Asia markets take beating after US data

HONG KONG - Asian markets tumbled Thursday, led by another huge sell-off in Tokyo, following a disappointing set of US data that fueled fears about the world's top economy.

Traders took their lead from New York and Europe, where equities and the dollar sank, while oil prices are rooted at multi-year lows.

Tokyo plunged 2.36 percent as exporters were stunned by the stronger yen, while Sydney fell 1.16 percent and Seoul lost 0.76 percent.

The US Commerce Department said retail sales fell in September for the first time in seven months, Total retail and food services sales dropped 0.3 percent from August, slightly more than the 0.2 percent expected on average by analysts.

Also Wednesday the Labor Department said US producer prices fell last month for the first time since August 2013. Analysts had expected a rise.

The news led to fears that the US economy, which has been showing strong signs of recovery this year, may be feeling the effects of a torpid eurozone, a slowdown in China and stuttering Japanese growth.

The Dow fell 1.06 percent -- although it had been more than two percent lower earlier in the day -- the S&P 500 shed 0.81 percent and the Nasdaq eased 0.28 percent.

In Europe London's FTSE 100 tumbled 2.83 percent to its lowest close since June 2013, while Frankfurt's DAX 30 lost 2.87 percent and the Paris CAC 40 sank 3.63 percent.

Wednesday's US figures also dampened any chance the Federal Reserve will lift interest rates from record lows any time soon, putting further downward pressure on the dollar.

The greenback just two weeks ago was at multi-year highs against other currencies in anticipation that the Fed would move more quickly than other central banks to tighten monetary policy.

In early Asian trade it was at 106.00 yen, compared with 105.91 yen in New York but sharply down from 107.33 yen in Tokyo earlier Wednesday. At the start of the month had broken 110 yen for the first time in six years.

The euro was also boosted against the dollar and fetched $1.2832 Thursday, up from $1.2834 in New York and much stronger than the $1.2702 earlier Wednesday in Tokyo.

The single currency was also at 136.05 yen against 135.94 yen in New York.

Oil prices extended their losses as investors fret about weak demand caused by the downbeat economic outlook and the huge increase in supplies coming to the market.

US benchmark West Texas Intermediate for November delivery was down 94 cents at a two-year low of $80.83 a barrel in mid-morning trade and Brent crude tumbled 59 cents to $83.19, a four-year low.

Gold was at $1,224.00 an ounce against $1,233.25 late Tuesday.

source: www.abs-cbnnews.com

PH stocks fall for 3rd straight day

MANILA, Philippines - Philippine shares fell for a third day alongside other Asian markets, as investors sold risky assets ahead of a referendum in the Ukraine on the Crimean region joining Russia, which could ignite already high tensions between Moscow and the west.

The PSE index closed the day 0.6% lower at 6,391.24. The main index fell 1.4% for the week, marking the local stock market's first weekly loss in over a month.

Japan's Nikkei was a big loser, as investors bought up the safe haven yen, hurting the outlook for exporters and manufacturers.

Asian currencies were also sold, with the peso weakening against the dollar to close at P44.65.

Meanwhile San Miguel Corporation enjoyed its best gains since 2011, rising over nine percent.

Analysts though couldn't point to a clear reason for the surge.Some said investors maybe reacting to San Miguel chief Ramon Ang's resignation from troubled Alphaland, which is fighting delisting proceedings due to violations of disclosure rules.

Luigi Limlingan, managing director of Regina Capital, though noted this is speculative at best.

"RSA's resignation was timed with what happened to Alphaland so people may only infer," he said.

Others said it was positioning ahead of San Miguel's 2013 earnings report. But that is scheduled for release two weeks from now on March 27.

Nisha Alicer, head equity strategist at DA Market Securities however noted that while San Miguel is expected to have doubled profit last year, it is only due to its sale of Meralco shares.

"RSA upped guidance from P39 billion to P57 billion for 2013 full year income, mainly from the sale of its stake in Meralco. Core income will have to be key indicator for company's growth prospects," she said.

Another analyst said it could be reported strong demand for San Miguel Brewery's P20 billion bond sale, which would help ease concerns over the group's cash flow concerns.

