World Markets Look Higher on China Engineered Rebound, Euro Under Cloud

Nichole Harper
09 Jul, 2015
New York City

Indexes on both sides of Atlantic rose after China halted market slide and hope ran eternal in the euro zone. Athens government is scheduled to offer its list of reforms before the Sunday deadline. Alcoa kicked off earnings season with earnings falling short of expectations.

[R]12:20 PM – Indexes on both sides of Atlantic rose after China halted market slide and hope ran eternal in the euro zone. Athens government is scheduled to offer its list of reforms before the Sunday deadline. Alcoa kicked off earnings season with earnings falling short of expectations.[/R]

Stocks on Wall Street rebounded after a week of decline extended by a big fall yesterday following losses in China.

Market indexes on Wall Street powered ahead of after Chinese regulators took steps and indexes in Shanghai jumped back nearly 6%, the large one day gain in six years.

Chinese regulators prevented major shareholders holding more than 5% stake in a company from selling stocks for six months and also permitted banks from rolling over loans linked to stock holdings.

The move, at least for now, halted the market slide and trimmed one-month loss to 25% and market index gain to 80% in the last twelve months.

Seasonally adjusted weekly jobless claims jumped 15,000 to 297,000 from the previous week revised claims of 282,000, the Department of Labor said.

On Wall Street, Tollbooth Strategy Index jumped 1.1% or 116.88 to 10,646.70.

S&P 500 index gained 0.8% or 16.12 to 2,062.80 and the Nasdaq Composite Index increased 0.9% or 47.25 to 4,957.01.

Crude oil in New York rose $1.12 to $52.77 a barrel and gold slid $1.10 to $1,162.40 an ounce.

U.S. Movers

Alcoa Inc jumped 4% or 42 cents to $10.92 after the aluminum, titanium and nickel producer reported revenues in the second-quarter ending in June increased 1.7% to $5.9 billion from a year ago period.

Net income in the quarter rose 1.4% to $140 million or 10 cents per diluted share compared to $138 million or 12 cents from the same quarter last year.

PepsiCo, Inc ((PEP)) increased 31 cents to $95.92 after the food and beverages maker reported revenues in the second-quarter ending on June 13 declined 6% to $15.9 billion from a year ago period.

Net income in the quarter was flat at $1.98 billion but diluted earnings per share increased to $1.33 from $1.29 in the same quarter last year.

Walgreens Boots Alliance Inc ((WBA)) soared 4.6% or $3.98 to $89.90 after the drugs retailer reported sales in the third-quarter ending in May climbed 48.4% to $28.8 billion from a year ago period.

Retail pharmacy U.S. division comparable drugstore sales jumped 6.3%.

Net income in the quarter surged 82.4% to $1.3 billion or $1.18 per diluted share compared to $714 million or 74 cents from the same quarter last year.

Separately, the company announced Stefano Pessina will assume permanent chief executive. Pessina, interim executive vice president had assumed the role since Walgreen veteran George Wesson left the company after a power struggle.

Pessina played a key role in in the merger of Alliance Boots with Walgreens.

European Markets

European markets rebounded following a reversal in Chinese securities after regulators took steps to arrest the fall in market indexes.

In addition, growing number of nations and leaders in the euro zone and around the world called for a debt restructuring as part of bailout conditions for Greece.

Donald Tusk, European Council President joined others and asked lenders to restructure Greek debts in exchange of credible reforms.

In London trading, FTSE 100 index jumped 1.5% or 100.13 to 6,591.71 and in Frankfurt the DAX index increased 2.3% or 247.25 to 10,995.76.

In Paris, CAC 40 index advanced 2.6% or 121.61 to 4,760.63.

AstraZeneca Plc gained 0.9% to 4,233 pence after the U.K.-based biopharmaceutical company agreed to sell its international global rights for gastroenterology drug Entocort to Switzerland-based Tillotts Pharma AG owned by Zeria Group for about $215 million.

The transaction is expected to close in second-half of this year.

Asian Markets

Nikkei average in Tokyo rebounded after indexes in Shanghai and in Hong Kong jumped after Chinese regulatory steps. Machinery orders in Japan rose 0.6% in May following 3.8% increase in April. Fast Retailing said nine-month sales increased 24%.

Nikkei average in Tokyo rebounded following resurgent markets in Hong Kong and Shanghai and machinery orders in May rose more than expected.

The seasonally adjusted private-sector machinery orders in May jumped 0.6% to 907.6 billion yen followed by 3.8% increase in April, the Cabinet Office said today.

On a seasonally adjusted basis, total value of machinery orders in May declined 6.2% from the previous month.

M2 money stock in June climbed 3.8% to 908.7 trillion yen from upwardly revised 4.1% increase in May, the Bank of Japan reported.

The Nikkei 225 Stock Average gained 117.86 or 0.6% to 19,855.50 and the broader Topix index fell 2.59 to 1,579.89.

The yen closed at 121.37 against a dollar.

Fast Retailing Co Ltd jumped 4.1% to 57,460 yen after the casual apparel retailer reported net sales in the nine-month ending in May soared 23.9% to 1.35 trillion yen from 1.09 trillion yen in a year ago period.

Net income in the quarter surged 51.5% to 132.36 billion yen compared to 87.34 billion yen and diluted earnings per share jumped to 1,296.99 yen from 859.29 yen in the same period a year ago.

The company forecasted net sales in the year to climb 19.3% to 1.65 trillion yen and net income to advance 61% to 120 billion yen.

Toshiba Corp declined 2.1% to 386.30 yen after the Nikkei business daily reported diversified industrial conglomerate plans to generate about 200 billion yen or $1.7 billion through the assets sales, including part of its stake in Westinghouse nuclear power unit.

The Nikkei added the company found accounting irregularities in almost all business segments, including semiconductors.

The Nikkei report also noted that the industrial conglomerate is in talk with banks for credit up to 600 billion yen or $4.9 billion, however company spokesman Hirokazu Tsukimoto declined to comment.

Stocks in Mumbai extended losses but markets in Asia rebounded after China regulatory lifted markets in Shanghai and in Hong Kong.

Chinese regulators prevented institutional investors with holders of more than 5% stake from selling stocks and allowed banks to roll over debts linked to stocks.

Rupee strengthened 21 paisa to 63.39 against one U.S. dollar.

The Sensex Index slipped 114.06 or 0.4% to close at 27,573.66. The CNX Nifty fell 34.50 or 0.4% to 8,328.55.

Essar Oil plans to sell its 49.9% stake in its Vadinar refinery to Russia-based Rosneft. Eros International is in advanced talks to sell 10% stake in Eros Now to a fund based in Singapore.