Market Update
Japan Stocks Rebounded After Service Sector Expanded Seventh Consecutive Month
Akira Ito
22 Aug, 2024
Tokyo
Stocks in Tokyo advanced as investors latest update on private sector activities, and the yen retained its upward bias.
The Nikkei 225 stock average gained 0.5%, the Topix inched higher by 0.1%, and the yen traded at 145.35 against the U.S. dollar.
Stocks opened higher in Tokyo after the latest minutes of the meeting from the U.S. Federal Reserve showed policymakers are open to a rate cut at the next meeting if economic data support such a move.
The dovish minutes supported the broader market sentiment in New York, and positive earnings from leading retailers Target Corp., TJX, and Macy's also contributed to the market's strength.
Closer to home, Japan's service sector expanded for the seventh month in a row in August, indicating a strong demand for private sector business services, and the manufacturing sector contracted for the sixth month in a row.
The au Jibun Service Purchasing Managers' Index increased to 54.0 in August from the revised 53.7 in July, and the au Jibun Manufacturing PMI edged higher to 49.5 from a four-month low of 49.1 in July.
The monthly surveys were released by S&P Global on Thursday.
Japan Stock Movers
The Nikkei 225 stock average added 0.5% to 38,145.86, and the Topix index rose 0.1% to 2,668.61.
Technology stocks, financial stocks, retailers, and diversified conglomerates were among the most actively traded stocks on Thursday.
Advantest, Tokyo Electron, Shin-Etsu Chemical, Lasertec, and SoftBank advanced between 1% and 4%.
Mitsubishi UFJ, Sumitomo Mitsui, and Mizuho Financial fell between 1% and 2%, but China Bank declined more than 3%.
Mitsubishi Corp. increased 0.3% to ¥3,027.0, Marubeni decreased 0.3% to ¥2,456.0, and Itochu Corp. jumped 0.5% to ¥7,127.0.
Mercari jumped 7.5% to ¥2,377.0, IHI Corp. added 5.9% to ¥5,891.0, Chugai Pharmaceutical gained 3.9% to ¥7,114.0, and Sumitomo Pharma jumped 6.7% to ¥652.0.
Hong Kong Stocks Rebound After Positive Earnings from AIA and Xiaomi
Li Chen
22 Aug, 2024
Hong Kong
Stocks in Shanghai and Hong Kong advanced in subdued trading as investors reacted to positive earnings from leading companies.
The Hang Seng index added 0.5%, and the CSI 300 index edged up a fraction.
Market sentiment was positive after AIA and Xiaomi reported earnings ahead of market expectations. but residential property developers turned lower after Kaisa Group Holding reported weak results.
Investors also took note of the Federal Reserve policymakers supporting a rate cut at the next meeting in September if economic data support such a move, as the latest minutes of the meeting showed on Wednesday.
Despite the rebound in the Hang Seng index after a two-day sell-off, investor enthusiasm was muted amid a weakening macroeconomic backdrop.
China Stock Movers
The Hang Seng index increased 0.5% to 17,488.74, and the CSI 300 index inched up 0.05% to 3,323.36.
Xiaomi jumped 8.1% to HK $18.94, and the smartphone and electric vehicle maker reported that second-quarter revenue soared 32% to 88.9 billion yuan, or $12.4 billion, and net income jumped 38.3% to 5.1 billion yuan.
Smart handset unit sales soared 28% to 42.2 million units, and the business division's revenue increased 27.1% to 46.5 billion yuan.
The company' delivered 27,307 SU7 electric vehicles, with the EV unit generating revenue of 6.4 billion yuan and a net loss of 1.8 billion yuan.
The company lost an average of 65,900 yuan per car sold in the June quarter, and the company said it plans to sell 100,000 vehicles by November and expand its retail store network to 100 from the current 87 in 30 cities.
AIA Group gained 4.9% to HK$53.95, and the insurance company sold more insurance policies in mainland China.
The value of new business, a measure of revenue, increased 25% to $2.46 billion, and net income soared 52% to $3.31 billion, or 29.53 U.S. cents.
The value of new business in mainland China rose 36% to $782 million, and in Hong Kong, it advanced 26% to $858 million.
Mainland residents continued to buy insurance policies issued in Hong Kong to take advantage of stable currency and diversify investment returns amid a weak outlook for the yuan.
The Chinese yuan has lost about 12% of its value against the U.S. dollar over the last two years.
The company also increased its interim dividend by 5.2% to 44.50 HK cents.
India Movers: India Grid Trust, IREDA, Kilburn Engineering, P&G Health, Zen Technologies
Arun Goswami
22 Aug, 2024
Mumbai
Stocks advanced, the rupee struggled near record lows, and bond yields held steady.
Crude oil prices dropped to 2024 lows amid a weak demand outlook in China, and gold traded near a record high as major central banks prepared to lower rates in September.
The Sensex index increased by 0.2% to 81,037.76, and the Nifty index rose 0.2% to 24,811.85.
On the Mumbai stock exchange, 97 stocks traded at their 52-week highs, and 7 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds inched lower to 6.85%, and the Indian rupee weakened to 83.92 against the U.S. dollar.
India Grid Trust declined 0.5% to ₹135.24, and the KKR affiliate plans to sell a 17.3% stake in the power transmission company with a floor price of ₹132 per share.
India Renewable Energy Development Agency jumped 5.2% to ₹251.60, and the company board is scheduled to meet on August 29 to discuss a secondary offering plan to raise as much as ₹4,500 crore.
Zen Technologies declined 1.8% to ₹1,749.90, and the company plans to launch a secondary offering of ₹1,000 crore with a floor price of ₹1,685.15 per share.
Kilburn Engineering jumped 2% to ₹489.50, and the company plans to acquire Monga Strayfield, a radio frequency heating and drying equipment maker, for ₹123 crore.
Procter & Gamble Health decreased 2.1% to ₹5,258.80, and the company reported a decline in revenue and earnings in the June quarter.
Revenue decreased 5.7% to ₹283.9 crore, and net income dropped 43.7% to ₹16.8 crore from ₹29.8 crore a year ago, after the company booked a one-time charge of ₹20.2 crore.
The company also declared a final dividend of ₹60 per share.
U.S. Stocks Bounce Around Flatline After Sharp Downward Revision In Job Growth
Alexander Garcia
21 Aug, 2024
Miami
Stocks traded higher on Wall Street as investors looked forward to the release of the latest policy meeting and reviewed the latest nonfarm payroll revisions.
