ashtead Group increased 2.6% to 5,498.68 pence after the equipment rental company reiterated its annual profit estimate.
Tokyo Indexes Struggled to Stay Above the Flatline Amid Ongoing Rate Path Worries
Akira Ito
03 Sep, 2024
Tokyo
Benchmark indexes in Tokyo hovered near the flatline as investors looked at the movement in currency trading amid rate path uncertainty.
The Nikkei 225 stock average fell 0.2%, and the broader market-focused Topix index edged higher by 0.5%.
Market indexes advanced to a one-month high after the yen dropped to a two-week low as investors debated the next move by the Bank of Japan.
The Japanese yen has been one of the most volatile currencies in 2024 after the Bank of Japan ended its negative rate policy and laid the groundwork for additional rate hikes in the near future.
Currency speculators have been forced to unwind their decade-long carry trade as the yield gap between the Japanese government bonds and U.S. Treasury notes begins to narrow.
However, stronger yen also depresses earnings of export-driven industrial and automobile companies. causing additional headwinds for the stock market.
Currency traders, who only a month ago were estimating the Japanese yen to weaken to 165 against the dollar, are now looking for the yen to rise to as high as 135.
The sharp reversal in market sentiment came about after the Bank of Japan shifted its stance to hawkish and held out for additional rate hikes in the imminent future.
The policy committee of the central bank is scheduled to announce its rate decisions at the end of the two-day meeting on September 20.
Investors are hoping that the central bank may differ its plan to raise rates after the latest manufacturing data showed a weak trend.
Japan Stock Movers
The Nikkei 225 stock average declined 0.2% to 38,618.76, and the Topix index rose 0.5% to 2,729.96.
Industrial companies traded down amid the uncertainties linked to the yen, and semiconductor equipment makers edged lower amid high valuation worries.
Advantest decreased 2.2% to ¥6,652.0, Tokyo Electron declined 1.5% to ¥25,145.0, Lasertec decreased 3.4% to ¥25,145.0, and Screen Holdings jumped 0.06% to ¥10,615.0.
Fanuc Corporation decreased 0.8% to ¥4,262.0, Kawasaki Heavy Industries fell 2.2% to ¥5,205.0, IHI Corp. declined 0.4% to ¥6,661.0.
Toyota Motor decreased 0.3% to ¥2,772.0, Honda Motor declined 0.4% to ¥1,604.50, and Nissan Motor edged up 0.4% to ¥429.60.
Banks traded higher amid speculation that the Bank of Japan is more likely to differ its rate path later in the year following the weak manufacturing survey data.
Mitsubishi UFJ Financial Group gained 3.3% to ¥1,599.0, Sumitomo Mitsui gained 3.2% to ¥9,910.0, and Mizuho Financial Group gained 2.2% to ¥3,137.0.
Hong Kong and Shanghai Stocks Turned Lower Amid Weak Earnings Outlook
Li Chen
03 Sep, 2024
Hong Kong
Stocks in Shanghai and Hong Kong struggled for the second trading day in September amid weak investor sentiment.
The Hang Seng index declined 0.3%, and the CSI index struggled to rise above the flatline in choppy trading.
Investors sold stocks after banks and real estate companies reported weak interim results and estimated a weaker outlook for the second half.
The Hang Seng index has struggled to hold on to its 4% gain in August after New Word Development estimated annual loss, following a string of weak results from other developers including China Vanke, China Resources Land, and Kaisa Group.
Banks were also under pressure after Industrial and Commercial Bank of China and China Construction Bank reported weak results.
Investor confidence remained weak after China's manufacturing sector, one of the key drivers of the economic growth, contracted for the fourth month in a row in August.
Moreover, foreign investors continue to lighten their stock holdings amid poor earnings visibility, fragile economic recovery, and a lack of strong policy response.
China Stock Movers
The Hang Seng index decreased 0.3% to 17,627.05, and the CSI 300 index edged up 0.01% to 3,266.44.
China Vanke increased 2.6% to HK $3.97, China Resources Land gained 1% to HK $21.15, and New World Development fell 1.9% to HK $6.70.
Industrial and Commercial Bank of China decreased 2.8% to HK $4.25, China Construction Bank fell 1.7% to HK $5.34, and Bank of China dropped 2.2% to HK $3.42.
Tech stocks traded higher and bucked the market weakness as investors hope the intense price war among leading companies will end soon.
Baidu decreased 0.9% to HK $81.25, Meituan rose 1.3% to HK $117.80, Alibaba Group gained 0.7% to HK $80.05, and JD.com fell 0.5% to HK $104.60.
Sanergy Group plunged a whopping 98% to 39 HK cents after the Securities and Futures Commission of Hong Kong said 90.2% of the company's shares are held by a group of investors, raising the risk of elevated volatility from a highly concentrated shareholder base.
Two companies listed their shares in mainland China as investors warmed up to initial public offerings.
Shanghai InnoStar Bio-tech soared 40% to 20.80 yuan in Shanghai trading, and Zhengzhou Suda Industries Machinery Service soared 39% to 43.37 yuan in Shenzhen trading.