Another said San Miguel might be hatching a blockbuster deal as part of its diversification, with Ang known to be shopping several of the group's assets for additional ammunition in his venture into energy and infrastructure.

At this point nothing is certain.

Gokongwei group's JG Summit holdings was the second biggest index gainer behind San Miguel, despite a sharp drop in the profit of its airline business Cebu Air. JG Summit's weight in the MSCI index was raised earlier this month, while it is set to join a FTSE index next week. Both indices are used as investment guides by fund managers.

source: www.abs-cbnnews.com

Why Fed tapering is bigger risk to Asia than assumed

SINGAPORE - Judging by the strength of the relief rally seen after the U.S. Federal Reserve did nothing last week, some Asian emerging markets could be far more vulnerable than earlier thought when the Fed finally does decide to slow its dollar printing presses.

"I anticipate more volatility in the markets linked to policy action out of the U.S.", said James Thom, investment manager for Aberdeen Asset Management, Asia Pacific equity portfolio. "When tapering does finally come through we’re likely to see more turbulence and probably a negative reaction in Asian markets and Southeast Asian markets in particular."

Investors had become sanguine about the risks associated with the Fed reducing its $85-billion-a-month bond-buying programme, since U.S. officials first flagged in May that they could start tapering this year.

That sparked a heavy sell-off in Asian currencies and stocks that gave investors reason to believe that the impact of tapering was largely priced into markets.

Markets recovering from June lows and their relative stability in the run-up to last week’s Fed meeting, at which the U.S. central bank had been expected to announce it was winding down its easy money policies, reinforced that view.

But the strength of the rally – in developed and emerging markets alike – that followed the Fed’s surprise decision to wait a while longer showed some markets were far more sensitive to tapering than had been appreciated.

"Markets in those countries that were hit hardest during the summer sell-off have rallied most since the Fed meeting," Capital Economics wrote in a research report. "The Indonesian rupiah .IDR=, Turkish lira .TRY=, Brazilian real .BRL= and Indian rupee .INR= have all gained around 3 percent against the dollar.”

Handicapped by big current account deficits, countries such as Indonesia and India had been hit so hard in recent months that many investors stopped worrying about tapering risks and focused on their economic problems instead. But the scale of their rally after the Fed’s decision to stand pat revealed just how big an issue tapering still is for them.

“The upside volatility was huge. Markets across the board jumped and the more battered the market the bigger the jump,” said one long-only portfolio manager in Singapore.

Jakarta stocks .JKSE, for example, at one point leapt more than 7 percent in reaction to the Fed's non-move, he noted, although Indonesia's economic problems were the same. The only thing that changed was the tapering outlook.

"When the Fed tapers later in the year there’ll be even greater downside volatility. More than we thought,” the portfolio manager said.

MORE TO COME

Just why investors had become over-sanguine about the risks attached to tapering is unclear.

After all, despite a sell-off over the past few months that took bourses and currencies to multi-year lows and bond yields to multi-year highs, not much of the money that flowed into Asia since the Fed began its bond buying programme in late 2008 has actually left the region.

Now, there is a growing realisation of the risk that this vast amount of funds could pour out, and investors are eyeing U.S. data nervously for stronger evidence of an economic recovery that could tip the Fed's hand.

"Tapering concerns are not over," said Chang Chiou Yi, regional strategist (ASEAN) at CIMB Research, adding that the big exporting economies of North Asia would fare better than those economies in Southeast Asia that are less export-focused.

Chang said government and central banks that had taken the precaution of securing currency swap agreements and raising interest rates had, at least, offset some of the downside risk.

Aberdeen's Thom agreed that Southeast Asian markets were more vulnerable. "Partly this is because Southeast Asian markets have been amongst the better performers and so they’re a natural source of profits for foreign investors. In that sense these markets are victims of their own success," he said.

"The second point to make though is that these markets are relatively illiquid and shallow, so when sentiment does change it tends to have an exaggerated impact as everyone is rushing for the door, and it’s just a small door, all at the same time. You see this particularly in markets like Indonesia and the Philippines.”