The S&P 500 index and the Nasdaq Composite traded around the flatline, and investors are looking for clues about the possible rate cut in September.
The U.S. economy created fewer jobs than previously reported for the year ending in Match 2024, the Bureau of Labor Statistics noted in its annual benchmark revisions released Wednesday.
The job market added 818,000 fewer jobs in the period, indicating that actual job growth was 30% less than previously estimated 2.9 million over the one-year period ending in March 2024.
In the year to March 2024, the U.S. economy still added just over 2 million jobs, but clearly the job market is not as strong as it was previously thought to be.
The largest downward revision was in the professional and business services sector, where job growth was downwardly revised by 358,000, followed by the leisure and hospitality sector with a revision of 150,000 jobs.
However, private education and health services saw an upward revision of 87,000, transportation and warehousing by 56,400, and other services by 21,000.
Moreover, investors also awaited comments from Fed Chair Jerome Powell at the annual gathering of central bankers in Jackson Hole, Wyoming.
Market indexes over the last two weeks have rebounded sharply from the near 10% losses earlier in the month after the U.S. economy added fewer than expected jobs in July, setting off the fears of an unexpected economic slowdown.
Market sentiment recovered after retail sales, jobless claims, and inflation data were ahead of expectations, calming market anxieties and setting aside the worries of a slowdown.
Stocks are resting in today's session after market indexes halted an 8-day rally on Tuesday, the longest stretch of gains since late 2023.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.2% to 5,609.98, the Nasdaq Composite rose 0.2% to 17,858.98, and the Russell 2000 index rose 0.9% to 2,154.80.
The yield on 2-year Treasury notes edged lower to 3.99%, 10-year Treasury notes decreased to 3.81%, and 30-year Treasury bonds inched higher to 4.08%.
WTI crude oil increased $0.71 to $72.47 a barrel, and natural gas prices edged down 5 cents to $2.14 a thermal unit.
Gold fell by $4.53 to $2,508.03 an ounce, and silver increased by $0.05 to $29.50.
The dollar index, which weighs the US currency against a basket of foreign currencies, edged lower to 101.21.
U.S. Stock Movers
Toll Brothers increased 1.1% to $135.0, and the luxury home builder reported higher-than-expected fiscal third quarter results and lifted its estimate of home deliveries for the year.
Keysight Technologies jumped 11.5% to $155.69, and the test equipment manufacturing company reported better-than-expected results in the latest quarter and lifted its outlook for the current quarter.
Macy's Inc. decreased 8.5% to $16.24, and the department store operator reported better-than-expected adjusted earnings.
However, the retailer lowered its annual sales outlook to between $22.1 billion and $22.4 billion from the previous estimate between $22.3 billion and $22.9 billion.
The company also guided comparable sales to shrink between 0.5% and 2.0%, compared to the previous estimate of a fall between 1.0% and 1.5%.
Target Corp. jumped 15% to $166.51, and the retailer reported better-than-expected second quarter results.
Revenue increased 2.7% to $25.4 billion from $24.8 billion, net income advanced 42.8% to $1.2 billion from $835 million, and diluted earnings per share rose 42.4% to $2.57 from $1.80 a year ago.
The company guided comparable store sales increase in the third quarter to rise between zero and 2.0%, and GAAP and adjusted earnings per share between $2.10 and $2.40.
Target said it repurchased $155 million of its shares in the second quarter, retiring 1.1 million shares of common stock at an average price of $145.94.
The company paid dividends of $509 million in the second quarter, compared with $499 million last year, an increase of 1.9% in the dividend per share.
As of the end of the quarter, the company had approximately $9.5 billion available under the repurchase program authorized by its Board of Directors in August 2021.
Arch Resources Inc. jumped 6.5% to $135.0, and the company said it plans to merge with Consol Energy to form a new company, Core Natural Resources.
Consol Energy jumped 7.2% to $102.33.
The combined company is expected to have annual revenue of $5.7 billion and a coal production capacity of 101 million tons, with an export potential of 25 million tons.
Core National, after the merger, would operate 11 mines in six states, and the combination is expected to generate cost and operational synergy between $110 million and $140 million within six to 18 months following the close of the transaction, primarily from the logistics optimization.
European Markets Extend Weekly Gains, Euro Hovers Near 8-month High
Major stock markets across Europe advanced and extended gains for the third week in a row and erased losses booked earlier in the month.
Benchmark indexes in London, Paris, and Frankfurt inched higher amid optimism that central banks in Europe and in the U.S. are ready to cut interest rates next month.
The rate-cut expectations have bolstered market sentiment over the last two weeks following a string of positive updates on inflation in Europe and improving retail sales, labor market, and inflation indicators in the U.S.
Natural gas prices weakened slightly after gas storage levels reached 90% capacity as Norway prepares for heavy maintenance over the next few weeks.
Europe Indexes and Yields
The DAX index increased by 0.5% to 18,451.75; the CAC-40 index rose by 0.5% to 7,524.72; and the FTSE 100 index advanced by 0.1% to 8,283.43.
The yield on 10-year German bonds edged lower to 2.22%, French bonds inched down to 2.94%, the UK gilts edged higher to 3.92%, and Italian bonds inched up to 3.59%.
The euro edged down to $1.11; the British pound inched higher to $1.30; and the U.S. dollar weakened to 85.49 Swiss cents.
Brent crude decreased $0.39 to $76.88 a barrel, and the Dutch TTF natural gas rose by €0.90 to €37.21 per MWh.
Europe Stock Movers
Mining companies in London advanced after aluminum futures in Shanghai rose to a five-week high amid tight supplies.
Glencore increased 1.1% to 414.51 pence, Anglo American jumped 2% to 2,291.0 pence, and Antofagasta added 1.5% to 1,908.0 pence.
Barratt Developments decreased 0.5% to 546.40 pence after the UK's Competition and Markets Authority signaled its willingness to accept measures proposed by the company and Redrow to alleviate local competition concerns.
Costain Group PLC jumped 5.1% to 99.40 pence, and the UK-based construction and engineering company announced strong first-half results and a stock repurchase plan of £10 million.
Alcon AG decreased 1.8% to CHF 81.18 after the Swiss pharmaceutical and medical device company for eyecare reported weaker-than-expected second quarter results.
Tokyo Indexes Trimmed Weekly Gains
A stronger yen and tech weakness in New York dragged down market indexes in Tokyo in Wednesday's trading.
The Nikkei 225 decreased 0.3%, and the broader Topix index dropped 0.2% after the yen resumed its upward move.