India Movers: IREDA, NMDC, Trent, Vedanta
Arun Goswami
03 Sep, 2024
Mumbai
Benchmark indexes on Dalal Street traded around the flatline as investors reassessed the economic growth and inflation outlook ahead of monetary policy decisions from major central banks in the U.S., Europe, and Japan this month.
The Sensex index increased by 0.1% to 82,652.69, and the Nifty index rose 0.1% to 25,313.40.
On the Mumbai stock exchange, 125 stocks traded at their 52-week highs, and 10 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds inched higher to 6.87%, and the Indian rupee weakened to 83.94 against the U.S. dollar.
Vedanta Ltd declined 1% to ₹464.0, and the company's board approved a third interim dividend of ₹20 per share, following previous dividends of ₹11 and ₹4 per share.
After the third dividend, the company has paid out to shareholders a total of ₹13,474 crore.
Indian Renewable Energy Development Agency decreased 1% to ₹239.10, and the company plans to raise ₹25,000 crore through debt and ₹4,500 crore through an equity offering.
The renewable energy company is also seeking the central government's approval to sell as much as 10% of its stake to raise additional funds.
NMDC Ltd. decreased 2.5% to ₹217.10, and the company said iron ore production in August declined 9.9% to 30.7 lakh tons from 34.1 lakh tons in the corresponding month a year earlier.
Iron ore production in the current fiscal year's first five months to August declined to 1.44 crore tons compared to 1.6 crore tons in the similar period a year ago.
Trent Ltd. decreased 0.1% to ₹7,151.95, and investor Siddhartha Yog acquired a 0.3% stake in the retailer for ₹718 crore.
Global Markets Lacked Direction Amid Rate Path Uncertainties In U.S., Europe, and Japan
Alexander Garcia
02 Sep, 2024
Miami
Stocks struggled to advance in Europe, Japan, and China on the first trading day of September as investors reassessed the economic growth outlook and rate path.
In New York, financial markets are closed on Monday for the Labor Day holiday.
Global market indexes rebounded in August after suffering steep losses in the first week of the month, following the easing of worries about the U.S. economic slowdown and weakening labor market conditions.
Investor sentiment rebounded over the last three weeks after a string of positive economic reports indicated healthy labor market conditions and steady economic growth coupled with weakening inflation.
Moreover, Fed Chair Jerome Powell signaled that policymakers are ready to lower rates if the current downward trend in inflation continues, but he fell short of announcing the amount and timing of the rate cut.
In the week ahead, investors in the U.S. are looking forward to the release of private manufacturing and services surveys, nonfarm payroll, the JOLT survey, factory orders, and international trade balances.
European Markets Traded Down After China Reported Weakness In Manufacturing Activities
Stocks struggled on the first day of September after recording sharp gains in August as investors reassessed the economic outlook and future rate path.
Benchmark indexes in Paris, London, and Frankfurt traded around the flatline after China's manufacturing activities continued to shrink for the fourth month in a row.
Investors also turned cautious ahead of rate decisions by the European Central Bank in September and the Federal Reserve rate announcements on September 18.
Market indexes in Europe plunged as much as 10% over the two-week period ending in the first week in August on the worry that the U.S. economy may slowdown amid weakening labor market conditions.
However, those expectations turned out to be not true following a string of subsequent positive reports on the labor market, factory orders, and inflation.
Market indexes rebounded over the last three weeks, and the benchmark index in Germany traded at a new high last week.
In Europe, investors are looking forward to the release of tourist arrivals and car sales update in Spain, the manufacturing and service sector surveys in the eurozone.
Investor are also awaiting the release of retail sales updates in the eurozone and Italy, international trade balance in Germany and France, and the third and the final estimate of the second quarter GDP growth in the eurozone.
Europe Indexes and Yields
The DAX index increased by 0.1% to 18,930.85; the CAC-40 index added by 0.2% to 7,646.42; and the FTSE 100 index fell by 0.2% to 8,363.84.
In the previous week, the DAX index advanced 2%, the CAC-40 index declined 1.1%, and the FTSE 100 index gained 1.5%.
The yield on 10-year German bonds edged higher to 2.32%, French bonds inched up to 3.04%, the UK gilts edged up to 4.03%, and Italian bonds increased to 3.71%.
The euro edged down to $1.10; the British pound inched higher to $1.31; and the U.S. dollar weakened to 85.05 Swiss cents.
Brent crude increased $0.46 to $77.87 a barrel, and the Dutch TTF natural gas rose by €0.85 to €38.55 per MWh.
Europe Stock Movers
Atos SE decreased 2.9% to €0.80, and the French information technology company lowered its annual revenue outlook citing current weakness in its key markets.
Rightmove soared 21% to 672.18 pence after the Australian real estate platform operator REA Group confirmed that it is considering a cash and share offer for the UK-based real estate online portal.
Kainos Group PLC dropped 14.7% to 950.0 pence after the Northern Ireland-based company confirmed its annual revenue is likely to be lower than the current market estimates.
Concurrent Technologies PLC jumped 5.3% to 128.50 pence, and the UK-based maker of embedded solutions for mission-critical applications released record interim results.
Danske Bank increased 1.2% to DKK 213.20, and the Danish bank appointed Cecile Hillary as new chief financial officer to succeed retiring Stephan Engels.