Asian markets have already surrendered most of the gains made since the Fed's decision, suggesting the euphoria is over and that investors are now making a more sober assessment of tapering risks.

source: www.abs-cbnnews.com

PH, Asian markets start the week in the green

MANILA, Philippines - The Philippine Stock Exchange index joined other Asian markets higher, on Japan's winning bid to host the 2020 Olympics and China's better-than-expected exports.

The PSEi closed 0.38% up at 5,997.04. Among the day's gainers were SM Investments, which rose 1% to P699; Ayala Corp. which jumped 0.93% to P540, and Universal Robina Corp., which went up 1.58% to P121.80.

First Metro Asset Management reduced its year-end target for the index to 6800, citing external risks which include the Federal Reserve's possible scaling back of its economic stimulus program.


At the foreign exchange market, the peso strengthened by 24 centavos to close at 44.24 against the dollar.

Asian stocks rise after strong Japan, China data

Asian markets rose Monday as strong Chinese trade data lifted hopes for the global economic outlook while Japanese stocks were boosted by improved growth figures and Tokyo's successful bid to host the 2020 Olympics.

Weaker-than-forecast US jobs figures raised concerns about the world's number one economy but also fuelled hope that the Federal Reserve will hold off winding down its stimulus programme for the time being.

Tokyo rose 2.48 percent, or 344.42 points, to 14,205.23. Japanese dealers bought into construction and real estate plays after Tokyo's Olympics success, while there was also cheer for better-than expected gross domestic product data for the April-June quarter.

Sydney rose 0.71 percent, or 36.5 points, to 5,181.5 in the first session back after the conservative Liberal/National coalition won a weekend general election in Australia as widely expected.

Shanghai soared 3.39 percent, or 72.53 points, to 2,212.52 and Hong Kong added 0.57 percent, or 129.43 points, to 22,750.65. Seoul closed 0.99 percent higher, adding 19.36 points to 1,974.67.

Chinese data on Sunday showed exports jumped 7.2 percent year-on-year to $190.6 billion last month, much better than the 6.0 percent expected by economists. It was also better than the 5.1 percent rise seen in July.

The figures are the latest in a string of good results out of Beijing that indicate China's painful slowdown over much of the first six months of 2013 may have come to an end. Earlier this month the government said manufacturing activity grew at its fastest pace in 16 months in August.

Investors were cheered by the news as Chinese growth is key to helping drive the economies of many other countries in the region.

Tokyo dealers were already in buying mood after the Olympics result when data was unveiled showing the Japanese economy grew 0.9 percent over the previous quarter in April-June, up from a preliminary reading of 0.6 percent.

On an annualised basis the economy expanded 3.8 percent, the government said, up from the first estimate of 2.6 percent. Annualised figures show the rate of growth if the data was stretched across an entire year.

"The Olympics, better-than-expected China's export data, and strong GDP data are all supporting the market today," Haruhiko Kuramochi, strategist at Mizuho Securities, told Dow Jones Newswires.

The Nikkei was also supported by a weaker yen as confidence in the global economy saw investors move into higher-risk assets looking for better returns.

In afternoon forex trade the dollar bought 99.60 yen, against 99.11 yen Friday in New York. The euro was at $1.3171 and 131.21 yen compared with $1.3180 and 130.62 yen.

The greenback suffered a sell-off on Friday after the US Labor Department said the economy added 169,000 jobs in August, below projections of 177,000. The report also lowered the estimates for jobs added in June and July.

However, while the result suggests the US economy is not as strong as hoped, it means the Federal Reserve's plans to reel in its stimulus programme may be put off a little longer.

Scott Wren, a senior equity strategist at Wells Fargo Advisors, said the report "wasn't good at all" but added: "It's a 'what's bad is good' type of thing."

Emerging markets -- especially in emerging economies -- were hammered last month as foreigners fled back to the West in expectations the Fed will start to cut back on its vast bond purchases by the end of the year.

On Wall Street the Dow fell 0.10 percent, and the S&P 500 and Nasdaq were flat.

While buying sentiment was strong, an ongoing dispute between Russia and the US over Syria had dealers on edge as presidents Barack Obama and Vladimir Putin failed Friday to reach agreement at a G20 summit on how to deal with the crisis.