The yen traded as high as 149.96 against the U.S. dollar, and market indexes turned lower because stronger yen contributes to the weakness in corporate earnings.
Market sentiment was also weak after investors turned cautious on Wall Street and halted the 8-day rally amid worries about the high valuation of artificial intelligence-linked stocks.
Japan's Trade Deficit Soared In July
On the economic front, Japan's trade deficit soared in July after imports soared and exports rose at a slower pace, according to data from the Ministry of Finance.
Exports rose 10.3% from a year ago to 9.6 trillion yen, accelerated from a 5.4% increase in the previous month, and rose for the eighth month in a row amid weakness in the yen, driving demand for machinery and semiconductor equipment.
Imports soared 16.6% to 10.2 trillion from 8.7 trillion a year ago, resulting in a trade deficit increase of ninefold to 621.8 billion yen from 61.3 billion yen.
Trade deficit with China increased 80% to 638.5 billion yen, and the surplus with the U.S. declined 9% to 768.6 billion yen.
Trade deficit with Western Europe soared sixfold to 206.3 billion yen after exports declined 2% to 1.1 trillion yen and imports rose 13.7% to 1.3 trillion yen.
Japan Stock Movers
The Nikkei 225 stock average decreased 0.3% to 37,970.84, and the Topix index fell 0.2% to 2,664.49.
Tech stocks led the decliners in Tokyo trading following losses in overnight trading in New York.
Advantest, Disco Corp., Lasetec, SoftBank, and Tokyo Electron fell between 2% and 4%.
Financial stocks also participated in the market selloff, with leading banks and insurance companies losing more than 1%.
Sumitomo Mitsui, Mitsubishi UFJ, and Mizuho Financial declined between 0.4% and 1.7%.
Dai-ichi Life declined 2.5% to ¥4,059.0, Tokio Marine Holdings dropped 1.9% to ¥5,474.0, and MS&AD eased 0.7% to ¥3,343.0.
Seven & I Holdings jumped 3% to ¥2,044.50, and Canada's retail giant Alimentation Couche-Tard offered to buy the company for $38 billion.
Tokyo-based Seven & I Holdings, which owns the 7-Eleven chain, said it has formed a special committee to review the offer.
Foreign Investor Exodus Adds to Selling Pressure in Hong Kong
Stocks in Shanghai and Hong Kong accelerated their declines amid weakening economic backdrops and a lack of earnings growth catalysts.
The Hang Seng index plunged 1% and wiped out this week's gains, and the CSI 300 index declined 0.2%.
The latest selloff was sparked by a weakness in tech stocks after a Bloomberg News report suggested that Walmart is looking to sell its stake in the online platform JD.com and increase its investment in its operations.
The tech stocks turned lower following the Walmart news and added to the growing exodus of foreign investors from Chinese stocks trading in Hong Kong.
China, the second-largest economy in the world, is undergoing deep structural changes, weakening consumer confidence, and residential property market malaise that shows no signs of ending.
Increasingly, foreign investors are losing patience with Chinese markets amid a lack of consistent policy support and a weak earnings growth outlook.
While foreign investors are significantly cutting their exposure to Chinese stocks, in particular tech stocks, domestic investors are searching for undervalued companies with stock buyback plans.
So far in the year, stock buybacks in Hong Kong have surged 30%, and to a record high of HK $164.8 billion, or $21.2 billion, according to data provider Hang Seng Indexes Company.
China Stock Movers
The Hang Seng index decreased 1% to 17,329.24 and the CSI 300 index dropped 0.2% to 3,327.69.
Alibaba Group declined 1.2% to HK $79.45, Baidu decreased 2% to HK $84.85, Xiaomi fell 1.2% to HK $17.46, and Kuaishou Technology plunged 10.5% to HK $39.80.
Sunny Optical Technology advanced 8.5% to HK $49.50, and the optical lens and camera module maker reported better-than-expected earnings.
Revenue in the first half increased 32.1% to 18.8 billion yuan from 14.3 billion yuan, and profit attributable to shareholders soared 147% to 1.1 billion yuan from 459.4 million yuan a year ago.
Diluted earnings per share jumped to 99.1 yuan from 39.95 yuan a year ago.
Despite today's bounce, Sunny Optical stock has collapsed over the three years from a high of HK $252.60.
Hong Kong Exchanges and Clearing Ltd. decreased 1.9% to HK $227.40 despite the company reporting increase in profit for the first time in three quarters.
Revenue in the June quarter increased 8% from a year ago to HK $5.4 billion and net income advanced to 9% to HK $3.16 billion, following a rebound in initial public offering and in trading activities.
U.S. Movers: Arch Resources, Consol Energy, Keysight Technologies, Macy's, Target Corp., Toll Brothers
Scott Peters
21 Aug, 2024
New York City
Toll Brothers increased 1.1% to $135.0, and the luxury home builder reported higher-than-expected fiscal third quarter results and lifted its estimate of home deliveries for the year.
Keysight Technologies jumped 11.5% to $155.69, and the test equipment manufacturing company reported better-than-expected results in the latest quarter and lifted its outlook for the current quarter.
Macy's Inc. decreased 8.5% to $16.24, and the department store operator reported better-than-expected adjusted earnings.
However, the retailer lowered its annual sales outlook to between $22.1 billion and $22.4 billion from the previous estimate between $22.3 billion and $22.9 billion.
The company also guided comparable sales to shrink between 0.5% and 2.0%, compared to the previous estimate of a fall between 1.0% and 1.5%.
Target Corp. jumped 15% to $166.51, and the retailer reported better-than-expected second quarter results.
Revenue increased 2.7% to $25.4 billion from $24.8 billion, net income advanced 42.8% to $1.2 billion from $835 million, and diluted earnings per share rose 42.4% to $2.57 from $1.80 a year ago.
The company guided comparable store sales increase in the third quarter to rise between zero and 2.0%, and GAAP and adjusted earnings per share between $2.10 and $2.40.
Target said it repurchased $155 million of its shares in the second quarter, retiring 1.1 million shares of common stock at an average price of $145.94.
The company paid dividends of $509 million in the second quarter, compared with $499 million last year, an increase of 1.9% in the dividend per share.
As of the end of the quarter, the company had approximately $9.5 billion available under the repurchase program authorized by its Board of Directors in August 2021.
Arch Resources Inc. jumped 6.5% to $135.0, and the company said it plans to merge with Consol Energy to form a new company, Core Natural Resources.
Consol Energy jumped 7.2% to $102.33.
The combined company is expected to have annual revenue of $5.7 billion and a coal production capacity of 101 million tons, with an export potential of 25 million tons.