Luxury stocks in France and automobile makers in Germany traded down after China's manufacturing activities continued to shrink for the fourth month in a row.
Kering SA decreased 2.2% to €253.45, Hermes International declined 1% to €2,147.0, and LVMH eased 1% to €667.40.
Mercedes Benz decreased 1% to €61.67, BMW fell 1% to €83.0, and Ferrari declined 0.4% to €446.10.
Japan Indexes Struggled to Advance, Capital Spending In Second Quarter Accelerated
Benchmark indexes in Tokyo opened higher and extended gains of the previous month but face selling pressure in the afternoon trading.
The Nikkei 225 and Topix indexes closed nearly unchanged after market indexes struggled to hold early lead.
Market sentiment weakened after capital spending for plant and equipment in the second quarter rose at a slower-than-expected pace of 7.4%, the Ministry of Finance reported Monday.
Capital spending stayed positive for the thirteenth quarter in a row and accelerated from an increase of 6.8% in the first quartet.
Electricity production and transmission spending soared nearly 32%, followed by an increase of 23.7% in real estate and 20.6% in transportation.
However, fabricated metal products spending declined 25.1%, machinery production fell by 15.6%, and wholesale and retail trade fell 8.9%.
The final update on the manufacturing activities showed activities remained in contraction, according to the S&P Global Market Intelligence.
The final au Jibun Bank Japan manufacturing purchasing managers' index edged up to 49.8 in August from 49.1 in July, and the index improved from 49.5 reported in the preliminary estimate.
The index stayed below 50, the level that separates expansion from contraction.
Weak new order trends from key customers in China and South Korea continued to weigh on the overall index.
The yen edged slightly lower to 146.45 against the U.S. dollar, supporting the early rise in benchmark indexes.
In Asia, investors are looking forward to the release of foreign exchange reserve in Japan, a private survey of service sector, and growth in bank loan, deposits, and foreign exchange in India.
Japan Stock Movers
The Nikkei 225 stock average increased 0.1% to 38,680.61 and the Topix index rose 0.09% to 2,714.96.
Banks edged higher in Tokyo in Monday's trading as investors awaited the Bank of Japan's monetary policy decisions later in the month.
Sumitomo Mitsui Financial increased 0.5% to ¥9,597.0, Mitsubishi UFJ gained 1.3% to ¥1,548.50, and Mizuho Financial Group jumped 1.7% to ¥3,059.0.
IHI Corp. increased 5.5% to ¥6,688.0, Kawasaki Heavy Industries advanced 3.5% to ¥5,321.0, Yakasawa Electric edged higher 1.4% to ¥4,900.0, and Tokyo Electric advanced 0.5% to ¥698.10.
Seven & I Holding advanced 2.8% to ¥2,156.50, Takashimaya gained 2.7% to ¥1,146.50, Fast Retailing gained 0.4% to ¥46,820.0, and Isetan Mitsukoshi jumped 2% to ¥2,236.50.
Sumitomo Pharma declined 6% to ¥628.0, Chugai Pharma decreased 6% to ¥6,936.0, and Toto fell 2.9% to ¥4,911.0.
China Indexes Drop 1% After Manufacturing Activities Contracted for the Fourth Consecutive Month
Stock market sentiment soured after manufacturing activities contracted and weak quarterly results from leading property developers.
The Hang Seng and CSI 300 indexes dropped more than 1%, following a rebound of nearly 4% in April, after the official manufacturing survey showed activities contracted for the fourth month in a row in August.
The official Manufacturing Purchasing Managers' Index fell to 49.1 in August, down from 49.4 in July, the National Bureau of Statistics reported Monday.
The non-manufacturing survey, which includes activities in service and construction sectors, edged slightly higher to 50.3 from 50.2 in July.
Caixin Manufacturing PMI, which mostly focuses on private and smaller companies, held at 50.4 in August.
A reading above 50 indicates expansion, and below 50 shows contraction in activities.
China's manufacturing sector is going through a rough patch amid restrictive economic policy and an uncertain macroeconomic outlook amid fragile economic recovery over the last nine months.
Market sentiment was also weak after two China Vanke reported its first interim loss in two decades, and China Construction Bank and Industrial and Commercial Bank of China reported weaker-than-estimated quarterly results.
China Stock Movers
The Hang Seng index declined 1.6% to 17,700.40 and the CSI 300 index dropped 1.2% to 3,280.55.
New World Development Company dropped 13% to HK $6.82 after the real estate developer estimated annal loss.
China Vanke declined 4.4% to HK $3.93, and the state-controlled residential real estate developer reported a net loss of 9.85 billion yuan in the first six months of 2024.
The company swung from a net profit of 9.87 billion yuan in the six-month period in 2023 after revenue dropped 29% to 142.8 billion yuan.
Contracted home sales in the period plunged 37% to 127 billion yuan.
China Vanke, along with other leading mainland developers Shimao Group, Kaisa Group, and Fantasia, reported large losses last Thursday.
China Resources Land declined 4.5% to HK $21.15 and China Overseas Land dropped 5.3% to HK $11.72.
China Shenhua Energy eased 0.5% to HK $33.55 after the coal producer said net income in the first half declined 11% from a year ago.