On oil markets New York's main contract, West Texas Intermediate for delivery in October, was down 46 cents at $110.07 in late afternoon trade, while Brent North Sea crude for October shed 32 cents to $115.80.

WTI hit a 28-month high in New York trade Friday owing to the tensions between the US and Russia.

Gold cost $1,387.10 an ounce at 0810 GMT compared with $1,368.10 late Friday. - With ANC and Agence France-Presse

source: www.abs-cbnnews.com

PSEi drops below 6,000 on Wednesday

MANILA, Philippines - The Philippine Stock Exchange index is the worst market in Asia Pacific for the fourth time in three weeks.

Analysts blamed the losses on concerns about a strike on Syria and the Fed taper.

Foreign funds have also been on the longest streak of outflows from the PSE since 2011.

The PSE index fell 1.9% to settle at 5,968.33.

Among the day's big losers were SM Investments (down 2.7% to P681) and PLDT (down 2.11% to P2,790). Ayala Corp. fell 1.12% to P530, while GT Capital was down 0.88% to P793.

At the foreign exchange market, the peso ended little changed at 44.48 against the dollar.

Asian stocks mixed, profit-taking offsets upbeat outlook

Meanwhile, Asian markets were mixed on Wednesday as profit-taking and renewed concern about a US strike on Syria tempered buying sentiment, although Tokyo recouped early losses as the dollar approached 100 yen.

Wall Street provided a positive lead after the United States followed China and Europe in posting upbeat manufacturing data that raised hopes for the global economic outlook.

Tokyo ended 0.54 percent higher, adding 75.43 points to 14,053.87, following gains of more than four percent in the previous two sessions. Shanghai was up 0.21 percent, or 4.51 points, at 2,127.62.

Hong Kong fell 0.31 percent, or 68.36 points, to 22,326.22, while Sydney slipped 0.67 percent, or 35.0 points, to 5,161.6 and Seoul closed flat, edging down 0.71 points to 1,933.03.

September trading started strong on Monday and Tuesday after figures showed activity in China's factories at their highest level in 16 months, while eurozone manufacturing was at its highest for more than two years.

On Tuesday there were similar results from the United States, adding to growing hopes of a pick-up in developed nations, which investors hope can kickstart a global trend.

The economic data is welcome news after a tough August that saw widespread selling -- mainly in emerging economies -- as dealers bet the US Federal Reserve will soon begin to wind down its stimulus programme.

On their first day of trade after the long Labor Day weekend, shares on Wall Street advanced, with the Dow up 0.16 percent, the S&P 500 adding 0.42 percent and the Nasdaq 0.63 percent higher.

The improved outlook has helped the dollar push back towards the 100 yen level not seen since July. In Asian trade the greenback bought 99.60 yen in afternoon trade compared with 99.54 yen in New York Tuesday, and well up from the sub-96 mark seen last week.

The euro bought $1.3161 and 131.05 yen, against $1.3170 and 131.14 yen.

However, worries about Syria resurfaced after Republican House Speaker John Boehner and his right hand man Eric Cantor said they would support a strike on the regime over its alleged use of chemical weapons.

The move represented a rare gesture of unity in a divided Washington and left President Barack Obama hopeful of securing a vote for action in Congress next week.

Investors are nervous that any form of intervention could lead to a wider conflict in the Middle East.

On oil markets crude was mixed after rallying on supply fears in New York as Syria returned to the agenda, while there were also reports of a missile test in the Mediterranean by Israel.

New York's main contract, West Texas Intermediate for delivery in October, eased 46 cents to $108.08 in late Asian trade. Brent North Sea crude for October gained one cent to $115.69.

Gold cost $1,408.96 an ounce at 0815 GMT, up from $1,393.90 late Tuesday. With ANC and Agence France-Presse

source: www.abs-cbnnews.com

PSEi up for 4th straight day

MANILA, Philippines - The Philippine Stock Exchange index (PSEi) is up for a fourth day, boosted by relaxed draft rules on foreign ownership released by the Securities and Exchange Commission.

The main index settled at 6,665.12, up 1.02%.

Among the day's gainers were Alliance Global, which climbed 3.4% to P21.10 after getting approval to change the terms of a $500 million debt due in 2017. PLDT also rose 1.91% to P2,868, while Robinsons Land surged 2.04% to P25.