Core National, after the merger, would operate 11 mines in six states, and the combination is expected to generate cost and operational synergy between $110 million and $140 million within six to 18 months following the close of the transaction, primarily from the logistics optimization.
U.S. Major Averages On Hold Ahead of Fed Minutes
Barry Adams
21 Aug, 2024
New York City
Stocks were little changed in early trading on Wall Street as investors looked forward to the release of the latest policy meeting.
The S&P 500 index and the Nasdaq Composite traded around the flatline, and investors are looking for clues about the possible rate cut in September.
Moreover, investors also awaited comments from Fed Chair Jerome Powell at the annual gathering of central bankers in Jackson Hole, Wyoming.
Market indexes over the last two weeks have rebounded sharply from the near 10% losses earlier in the month after the U.S. economy added fewer than expected jobs in July, setting off the fears of an unexpected economic slowdown.
Market sentiment recovered after retail sales, jobless claims, and inflation data were ahead of expectations, calming market anxieties and setting aside the worries of a slowdown.
Stocks are resting in today's session after market indexes halted an 8-day rally on Tuesday, the longest stretch of gains since late 2023.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.2% to 5,608.94, the Nasdaq Composite rose 0.1% to 17,842.28, and the Russell 2000 index fell 1.2% to 2,142.17.
The yield on 2-year Treasury notes edged lower to 3.99%, 10-year Treasury notes decreased to 3.81%, and 30-year Treasury bonds inched higher to 4.08%.
WTI crude oil increased $0.17 to $73.34 a barrel, and natural gas prices edged up 1 cent to $2.20 a thermal unit.
Gold fell by $2.52 to $2,510.94 an ounce, and silver increased by $0.18 to $29.62.
The dollar index, which weighs the US currency against a basket of foreign currencies, edged lower to 101.47.
U.S. Stock Movers
Toll Brothers increased 1.1% to $135.0, and the luxury home builder reported higher-than-expected fiscal third quarter results and lifted its estimate of home deliveries for the year.
Keysight Technologies jumped 11.5% to $155.69, and the test equipment manufacturing company reported better-than-expected results in the latest quarter and lifted its outlook for the current quarter.
Macy's Inc. decreased 8.5% to $16.24, and the department store operator reported better-than-expected adjusted earnings.
However, the retailer lowered its annual sales outlook to between $22.1 billion and $22.4 billion from the previous estimate between $22.3 billion and $22.9 billion.
The company also guided comparable sales to shrink between 0.5% and 2.0%, compared to the previous estimate of a fall between 1.0% and 1.5%.
Target Corp. jumped 15% to $166.51, and the retailer reported better-than-expected second quarter results.
Revenue increased 2.7% to $25.4 billion from $24.8 billion, net income advanced 42.8% to $1.2 billion from $835 million, and diluted earnings per share rose 42.4% to $2.57 from $1.80 a year ago.
The company guided comparable store sales increase in the third quarter to rise between zero and 2.0%, and GAAP and adjusted earnings per share between $2.10 and $2.40.
Target said it repurchased $155 million of its shares in the second quarter, retiring 1.1 million shares of common stock at an average price of $145.94.
The company paid dividends of $509 million in the second quarter, compared with $499 million last year, an increase of 1.9% in the dividend per share.
As of the end of the quarter, the company had approximately $9.5 billion available under the repurchase program authorized by its Board of Directors in August 2021.
Arch Resources Inc. jumped 6.5% to $135.0, and the company said it plans to merge with Consol Energy to form a new company, Core Natural Resources.
Consol Energy jumped 7.2% to $102.33.
The combined company is expected to have annual revenue of $5.7 billion and a coal production capacity of 101 million tons, with an export potential of 25 million tons.
Core National, after the merger, would operate 11 mines in six states, and the combination is expected to generate cost and operational synergy between $110 million and $140 million within six to 18 months following the close of the transaction, primarily from the logistics optimization.
Europe Movers: Alcon, Barratt Developments, Costain Group, Mining Stocks
Inga Muller
21 Aug, 2024
Frankfurt
European markets traded higher, the euro strengthened to an eight-month high, and bond yields dipped to the levels last seen in January.
The DAX index increased by 0.5% to 18,443.66; the CAC-40 index rose by 0.4% to 7,518.40; and the FTSE 100 index advanced by 0.2% to 8,287.88.
The yield on 10-year German bonds edged lower to 2.22%, French bonds inched down to 2.94%, the UK gilts edged higher to 3.92%, and Italian bonds inched up to 3.59%.
Mining companies in London advanced after aluminum futures in Shanghai rose to a five-week high amid tight supplies.
Glencore increased 1.1% to 414.51 pence, Anglo American jumped 2% to 2,291.0 pence, and Antofagasta added 1.5% to 1,908.0 pence.
Barratt Developments decreased 0.5% to 546.40 pence after the UK's Competition and Markets Authority signaled its willingness to accept measures proposed by the company and Redrow to alleviate local competition concerns.
Costain Group PLC jumped 5.1% to 99.40 pence, and the UK-based construction and engineering company announced strong first-half results and a stock repurchase plan of £10 million.
Alcon AG decreased 1.8% to CHF 81.18 after the Swiss pharmaceutical and medical device company for eyecare reported weaker-than-expected second quarter results.
European Markets Extend Weekly Gains, Euro Hovers Near 8-month High
Bridgette Randall
21 Aug, 2024
London
Major stock markets across Europe advanced and extended gains for the third week in a row and erased losses booked earlier in the month.
Benchmark indexes in London, Paris, and Frankfurt inched higher amid optimism that central banks in Europe and in the U.S. are ready to cut interest rates next month.
The rate-cut expectations have bolstered market sentiment over the last two weeks following a string of positive updates on inflation in Europe and improving retail sales, labor market, and inflation indicators in the U.S.
Natural gas prices weakened slightly after gas storage levels reached 90% capacity as Norway prepares for heavy maintenance over the next few weeks.
Europe Indexes and Yields
The DAX index increased by 0.5% to 18,443.66; the CAC-40 index rose by 0.4% to 7,518.40; and the FTSE 100 index advanced by 0.2% to 8,287.88.
The yield on 10-year German bonds edged lower to 2.22%, French bonds inched down to 2.94%, the UK gilts edged higher to 3.92%, and Italian bonds inched up to 3.59%.
The euro edged down to $1.11; the British pound inched higher to $1.30; and the U.S. dollar weakened to 85.49 Swiss cents.