ICBC declined 3.2% to HK $4.35 and China Construction Bank dropped 1.8% to HK $5.42 after the two leading banks reported a 2% decline in profit in the first half.
Europe Movers: Atos, Concurrent Technology, Danske Bank, Rightmove
Inga Muller
02 Sep, 2024
Frankfurt
European markets struggled and traded around the flatline driven by the weakness in automobile and luxury stocks after China's manufacturing activities contracted for the fourth month in a row.
The DAX index decreased by 0.1% to 18,887.63; the CAC-40 index decreased by 0.1% to 7,622.82; and the FTSE 100 index rose by 0.1% to 8,369.05.
In the previous week, the DAX index advanced 2%, the CAC-40 index declined 1.1%, and the FTSE 100 index gained 1.5%.
The yield on 10-year German bonds edged higher to 2.32%, French bonds inched up to 3.04%, the UK gilts edged up to 4.03%, and Italian bonds increased to 3.71%.
Atos SE decreased 2.9% to €0.80, and the French information technology company lowered its annual revenue outlook citing current weakness in its key markets.
Rightmove soared 21% to 672.18 pence after the Australian real estate platform operator REA Group confirmed that it is considering a cash and share offer for the UK-based real estate online portal.
Kainos Group PLC dropped 14.7% to 950.0 pence after the Northern Ireland-based company confirmed its annual revenue is likely to be lower than the current market estimates.
Concurrent Technologies PLC jumped 5.3% to 128.50 pence, and the UK-based maker of embedded solutions for mission-critical applications released record interim results.
Danske Bank increased 1.2% to DKK 213.20, and the Danish bank appointed Cecile Hillary as new chief financial officer to succeed retiring Stephan Engels.
Luxury stocks in France and automobile makers in Germany traded down after China's manufacturing activities continued to shrink for the fourth month in a row.
Kering SA decreased 2.2% to €253.45, Hermes International declined 1% to €2,147.0, and LVMH eased 1% to €667.40.
Mercedes Benz decreased 1% to €61.67, BMW fell 1% to €83.0, and Ferrari declined 0.4% to €446.10.
European Markets Traded Down After China Reported Weakness In Manufacturing Activities
Bridgette Randall
02 Sep, 2024
London
Stocks struggled on the first day of September after recording sharp gains in August as investors reassessed the economic outlook and future rate path.
Benchmark indexes in Paris, London, and Frankfurt traded around the flatline after China's manufacturing activities continued to shrink for the fourth month in a row.
Investors also turned cautious ahead of rate decisions by the European Central Bank in September and the Federal Reserve rate announcements on September 18.
Market indexes in Europe plunged as much as 10% over the two-week period ending in the first week in August on the worry that the U.S. economy may slowdown amid weakening labor market conditions.
However, those expectations turned out to be not true following a string of subsequent positive reports on the labor market, factory orders, and inflation.
Market indexes rebounded over the last three weeks, and the benchmark index in Germany traded at a new high last week.
Europe Indexes and Yields
The DAX index decreased by 0.1% to 18,887.63; the CAC-40 index decreased by 0.1% to 7,622.82; and the FTSE 100 index rose by 0.1% to 8,369.05.
In the previous week, the DAX index advanced 2%, the CAC-40 index declined 1.1%, and the FTSE 100 index gained 1.5%.
The yield on 10-year German bonds edged higher to 2.32%, French bonds inched up to 3.04%, the UK gilts edged up to 4.03%, and Italian bonds increased to 3.71%.
The euro edged down to $1.10; the British pound inched higher to $1.31; and the U.S. dollar weakened to 85.05 Swiss cents.
Brent crude increased $0.15 to $77.06 a barrel, and the Dutch TTF natural gas rose by €0.69 to €38.71 per MWh.
Europe Stock Movers
Atos SE decreased 2.9% to €0.80, and the French information technology company lowered its annual revenue outlook citing current weakness in its key markets.
Rightmove soared 21% to 672.18 pence after the Australian real estate platform operator REA Group confirmed that it is considering a cash and share offer for the UK-based real estate online portal.
Kainos Group PLC dropped 14.7% to 950.0 pence after the Northern Ireland-based company confirmed its annual revenue is likely to be lower than the current market estimates.
Concurrent Technologies PLC jumped 5.3% to 128.50 pence, and the UK-based maker of embedded solutions for mission-critical applications released record interim results.
Danske Bank increased 1.2% to DKK 213.20, and the Danish bank appointed Cecile Hillary as new chief financial officer to succeed retiring Stephan Engels.
Luxury stocks in France and automobile makers in Germany traded down after China's manufacturing activities continued to shrink for the fourth month in a row.
Kering SA decreased 2.2% to €253.45, Hermes International declined 1% to €2,147.0, and LVMH eased 1% to €667.40.
Mercedes Benz decreased 1% to €61.67, BMW fell 1% to €83.0, and Ferrari declined 0.4% to €446.10.
Japan Indexes Struggled to Advance, Capital Spending In Second Quarter Accelerated
Akira Ito
02 Sep, 2024
Tokyo
Benchmark indexes in Tokyo opened higher and extended gains of the previous month but face selling pressure in the afternoon trading.
The Nikkei 225 and Topix indexes closed nearly unchanged after market indexes struggled to hold early lead.