At the foreign exchange market, the peso weakened by 24 centavos to close at P41.7 against the dollar.

Meanwhile, Asian markets were mixed Tuesday after a top eurozone official suggested a levy on bank deposits used as part of the Cyprus bailout could be a template for future rescues in the troubled region.

Jeroen Dijsselbloem, who heads the Eurogroup of finance ministers, said the costs of bank recapitalisations should not fall on the public sector, but on bondholders, shareholders and, if necessary, uninsured deposit holders.

His statement, which came just hours after a last-minute deal to save the Cyprus financial sector, sent the euro tumbling to a four-month low in London.

The comments to the Financial Times -- that raise the prospect of a similar policy for bailouts in other nations -- also hit US and European shares, which had been in positive territory following Sunday night's agreement.

Tokyo lost 0.60 percent, or 74.84 points, to 12,471.62, Sydney slipped 0.80 percent, or 40.0 points, to 4,950.2 and Shanghai fell 1.25 percent, or 29.05 points, to 2,297.67.

But Hong Kong gained 0.27 percent, or 59.93 points, to 22,311.08 and Seoul climbed 0.30 percent, or 6.03 points, to 1,983.70.

"Cyprus has touched the nerves of a lot of people. I guess the question is who will be next, and what pressure such a deal will have on the ability of Cyprus to trade out of their issues," said Jonathan Barratt, chief executive officer at Barratt's Bulletin in Sydney.

"It raises a lot of questions about what is next for them, and what other nations within the EU will be subject to if they have a debt crisis," he told AFP.

Dijsselbloem later released a statement via Twitter saying Cyprus was a "specific" case.

"Mr. Dijsselbloem later revised his comments, which will take some of the sting out of the fallout on equities prices," SMBC Nikko Securities general manager of equities Hiroichi Nishi told Dow Jones Newswires.

Those comments helped the euro in New York claw back some of the losses that saw it hit a four-month low of $1.2830 in London, while it also picked up against the yen.

In Tokyo trade the single currency fetched $1.2874 and 121.31 yen, compared with $1.2853 and 120.96 yen late Monday in New York.

The dollar sat at 94.21 yen, from 94.10 yen.

However, Tim Waterer, senior trader at CMC Markets in Sydney, said: "The market is not convinced that what we have seen in Cyprus will not have long-term effects on the eurozone."

On Wall Street the Dow fell 0.44 percent, the S&P 500 eased 0.33 percent and the Nasdaq finished 0.30 percent lower.

Until Dijsselbloem's comments markets had been cheering the agreement in Brussels that meant Cyprus will receive a 10 billion euro rescue and save it from a possible exit from the eurozone.

Oil prices rose, New York's main contract, light sweet crude for delivery in May, gaining five cents to $94.86 a barrel and Brent North Sea crude for May up eight cents to $108.25.

Gold was at $1,596.27 an ounce at 1015 GMT compared with $1,602.70 late on Monday. - With report from ANC and Agence France-Presse

source: abs-cbnnews.com

PSEi closes at all-time high for 6th straight day

Philippine stocks are off to a great start this year, notching six record closes in all six trading days of 2013.

The Philippine Stock Exchange index settled at the 6,091.18 level, up 0.7% or 42 points. This boosted expectations the PSEi will soon reach the 6,100 level.

The main index reached a new intraday record at 6,095.07.



"For the sixth consecutive session, the market proved again that its performance is supported by the local economy's positive prospects. Interest in local companies also continues to rise as shown by trading activity, which has gotten off to a strong start relative to last year," PSE President and Chief Executive Officer Hans B. Sicat said in a statement.

Asian markets were  generally higher on Wednesday's trading, as the US corporate earnings season opened on a positive note.

Advancers beat decliners 109 to 73. Among today's gainers were Metropolitan Bank and Trust which rose 2.2% to P105.70, BDO Unibank which climbed 0.46% to P75.50. Philippine Long Distance Telephone went up 0.08% to P2,648.