Brent crude decreased $0.23 to $77.48 a barrel, and the Dutch TTF natural gas rose by €0.54 to €37.58 per MWh.
Europe Stock Movers
Mining companies in London advanced after aluminum futures in Shanghai rose to a five-week high amid tight supplies.
Glencore increased 1.1% to 414.51 pence, Anglo American jumped 2% to 2,291.0 pence, and Antofagasta added 1.5% to 1,908.0 pence.
Barratt Developments decreased 0.5% to 546.40 pence after the UK's Competition and Markets Authority signaled its willingness to accept measures proposed by the company and Redrow to alleviate local competition concerns.
Costain Group PLC jumped 5.1% to 99.40 pence, and the UK-based construction and engineering company announced strong first-half results and a stock repurchase plan of £10 million.
Alcon AG decreased 1.8% to CHF 81.18 after the Swiss pharmaceutical and medical device company for eyecare reported weaker-than-expected second quarter results.
Tokyo Indexes Trimmed Weekly Gains, Japan's Trade Deficit Soared In July
Akira Ito
21 Aug, 2024
Tokyo
A stronger yen and tech weakness in New York dragged down market indexes in Tokyo in Wednesday's trading.
The Nikkei 225 decreased 0.3%, and the broader Topix index dropped 0.2% after the yen resumed its upward move.
The yen traded as high as 149.96 against the U.S. dollar, and market indexes turned lower because stronger yen contributes to the weakness in corporate earnings.
Market sentiment was also weak after investors turned cautious on Wall Street and halted the 8-day rally amid worries about the high valuation of artificial intelligence-linked stocks.
On the economic front, Japan's trade deficit soared in July after imports soared and exports rose at a slower pace, according to data from the Ministry of Finance.
Exports rose 10.3% from a year ago to 9.6 trillion yen, accelerated from a 5.4% increase in the previous month, and rose for the eighth month in a row amid weakness in the yen, driving demand for machinery and semiconductor equipment.
Imports soared 16.6% to 10.2 trillion from 8.7 trillion a year ago, resulting in a trade deficit increase of ninefold to 621.8 billion yen from 61.3 billion yen.
Trade deficit with China increased 80% to 638.5 billion yen, and the surplus with the U.S. declined 9% to 768.6 billion yen.
Trade deficit with Western Europe soared sixfold to 206.3 billion yen after exports declined 2% to 1.1 trillion yen and imports rose 13.7% to 1.3 trillion yen.
Japan Stock Movers
The Nikkei 225 stock average decreased 0.3% to 37,970.84, and the Topix index fell 0.2% to 2,664.49.
Tech stocks led the decliners in Tokyo trading following losses in overnight trading in New York.
Advantest, Disco Corp., Lasetec, SoftBank, and Tokyo Electron fell between 2% and 4%.
Financial stocks also participated in the market selloff, with leading banks and insurance companies losing more than 1%.
Sumitomo Mitsui, Mitsubishi UFJ, and Mizuho Financial declined between 0.4% and 1.7%.
Dai-ichi Life declined 2.5% to ¥4,059.0, Tokio Marine Holdings dropped 1.9% to ¥5,474.0, and MS&AD eased 0.7% to ¥3,343.0.
Seven & I Holdings jumped 3% to ¥2,044.50, and Canada's retail giant Alimentation Couche-Tard offered to buy the company for $38 billion.
Tokyo-based Seven & I Holdings, which owns the 7-Eleven chain, said it has formed a special committee to review the offer.
Foreign Investor Exodus Adds to Selling Pressure in Hong Kong
Li Chen
21 Aug, 2024
Hong Kong
Stocks in Shanghai and Hong Kong accelerated their declines amid weakening economic backdrops and a lack of earnings growth catalysts.
The Hang Seng index plunged 1% and wiped out this week's gains, and the CSI 300 index declined 0.2%.
The latest selloff was sparked by a weakness in tech stocks after a Bloomberg News report suggested that Walmart is looking to sell its stake in the online platform JD.com and increase its investment in its operations.
The tech stocks turned lower following the Walmart news and added to the growing exodus of foreign investors from Chinese stocks trading in Hong Kong.
China, the second-largest economy in the world, is undergoing deep structural changes, weakening consumer confidence, and residential property market malaise that shows no signs of ending.
Increasingly, foreign investors are losing patience with Chinese markets amid a lack of consistent policy support and a weak earnings growth outlook.
While foreign investors are significantly cutting their exposure to Chinese stocks, in particular tech stocks, domestic investors are searching for undervalued companies with stock buyback plans.
So far in the year, stock buybacks in Hong Kong have surged 30%, and to a record high of HK $164.8 billion, or $21.2 billion, according to data provider Hang Seng Indexes Company.
China Stock Movers
The Hang Seng index decreased 1% to 17,329.24 and the CSI 300 index dropped 0.2% to 3,327.69.
Alibaba Group declined 1.2% to HK $79.45, Baidu decreased 2% to HK $84.85, Xiaomi fell 1.2% to HK $17.46, and Kuaishou Technology plunged 10.5% to HK $39.80.
Sunny Optical Technology advanced 8.5% to HK $49.50, and the optical lens and camera module maker reported better-than-expected earnings.
Revenue in the first half increased 32.1% to 18.8 billion yuan from 14.3 billion yuan, and profit attributable to shareholders soared 147% to 1.1 billion yuan from 459.4 million yuan a year ago.
Diluted earnings per share jumped to 99.1 yuan from 39.95 yuan a year ago.
Despite today's bounce, Sunny Optical stock has collapsed over the three years from a high of HK $252.60.
Hong Kong Exchanges and Clearing Ltd. decreased 1.9% to HK $227.40 despite the company reporting increase in profit for the first time in three quarters.
Revenue in the June quarter increased 8% from a year ago to HK $5.4 billion and net income advanced to 9% to HK $3.16 billion, following a rebound in initial public offering and in trading activities.
India Movers: Cyient DLM, Genus Power, PNB Housing Finance, Weizmann
Arun Goswami
21 Aug, 2024
Mumbai
Mumbai stocks were under pressure following weak trading in Asia, and the rupee struggled near record low despite the U.S. dollar dropping to 2024 lows against the euro and the pound.
The Sensex index decreased by 0.3% to 80,762.50, and the Nifty index rose 0.1% to 24,719.50.
On the Mumbai stock exchange, 234 stocks traded at their 52-week highs, and 12 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds inched lower to 6.85%, and the Indian rupee weakened to 83.85 against the U.S. dollar.