Market sentiment weakened after capital spending for plant and equipment in the second quarter rose at a slower-than-expected pace of 7.4%, the Ministry of Finance reported Monday.
Capital spending stayed positive for the thirteenth quarter in a row and accelerated from an increase of 6.8% in the first quartet.
Electricity production and transmission spending soared nearly 32%, followed by an increase of 23.7% in real estate and 20.6% in transportation.
However, fabricated metal products spending declined 25.1%, machinery production fell by 15.6%, and wholesale and retail trade fell 8.9%.
The final update on the manufacturing activities showed activities remained in contraction, according to the S&P Global Market Intelligence.
The final au Jibun Bank Japan manufacturing purchasing managers' index edged up to 49.8 in August from 49.1 in July, and the index improved from 49.5 reported in the preliminary estimate.
The index stayed below 50, the level that separates expansion from contraction.
Weak new order trends from key customers in China and South Korea continued to weigh on the overall index.
The yen edged slightly lower to 146.45 against the U.S. dollar, supporting the early rise in benchmark indexes.
Japan Stock Movers
The Nikkei 225 stock average increased 0.1% to 38,680.61 and the Topix index rose 0.09% to 2,714.96.
Banks edged higher in Tokyo in Monday's trading as investors awaited the Bank of Japan's monetary policy decisions later in the month.
Sumitomo Mitsui Financial increased 0.5% to ¥9,597.0, Mitsubishi UFJ gained 1.3% to ¥1,548.50, and Mizuho Financial Group jumped 1.7% to ¥3,059.0.
IHI Corp. increased 5.5% to ¥6,688.0, Kawasaki Heavy Industries advanced 3.5% to ¥5,321.0, Yakasawa Electric edged higher 1.4% to ¥4,900.0, and Tokyo Electric advanced 0.5% to ¥698.10.
Seven & I Holding advanced 2.8% to ¥2,156.50, Takashimaya gained 2.7% to ¥1,146.50, Fast Retailing gained 0.4% to ¥46,820.0, and Isetan Mitsukoshi jumped 2% to ¥2,236.50.
Sumitomo Pharma declined 6% to ¥628.0, Chugai Pharma decreased 6% to ¥6,936.0, and Toto fell 2.9% to ¥4,911.0.
China Indexes Drop 1% After Manufacturing Activities Contracted for the Fourth Consecutive Month
Li Chen
02 Sep, 2024
Hong Kong
Stock market sentiment soured after manufacturing activities contracted and weak quarterly results from leading property developers.
The Hang Seng and CSI 300 indexes dropped more than 1%, following a rebound of nearly 4% in April, after the official manufacturing survey showed activities contracted for the fourth month in a row in August.
The official Manufacturing Purchasing Managers' Index fell to 49.1 in August, down from 49.4 in July, the National Bureau of Statistics reported Monday.
The non-manufacturing survey, which includes activities in service and construction sectors, edged slightly higher to 50.3 from 50.2 in July.
Caixin Manufacturing PMI, which mostly focuses on private and smaller companies, held at 50.4 in August.
A reading above 50 indicates expansion, and below 50 shows contraction in activities.
China's manufacturing sector is going through a rough patch amid restrictive economic policy and an uncertain macroeconomic outlook amid fragile economic recovery over the last nine months.
Market sentiment was also weak after two China Vanke reported its first interim loss in two decades, and China Construction Bank and Industrial and Commercial Bank of China reported weaker-than-estimated quarterly results.
China Stock Movers
The Hang Seng index declined 1.6% to 17,700.40 and the CSI 300 index dropped 1.2% to 3,280.55.
New World Development Company dropped 13% to HK $6.82 after the real estate developer estimated annal loss.
China Vanke declined 4.4% to HK $3.93, and the state-controlled residential real estate developer reported a net loss of 9.85 billion yuan in the first six months of 2024.
The company swung from a net profit of 9.87 billion yuan in the six-month period in 2023 after revenue dropped 29% to 142.8 billion yuan.
Contracted home sales in the period plunged 37% to 127 billion yuan.
China Vanke, along with other leading mainland developers Shimao Group, Kaisa Group, and Fantasia, reported large losses last Thursday.
China Resources Land declined 4.5% to HK $21.15 and China Overseas Land dropped 5.3% to HK $11.72.
China Shenhua Energy eased 0.5% to HK $33.55 after the coal producer said net income in the first half declined 11% from a year ago.
ICBC declined 3.2% to HK $4.35 and China Construction Bank dropped 1.8% to HK $5.42 after the two leading banks reported a 2% decline in profit in the first half.
India Movers: Bandhan Bank, Eicher Motors, HDFC Asset Management, Gujarat Gas, Insecticides India, Tata Motors, TVS Motor
Arun Goswami
02 Sep, 2024
Mumbai
Stocks in Mumbai edged higher following the continued strength in international markets.
TVS Motor, Tata Motors, and Eicher Motors reported a decline in vehicle sales in August.
The Sensex index increased by 0.3% to 82,612.60, and the Nifty index rose 0.3% to 25,315.05.
On the Mumbai stock exchange, 122 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 inched higher to 6.86%, and the Indian rupee weakened to 83.87 against the U.S. dollar.