The average daily turnover jumped 52% to P7.33 billion from P4.82 billion during the same period last year.
Meanwhile, at the foreign exchange market, the peso ended 6 centavos stronger, closing at P40.78 against the dollar.  - With ANC

source: abs-cbnnews.com

US economy hopes boost stocks, oil

NEW YORK — Wall Street stocks rose Friday and oil prices edged up as upbeat data reinforced a slightly better outlook for the US economy, curbing a bid for safe-haven US Treasury debt.

The euro was little changed, but was expected to face further weakness. Euro zone governments face large refinancing needs in early 2012, and investors say the region's leaders have not made much progress in dealing with their fiscal problems.

US economic data Friday was mixed, with consumer spending growth tepid and a gauge of business investment down for a second month. But there were new signs of improvement in the housing market, and there have been signs in recent weeks that the economy is improving .

"The data itself has been modestly stronger in the fourth quarter, but nothing that changes the baseline slow-growth story," said Andrew Slimmon, managing director, Global Investment Solutions of Morgan Stanley Smith Barney in Chicago.

This cautious outlook could keep stocks and other growth-oriented assets from appreciating much above current levels.

"Ultimately I'm not looking for a risk-positive first quarter. The growth picture is too troubling," said Brian Dolan, chief currency strategist, at Forex.com in Bedminster, New Jersey.

The Dow Jones industrial average ended up 124.35 points, or 1.02 percent, at 12,294.00. The Standard & Poor's 500 Index closed up 11.33 points, or 0.90 percent, at 1,265.33. The Nasdaq Composite Index finished up 19.19 points, or 0.74 percent, at 2,618.64.

The S&P finished up 3.7 percent for the week, breaking above its 200-day moving average and bringing its year-to-date result into positive territory. The Dow was up 3.6 percent on the week, and the Nasdaq closed up 2.5 percent on the week.

MSCI's world equity index rose 0.6 percent, but was on track to finish down 7.7 percent for the year.

The pan-European FTSEurofirst 300 index closed up 0.8 percent to its highest level in two weeks, though volume was far below average in advance of the Christmas holiday. The index ended up 3.5 percent for the week, paring its year-to-date loss to 12 percent.

The Japanese market was closed on Friday for a holiday.

US, European and some Asian markets will be closed Monday for the Christmas holiday.

Also Friday, the US Congress, after months of fierce bickering between the two major political parties, approved a two-month extension of a payroll tax cut that President Barack Obama argued is vital to the health of the economy as unemployment remains high.

The extension of the tax cut will preserve income for most Americans, supporting their purchases of goods and services.

A Wall Street Journal report published late Thursday that the Federal Reserve could leave interest rates near zero for longer than it has already said also fanned hopes of faster US growth and higher corporate profits.

The US central bank has previously said it would probably leave rates unchanged until at least the middle of 2013, and officials are considering offering interest rate forecasts that could suggest the Fed will keep rates on hold for longer.

Despite some encouraging signs from the world's biggest economy, the festering euro zone debt crisis has reined in investor enthusiasm for stocks, the euro and commodities.

The euro was flat against the US dollar at $1.3042 in light, choppy trading. The 17-nation common currency erased earlier losses and held above a recent 11-month low of $1.2945.

In a sign that the euro zone debt crisis is far from over, the yield on 10-year Italian government debt was just a touch below 7 percent, while the yield on 10-year Spanish sovereign debt was at 5.40 percent. If those yield levels persist, they are seen as crippling for the euro zone's third- and fourth-biggest economies, given Italy's and Spain's heavy debt loads.

US crude futures settled up 15 cents at $99.68 a barrel, while the February Brent contract in London ended up 7 cents at $107.96, erasing earlier losses.

For the week, spot US crude and London Brent futures were up 0.35 percent and 5.5 percent, respectively.

Spot gold prices edged up 0.1 percent at $1,605.70 an ounce and closed up 0.5 percent for the week after losing 8.4 percent over the previous two weeks.

As the demand for riskier investments rose, investors pared holdings of safe-haven US and German government bonds.

German Bund futures were down 0.2 percent on the day at 137.56, ending 0.2 percent lower on the week.

The yield on benchmark 10-year US Treasury note rose 7 basis points to 2.02 percent, its highest close in two weeks. — Reuters

source:gmanetwork.com