PNB Housing Finance increased 7.5% to ₹864.80, and a fund controlled by General Atlantic plans to sell 5.1% stake in the company in a block deal with a floor price of ₹775 per share.
Mobile telephone service providers were in focus after subscribers continued to migrate from Vodafone Idea to Reliance Jio and Bharti Airtel.
In June, Vodafone Idea lost 8.60 lakh subscribers, Bharti Airtel gained 12.5 lakh, and Reliance Jio added 19.1 lakh subscribers.
Cyient DLM decreased 1.8% to ₹772.35, and Cyient is planning to lower its stake in the company to 52.16% from 66.66%.
The company is set to sell 1.15 crore shares for ₹860.9 crore block deal, with a floor price of ₹748.65 per share.
Genus Power Infrastructures increased 4.9% to ₹437.75, and the company's subsidiary won an order worth ₹3,602 crore for advanced metering services.
Weizmann Limited declined 2.2% to ₹133.95, and the company's board approved ₹5.84 crore stock buyback plan at a price not to exceed ₹160 per share.
S&P 500 and Nasdaq Turned Lower and Halted 8-day Rally
Alexander Garcia
20 Aug, 2024
Miami
Benchmark indexes on Wall Street traded down and halted an eight-day rally as investors kept alive rate-cut hopes next month.
The S&P 500 index and the Nasdaq Composite index fell amid receding fears of an economic slowdown and halted their gains after the eighth session in a row.
Earlier in the month, benchmark indexes plunged as much as 10% amid worries of an economic slowdown after non-farm payrolls and weekly jobless claims were sharply lower than estimated.
However, those worries were set aside in the following two weeks after retail sales and jobless claims were ahead of market expectations, and softer inflation reports also confirmed that the current economic expansion with low inflation is intact.
Investors bid up stocks in the hopes that the Federal Reserve is ready to start its rate-cutting cycle after the end of the policy meeting on September 19.
However, those high hopes of a rate cut may face hurdles, and the Fed's policymakers may wait a little longer before inflation is on a downward trajectory towards the 2% level.
Despite eleven rate hikes over 2022 and 2023, prices are still rising from a higher base, and inflation has stalled at 3%.
Moreover, the Fed is fighting for its credibility after letting the first rise in inflation be transitory and then reversing its course after inflation soared to close to 9%.
In addition, the Federal Reserve has no tools to bring down high prices that have seeped deep into the economy.
Over the last three years, home prices have jumped more than 50%, vehicle prices are up at least 30%, food prices have risen at least 50%, and most service costs have jumped more than 40%.
The Fed's repeated signaling of its inflation target rate of 2% may not be achieved for months to come because prices of services are still rising and wages are growing between 4% and 5%, inconsistent with the Fed's goals.
Inflation may hover near 3%, but most consumers are feeling the shock of the higher cost of living, and most families are struggling to pay bills.
U.S. Indexes and Treasury Yields
The S&P 500 index decreased 0.3% to 5,593.20, the Nasdaq Composite fell 0.4% to 17,798.49, and the Russell 2000 index fell 1.3% to 2,139.28.
The yield on 2-year Treasury notes edged lower to 4.05%, 10-year Treasury notes decreased to 3.86%, and 30-year Treasury bonds inched higher to 4.12%.
WTI crude oil decreased $0.45 to $73.20 a barrel, and natural gas prices edged up 4 cents to $2.18 a thermal unit.
Gold advanced by $8.18 to $2,511.76 an ounce, and silver increased by $0.05 to $29.46.
The dollar index, which weighs the US currency against a basket of foreign currencies, edged lower to 101.49.
U.S. Stock Movers
Palo Alto Networks soared 1.9% to $350.0, and the cyber security company reported better-than-expected quarterly results and raised its stock repurchase size by $500 million.
The company guided fiscal first quarter earnings per share between $1.47 and $1.49 and revenue between $2.1 billion and $2.13 billion.
Lowe's Companies declined 1.1% to $240.50, and the home improvement retailer reported mixed quarterly results.
In the fiscal second quarter, the specialty retailer earned $4.10 a share, beating the estimate of as low as $3.99, and revenue was $23.59 billion, slightly lower than the estimate of $23.85 billion.
The company also lowered its annual outlook, citing softening demand growth after three years of strong growth.
Paramount Global Class A decreased 1.6% to $22.90 after reports that Edgar Bronfman Jr. proposed to acquire National Amusement, which owns a controlling stake in the media company.
The new proposal comes a month after Paramount and Skydance Media and their group of investors agreed to buy the company.
Hawaiian Holdings soared 11.5% to $17.70 and Alaska Air Group gained 1.4% to $35.55 after the U.S. Justice Department approved the $1.9 billion merger of two airlines.
The two companies are now seeking merger approval from the U.S. Transportation Department.
European Markets Extend Recent Rally
European markets extended gains for the sixth session in a row and erased losses incurred earlier in the month brought by a sharp global market selloff.
Benchmark indexes in London, Paris, and Frankfurt traded around the flatline amid growing expectations that the European Central Bank and the Federal Reserve are more likely to lower rates to keep current economic expansion intact.
Euro Area consumer price inflation was 2.6% in July, Eurostat confirmed on Tuesday.
Sweden Lowers Rates by 25 Basis Points
Riksbank lowered its policy rate by 25 basis points to 3.5% after the policy meeting today, and the central bank held out for two to three additional rate cuts in the year as long as inflation stays on the current trajectory.
Policymakers also said that the economic growth outlook is weaker than expected in June, supporting the case for a rate reduction.
The central bank lowered its key lending rate for the second time in a row after rates were revised to 4.0%, a high not seen since October 2008.
Swiss Trade Deficit Shrank After Exports Fell In July
The Swiss international trade surplus shrank in July after exports fell and imports rose from the previous month, the Federal Office for Customs and Border Security reported Tuesday.
Seasonally adjusted exports decreased 2.7% to CHF 22.46 billion and imports advanced 0.3% to CHF 18.36 billion, resulting in a trade surplus of CHF 4.10 billion compared to CHF 4.90 billion in the previous month.
Weaknesses in chemical and pharmaceutical products accounted for 90% of the decline in exports, according to the customs agency.
Swiss watch exports increased 1.6% from a year ago to CHF 2.2 billion, or $2.6 billion, according to the Federation of the Swiss Watch Industry.
The number of unis shipped in the month remained nearly unchanged, at 1.4 million watches.
Europe Indexes and Yields
The DAX index decreased by 0.4% to 18,357.52; the CAC-40 index fell by 0.2% to 7,485.03; and the FTSE 100 index decreased by 1.0% to 8,273.32.