Gujarat Gas Limited soared 5% to ₹637.15, and the company's board approved the amalgamation of Gujarat State Petroleum Corporation, Gujarat State Petronet, and GSPC Energy with the company.
The company's gas transmission business will be listed as a separate company, GSPL Transmission Limited.
TVS Motor Company increased 2.1% to ₹2,822.0, and the company said two-wheeler sales in August jumped 13% to 3,91,588 units from 3,45,848 units a year ago.
Tata Motors decreased 1.1% to ₹1,098.95, and the company said vehicle sales in August decreased 8.1% to 71,693 units, driven by a decline of commercial vehicle sales by 15% to 27,107 units and the fall in passenger vehicle sales by 3.2% to 44,486 units.
GPT Infraprojects decreased 1.5% to ₹177.10 after the company won a construction project from South Eastern Railway for a road project near Kolkata.
Bandhan Bank increased 0.5% to ₹201.43, and UBS Principal Capital Asia acquired a 1.19% stake in the bank at an average price of ₹200.27 per share for a total of ₹354.6 crore.
Insecticides India Ltd. decreased 5.6% to ₹940.80, and the company's board has approved its stock buyback for ₹50 crore at ₹1,000 per share from shareholders on record on September 11.
HDFC Asset Management Company increased 1.3% to ₹4,458.0, and Life Insurance Corporation lowered its stake in the company to 2.88% from 4.91% over the two-month period ending in August.
After Volatile August, S&P 500 Index Extends Rally to Fourth Consecutive Month
Barry Adams
30 Aug, 2024
New York City
Market indexes advanced on the final trading day of August and are set to end the volatile month on a higher level.
The S&P 500 index trimmed its weekly losses to 0.2%, and the Nasdaq Composite trimmed its weekly losses to less than 1%.
In August, the S&P 500 index advanced 2.0% and the Nasdaq Composite gained 0.2%.
Investor sentiment recovered from sharp losses of as much as 10% over the two-week period ending in the first week in August, driven by the fears of an economic slowdown and weakening labor market conditions.
However, those fears turned out to be unfounded after a string of positive economic data in the second half of the month, fueling a market rally that lasted three weeks.
Market sentiment also improved after Fed Chair signaled "monetary policy adjustment," providing another boost to the broader market rally last week.
On Friday, the Fed's alternative measure of inflation highlighted mixed picture on the inflation front.
The Core Personal Consumption Expenditure Price Index increased on a monthly basis by 0.2%, matching the increase in the previous month, the Bureau of Economic Analysis reported Friday.
The overall index rose 0.2% on a monthly basis, matching expectations set by several economists.
On an annual basis, the overall PCE price index advanced 2.5%, matching the rate in the previous month, indicating prices are still rising at a pace faster than the Fed's 2% target rate.
The core PCE price index, which excludes volatile food and energy prices, rose 2.6% and held steady for the third month in a row.
Investors are still anticipating that the Federal Reserve is ready to start its interest rate cycle as early as next month, but those hopes could be dashed if policymakers decide to wait for more evidence for the downward path for inflation.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.6% to 5,627.04, the Nasdaq Composite rose 0.9% to 17,668.90, and the Russell 2000 index gained 0.6% to 2,202.98.
The yield on 2-year Treasury notes edged higher to 3.92%, 10-year Treasury notes increased to 3.86%, and 30-year Treasury bonds inched lower to 4.14%.
WTI crude oil increased $0.01 to $75.92 a barrel, and natural gas prices edged down 3 cents to $2.16 a thermal unit.
Gold rose by $2.20 to $2,521.75 an ounce, and silver increased by $0.20 to $29.57.
The dollar index, which weighs the US currency against a basket of foreign currencies, edged higher to 101.36.
U.S. Stock Movers
Lululemon gained 3.9% to $269.0, and the athletic retailer reported mixed quarterly results.
Revenue in the latest quarter increased to $2.37 billion, and diluted earnings per share were $3.25, beating the estimates by at least 20 cents.
However, comparable sales increase slowed sharply to 2% from as high as 7% in the fourth quarter of 2023 and flat in the first quarter of this year.
Ulta Beauty dropped 7.1% to $341.50, and the cosmetic retailer reported weaker-than-estimated second quarter sales, and the company lowered its full-year outlook after comparable store sales declined.
Dell Technologies increased 5.2% to $116.44, and the personal computer and data server company reported earnings ahead of market expectations.
MongoDB soared 17% to $289.10, and the database developer's revenue and earnings were ahead of market expectations.
Revenue in the fiscal second-quarter ending in July increased 13% to $478.1 million, net loss advanced to $54.5 million from $37.6 million, and diluted loss per share expanded to 74 cents from 53 cents a year earlier.
The company guided full-year revenue to range between $1.92 billion and $1.93 billion, from the previous range between $1.88 billion and $1.90 billion.
The company also lifted its adjusted earnings per share outlook to between $2.33 and $2.47 from the previous estimate between $2.15 and $2.30.
Gap Inc. declined 1.5% to $22.57 after the specialty apparel retailer reported revenue and earnings that surpassed market expectations.