The yield on 10-year German bonds edged higher to 2.24%, French bonds inched up to 2.97%, the UK gilts edged higher to 3.94%, and Italian bonds inched up to 3.62%.
The euro edged down to $1.101; the British pound inched higher to $1.30; and the U.S. dollar weakened to 85.95 Swiss cents.
Brent crude decreased $0.28 to $77.37 a barrel, and the Dutch TTF natural gas fell by €1.20 to €38.22 per MWh.
Europe Stock Movers
Semiconductor equipment stocks traded higher after AMD announced its plans on Monday to acquire ZT Systems for $4.9 billion.
ASML Holding jumped 2% to €846.20, and BE Semiconductor soared 1.5% to €123.85.
Jyske Bank decreased 0.1% to DKK 534.0 after the Danish bank reported an increase in profit in the first half and estimated annual profit to be near the upper end of the range for 2024.
Net income increased 5% to DKK 2.6 billion, driven by higher net interest income and improvements in capital market activities.
The company also confirmed it launched its DKK 1.5 billion stock repurchase program during the period.
Nordex SE advanced 0.8% to €13.96, and the wind turbine maker received orders for five turbines totaling 102 MW from Akfen Renewable Energy in Turkey.
Energy explorers declined after crude oil prices fell to a two-week low amid China demand growth worries and elevated tensions in the Middle East.
BP Plc declined 1.8% to 433.96 pence, Shell PLC dropped 1.7% to 2,766.0 pence, and TotalEnergies eased 0.8% to €62.40.
Antofagasta increased 0.2% to 1,883.50 pence after the UK-based mining company reported a slight decline in pre-tax profit in the first half from the previous year.
Stocks In Japan Swing Higher Tracking Gains On Wall Street
Stock market indexes in Tokyo rebounded from the losses in the previous session, tracking gains in tech stocks in overnight trading in New York.
The Nikkei 225 stock average jumped 1.8%, and the broader Topix index gained 1.2%.
Market gains were supported by the slight weakness in the Japanese yen, but uncertainty loomed that the stronger yen could lead to unwinding of yen carry trade.
The yen traded at 147.21 against the U.S. dollar, and the currency held steady for the third session in a row after soaring earlier in the month to a high not seen since January.
Investors also looked forward to the release of inflation data on Friday, and economists anticipate overall consumer inflation and core inflation to stay above 2.5%.
Gold in international trading stayed above $2.500 an ounce amid rising demand from Chinese retail buyers as investors shift investment away from residential property to precious metals.
Moreover, the People's Bank of China is expected to continue diversifying its foreign exchange reserves away from the U.S. government bonds to precious metals, including gold.
Brent crude oil prices traded down 2% to $77 a barrel in the hopes that a wider conflict between Iran and Israel could be avoided as diplomats worked to prevent Middle East conflict from escalating.
Moreover, prices were under pressure on the worries of demand growth in China amid a protracted residential property market slump and weak consumer confidence.
As widely anticipated, the People's Bank of China held steady its one-year loan prime rate at 3.35% and five-year loan prime rate at 3.85%, after cutting rates in the last month.
Japan Stock Movers
The Nikkei 225 stock average advanced 1.8% to 38,062.92, and the Topix index rose 1.2% to 2,672.10.
Tech stocks led the gainers in Tokyo, tracking gains in overnight trading on Wall Street.
Softbank, Advantest, Tokyo Electron, Lasertec, and Disco Corp. advanced between 2% and 3%.
Mitsubishi UFJ Financial, Sumitomo Mitsui Financial, and Mizuho Financial edged down between 0.1% and 0.4%.
Toyota Motor jumped 1% to ¥2,687.0, Honda Motor added 0.7% to ¥1,578.0, and Nissan Motor gained 2.5% to ¥447.80.
Canon Inc. gained 2.6% to ¥4,828.0, Panasonic Holdings Corp. added 1.4% to ¥1,159.50, and Mitsubishi Electric Corp. increased 1% to ¥2,390.0.
Marubeni Corp. advanced 0.4% to ¥2,480.0, Itochu Corp. increased 0.4% to ¥7,169.0, and Mitsubishi Corp. declined 0.03% to ¥3,024.0.
PBoC Holds Rates Steady; Weak Tech Stocks Drag Stock Indexes Lower
Market indexes in Shanghai and Hong Kong edged lower, and the central bank held steady two key lending rates.
The Hang Seng index declined 0.4% and the mainland-focused CSI 300 index dropped 0.9%.
The People's Bank of China held steady 1-year loan prime rate at 3.35% and the 5-year loan prime rate at 3.85%.
The one-year loan rate is used as a reference rate for new and outstanding loans, and the five-year loan rate is seen as a benchmark for mortgage loans.
Market sentiment was weak as investors debated the future U.S. rate path because Hong Kong rates are tied to the U.S. rates to keep the currency peg.
Investors have been cautious after a batch of mixed economic reports last week, after new home prices declined for the 13th month in a row in July and fell at the fastest pace in several years.
Moreover, the property market shows little signs of stabilizing, and local government announcements to support the completion of unfinished projects did little to arrest price declines or increase property transactions.
China Stock Movers
The Hang Seng index decreased 0.4% to 17,503.90 and the CSI 300 index dropped 0.9% to 3,327.35.
Kaisa Group Holdings dropped 4.5% to HK $0.10 after the company urged lenders to accept its restructuring plan and avoid bankruptcy.
Tech stocks traded down in Hong Kong amid ongoing worries of earnings growth, despite JD.com reporting a near doubling of earnings in the second quarter.
JD.com decreased 0.3% to HK $112.10, Alibaba Group fell 1.5% to HK $80.20, Baidu added 0.7% to HK $86.45, and Haier Smart Home dropped 4.5% to HK $22.50.
Li Auto added 1.2% to HK $81.60, Xpeng fell 2% to HK $27.55, and BYD added 0.02% to HK 235.47.
TYK Medicines jumped 8% to HK $13.05, and the biopharmaceutical company completed its initial public offering at HK $12 per share and raised HK $579 million.
U.S. Movers: Alaska Air, Hawaiian Holdings, Lowe's, Palo Alto Networks, Paramount Global
Scott Peters
20 Aug, 2024
New York City
Palo Alto Networks soared 1.9% to $350.0, and the cyber security company reported better-than-expected quarterly results and raised its stock repurchase size by $500 million.
The company guided fiscal first quarter earnings per share between $1.47 and $1.49 and revenue between $2.1 billion and $2.13 billion.