Revenue in the quarter that ended on August 3 rose 5% to $3.72 billion from $3.55 billion, net income advanced to $206 million from $117 million, and diluted earnings per share rose to 54 cents from 32 cents a year ago.
U.S. Movers: Dell, Gap, Lululemon, MongoDB, Ulta Beauty
Scott Peters
30 Aug, 2024
New York City
Lululemon gained 3.9% to $269.0, and the athleisure retailer reported mixed quarterly results.
Revenue in the latest quarter increased to $2.37 billion, and diluted earnings per share were $3.25, beating the estimates by at least 20 cents.
However, comparable sales increase slowed sharply to 2% from as high as 7% in the fourth quarter of 2023 and flat in the first quarter of this year.
Ulta Beauty dropped 7.1% to $341.50, and the cosmetic retailer reported weaker-than-estimated second quarter sales.
The cosmetic retailer lowered its full-year sales outlook, following the decline in comparable store sales.
Dell Technologies increased 5.2% to $116.44, and the personal computer and data server company reported earnings ahead of market expectations.
MongoDB soared 17% to $289.10, and the database developer's revenue and earnings were ahead of market expectations.
Revenue in the fiscal second-quarter ending in July increased 13% to $478.1 million, net loss advanced to $54.5 million from $37.6 million, and diluted loss per share expanded to 74 cents from 53 cents a year earlier.
The company guided full-year revenue to range between $1.92 billion and $1.93 billion, from the previous range between $1.88 billion and $1.90 billion.
The company also lifted its adjusted earnings per share outlook to between $2.33 and $2.47 from the previous estimate between $2.15 and $2.30.
Gap Inc. declined 1.5% to $22.57 after the specialty apparel retailer reported revenue and earnings that surpassed market expectations.
Revenue in the quarter that ended on August 3 rose 5% to $3.72 billion from $3.55 billion, net income advanced to $206 million from $117 million, and diluted earnings per share rose to 54 cents from 32 cents a year ago.
Europe Movers: Ambu, Banks, ThyssenKrupp
Inga Muller
30 Aug, 2024
Frankfurt
European markets advanced for the third consecutive week, and inflation in the region edged lower.
But the core rate of inflation stayed steady, suggesting a difficult road ahead for policymakers. The jobless rate eased in the eurozone and held steady in Germany.
The DAX index increased by 0.2% to 18,947.56; the CAC-40 index rose by 0.5% to 7,678.25; and the FTSE 100 index rose by 0.3% to 8,406.11.
For the week, the DAX index advanced 2%, the CAC-40 index declined 1.1%, and the FTSE 100 index gained 1.5%.
ThyssenKrupp AG decreased 0.3% to €3.22, and the chairman and CEO of the steel division and five board members resigned after disagreeing with the parent company about the future direction of the business.
Ambu plunged 14.5% to DKK 131.30, and the Danish medical device company reported disappointing results in its fiscal third quarter.
Revenue increased 15.7% to DKK 1.38 billion, and operating earnings before special items rose to DKK 178 million from DKK 91 million.
Endoscopy solutions' organic revenue growth slowed to 18%, driven by a 9.9% increase in the pulmonology division, and anesthesia and patient monitoring organic revenue increased by 10.9%.
Banks advanced in the region after lower inflation stoked speculation of a lower interest rate in the eurozone.
Societe Generale increased 1.2% to €21.93, BNP Paribas rose 0.8% to €62.61, Intesa Sanpaolo added 1.3% to €3.78, UniCredit edged higher 0.8% to €37.18, and Deutsche Bank gained 0.5% to €14.75.
European Markets Hover Near Record Highs After Weakening Inflation Raised Rate-cut Prospects
Bridgette Randall
30 Aug, 2024
London
European markets edged higher in Friday's trading as investors reviewed the slew of regional economic updates.
Benchmark indexes in Frankfurt, Paris, and London advanced and extended weekly gains after investors reviewed the latest updates on inflation, GDP growth, and labor markets.
The eurozone inflation slowed to 2.2% in August from 2.6% in July, according to the preliminary estimate released by Eurostat.
The decline in inflation was driven by the sustained cooling of volatile energy prices from a year ago, but inflation in the broader economy remained well entrenched and above the central bank's target rate of 2%.
The core rate of inflation, which excludes energy and unprocessed food, remained unchanged at 2.8%, indicating a difficult road ahead for policymakers.
On the labor market front, the unemployment rate in the eurozone eased by 0.2 percentage points to 6.4%, a separate report by Eurostat showed on Friday.
In addition, Germany's jobless rate stayed at a three-year high of 6.0% in August, and the unemployed increased by 2,000 from the previous month to 2.80 million after adjusting for seasonal factors.
On an unadjusted basis, the jobless count increased by 63,000 to 2.87 million, a three-and-a-half-year high amid tightening labor demand.
France's inflation cooled to 1.9% in August from 2.3% in the previous month, according to the latest data released by the INSEE.
France's statistical agency, INSEE, also said in a separate report that GDP in the second quarter rose at a slower pace of 0.2%.
Europe Indexes and Yields
The DAX index increased by 0.2% to 18,947.56; the CAC-40 index rose by 0.5% to 7,678.25; and the FTSE 100 index rose by 0.3% to 8,406.11.
For the week, the DAX index advanced 2%, the CAC-40 index declined 1.1%, and the FTSE 100 index gained 1.5%.
The yield on 10-year German bonds edged higher to 2.25%, French bonds inched down to 2.97%, the UK gilts edged up to 3.97%, and Italian bonds increased to 3.64%.
The euro edged down to $1.10; the British pound inched higher to $1.31; and the U.S. dollar weakened to 84.89 Swiss cents.
Brent crude decreased $0.11 to $78.94 a barrel, and the Dutch TTF natural gas rose by €0.65 to €39.93 per MWh.
Europe Stock Movers
ThyssenKrupp AG decreased 0.3% to €3.22, and the chairman and CEO of the steel division and five board members resigned after disagreeing with the parent company about the future direction of the business.
Ambu plunged 14.5% to DKK 131.30, and the Danish medical device company reported disappointing results in its fiscal third quarter.
Revenue increased 15.7% to DKK 1.38 billion, and operating earnings before special items rose to DKK 178 million from DKK 91 million.
Endoscopy solutions' organic revenue growth slowed to 18%, driven by a 9.9% increase in the pulmonology division, and anesthesia and patient monitoring organic revenue increased by 10.9%.
Banks advanced in the region after lower inflation stoked speculation of a lower interest rate in the eurozone.
Societe Generale increased 1.2% to €21.93, BNP Paribas rose 0.8% to €62.61, Intesa Sanpaolo added 1.3% to €3.78, UniCredit edged higher 0.8% to €37.18, and Deutsche Bank gained 0.5% to €14.75.
Japan Indexes Erase August Losses, Jobless Rate Advanced to 11-month High, Retail Sales Growth Slowed
Akira Ito
30 Aug, 2024
Tokyo
Benchmark indexes in Tokyo advanced in Friday's trading, and investors reviewed the latest updates on retail sales, the jobless rate, and Tokyo-area inflation.
The Nikkei 225 and Topix indexes gained 0.7% and closed nearly unchanged in August after falling sharply earlier in the month.
Stocks plunged in the first week of August following the Bank of Japan's hawkish shift to an interest rate stance, leading to the yen's rally and the unwinding of the carry trade.
Investor sentiment recovered over the next three weeks after worries of a U.S. economic slowdown eased and the central bank reassured markets that it would not raise rates further when markets are unstable.
The yen traded at 144.93 against the U.S. dollar, nearly unchanged from the previous session, but the possibility of a rate hike by the Bank of Japan in three weeks loomed.
Japan's unemployment rate increased to 2.7% in July from 2.5% in the previous month, the Ministry of Internal Affairs and Communications reported Friday.
The jobless rate rose to the highest level since August 2023.
The number of unemployed increased by 110,000 to 1.87 million, while employment fell by 200,000 to 67.66 million, and the labor force shrank by 90,000 to 69.54 million.
At the same time, the jobs-to-applicants ratio increased to 1.24 from 1.23 in June.
Core consumer price inflation for the Ku-area of Tokyo increased for the fourth month in a row and increased to a six-month high, the Statistics Bureau of Japan reported Friday.
Core consumer price inflation increased to 2.4% in August from 2.2% in July and matched the level in March.
Meanwhile, overall consumer price inflation rose to 2.6% in August from 2.2% in July.
Retail sales in Japan advanced 2.6% from a year ago in July, slowing from a 3.8% increase in June, the Ministry of Economy, Trade & Industry reported in a separate report on Friday.
On a monthly basis, retail sales advanced 0.2%, slower than 0.6% in the previous month.
Retail sales advanced for the 28th month in a row as rising wages contributed to the growth in retail sales, driven by a 9.6% increase in non-store sales, a 6.3% rise in automobile sales, and pharmaceuticals & cosmetics by 5.1%.
Industrial production in July increased 2.7%, the Ministry of Economy, Trade & Industry said in a separate report on Friday.
The ministry also adjusted its production growth estimate and acknowledged the volatile nature of the series.
Industrial production is expected to slow to 2.2% in August and shrink 3.3% in September.
Japan Stock Movers
The Nikkei 225 stock average increased 0.7% to 38,647.75, and the Topix index gained 0.73% to 2,712.63.
Tech stocks, banks, and industrial conglomerates were among the leading gainers in Tokyo in Friday's trading.
Tokyo Electron, Avantest, Screen Holdings, and Lasertec rose between 0.4% and 2%.
Retailers also participated in Friday's market rally.
Fast Retailing Co. increased 0.3% to ¥46,650.0, Aeon Co. declined 1.8% to ¥3,649.0, Isetan Mitsukoshi rose 0.5% to ¥2,193.0, and Seven & I decreased 0.9% to ¥2,098.50.
Mitsubishi UFJ Financial rose 1% to ¥1,528.0, Sumitomo Mitsui Financial decreased 0.2% to ¥9,550.0, and Mizuho Financial Group added 0.4% to ¥3,009.0.
Furukawa Electric rose 4.7% to ¥3,600.0, TDK Corp. added 3.5% to ¥9,847.0, and Taiyo Yuden gained 2.2% to ¥3,596.0.
Terumo Corp. declined 2.8% to ¥2,689.50 and Nitori Holdings dropped 2.9% to ¥21,720.0.