Lowe's Companies declined 1.1% to $240.50, and the home improvement retailer reported mixed quarterly results.
In the fiscal second quarter, the specialty retailer earned $4.10 a share, beating the estimate of as low as $3.99, and revenue was $23.59 billion, slightly lower than the estimate of $23.85 billion.
The company also lowered its annual outlook, citing softening demand growth after three years of strong growth.
Paramount Global Class A decreased 1.6% to $22.90 after reports that Edgar Bronfman Jr. proposed to acquire National Amusement, which owns a controlling stake in the media company.
The new proposal comes a month after Paramount and Skydance Media and their group of investors agreed to buy the company.
Hawaiian Holdings soared 11.5% to $17.70 and Alaska Air Group gained 1.4% to $35.55 after the U.S. Justice Department approved the $1.9 billion merger of two airlines.
The two companies are now seeking merger approval from the U.S. Transportation Department.
Rate-cut Hopes Fueled Optimism Rules Wall Street
Barry Adams
20 Aug, 2024
New York City
Stocks on Wall Street were little changed, and market indexes are likely to retain upward momentum amid improving global market sentiment.
The S&P 500 index and the Nasdaq Composite index edged slightly higher as fears of an economic slowdown receded and extended their gains for the eighth session in a row.
Earlier in the month, benchmark indexes plunged as much as 10% amid worries of an economic slowdown after non-farm payrolls and weekly jobless claims were sharply lower than estimated.
However, those worries were set aside in the following two weeks after retail sales and jobless claims were ahead of market expectations, and softer inflation reports also confirmed that the current economic expansion with low inflation is intact.
Investors bid up stocks in the hopes that the Federal Reserve is ready to start its rate-cutting cycle after the end of the policy meeting on September 19.
However, those high hopes of a rate cut may face hurdles, and the Fed's policymakers may wait a little longer before inflation is on a downward trajectory towards the 2% level.
Despite eleven rate hikes over 2022 and 2023, prices are still rising from a higher base, and inflation has stalled at 3%.
Moreover, the Fed is fighting for its credibility after letting the first rise in inflation be transitory and then reversing its course after inflation soared to close to 9%.
In addition, the Federal Reserve has no tools to bring down high prices that have seeped deep into the economy.
Over the last three years, home prices have jumped more than 50%, vehicle prices are up at least 30%, food prices have risen at least 50%, and most service costs have jumped more than 40%.
The Fed's repeated signaling of its inflation target rate of 2% may not be achieved for months to come because prices of services are still rising and wages are growing between 4% and 5%, inconsistent with the Fed's goals.
Inflation may hover near 3%, but most consumers are feeling the shock of the higher cost of living, and most families are struggling to pay bills.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.01% to 5,608.62, the Nasdaq Composite rose 0.06% to 17,887.95, and the Russell 2000 index advanced 1.2% to 2,167.50.
The yield on 2-year Treasury notes edged lower to 4.05%, 10-year Treasury notes decreased to 3.86%, and 30-year Treasury bonds inched higher to 4.12%.
WTI crude oil decreased $0.12 to $73.77 a barrel, and natural gas prices edged up 4 cents to $2.27 a thermal unit.
Gold advanced by $22.68 to $2,525.67 an ounce, and silver increased by $0.39 to $29.80.
The dollar index, which weighs the US currency against a basket of foreign currencies, edged lower to 101.79.
U.S. Stock Movers
Palo Alto Networks soared 1.9% to $350.0, and the cyber security company reported better-than-expected quarterly results and raised its stock repurchase size by $500 million.
The company guided fiscal first quarter earnings per share between $1.47 and $1.49 and revenue between $2.1 billion and $2.13 billion.
Lowe's Companies declined 1.1% to $240.50, and the home improvement retailer reported mixed quarterly results.
In the fiscal second quarter, the specialty retailer earned $4.10 a share, beating the estimate of as low as $3.99, and revenue was $23.59 billion, slightly lower than the estimate of $23.85 billion.
The company also lowered its annual outlook, citing softening demand growth after three years of strong growth.
Paramount Global Class A decreased 1.6% to $22.90 after reports that Edgar Bronfman Jr. proposed to acquire National Amusement, which owns a controlling stake in the media company.
The new proposal comes a month after Paramount and Skydance Media and their group of investors agreed to buy the company.
Hawaiian Holdings soared 11.5% to $17.70 and Alaska Air Group gained 1.4% to $35.55 after the U.S. Justice Department approved the $1.9 billion merger of two airlines.
The two companies are now seeking merger approval from the U.S. Transportation Department.
Europe Movers: Antofagasta, Jyske Bank, Nordex, Oil Stocks, Semiconductor Equipment Stocks
Inga Muller
20 Aug, 2024
Frankfurt
European markets extended gains amid improving global market sentiment and growing speculation that the central banks in Europe and the U.S. are ready to lower rates.
Sweden's Riksbank cut its policy rate by 25 basis points to 3.5%.
The Swiss trade surplus shrank in July after exports inched lower and exports advanced.
The DAX index decreased by 0.04% to 18,414.31; the CAC-40 index rose by 0.1% to 7,509.62; and the FTSE 100 index decreased by 0.7% to 8,295.11.
The yield on 10-year German bonds edged higher to 2.24%, French bonds inched up to 2.97%, the UK gilts edged higher to 3.94%, and Italian bonds inched up to 3.62%.
Semiconductor equipment stocks traded higher after AMD announced its plans on Monday to acquire ZT Systems for $4.9 billion.
ASML Holding jumped 2% to €846.20, and BE Semiconductor soared 1.5% to €123.85.
Jyske Bank decreased 0.1% to DKK 534.0 after the Danish bank reported an increase in profit in the first half and estimated annual profit to be near the upper end of the range for 2024.
Net income increased 5% to DKK 2.6 billion, driven by higher net interest income and improvements in capital market activities.
The company also confirmed it launched its DKK 1.5 billion stock repurchase program during the period.
Nordex SE advanced 0.8% to €13.96, and the wind turbine maker received orders for five turbines totaling 102 MW from Akfen Renewable Energy in Turkey.
Energy explorers declined after crude oil prices fell to a two-week low amid China demand growth worries and elevated tensions in the Middle East.
BP Plc declined 1.8% to 433.96 pence, Shell PLC dropped 1.7% to 2,766.0 pence, and TotalEnergies eased 0.8% to €62.40.
Antofagasta increased 0.2% to 1,883.50 pence after the UK-based mining company reported a slight decline in pre-tax profit in the first half from the previous year.