European shares dip as concern over U.S. politics, Ubisoft weighs

LONDON - European shares fell on Wednesday amid a global pullback in stock markets as worries about political turmoil in the United States led investors to seek safety after a strong run sent regional benchmarks to record highs.

The pan-European STOXX 600 fell 0.3 percent, as major regional benchmarks tracked a global dip in stocks and the dollar as concerns over U.S. President Trump multiplied.

Euro zone blue chips and the bloc's broader index of stocks both dropped 0.6 percent.

Britain's FTSE 100 on the other hand hovered close to its record high hit on Tuesday, outperforming European peers as gains among miners supported it.

Despite their falls on Wednesday, European benchmarks remain near recent highs, having risen sharply as investors pile in to the region on the back of an economic recovery, robust company earnings and voters' rejection of populist parties in elections.

"Markets broke upwards with the disappearance of concerns around the French election. Quite a lot of fast money came in and markets are just pausing now to digest that," said Stephen Macklow-Smith, head of European equities at JP Morgan Asset Management.

Ubisoft Entertainment, the third-biggest global entertainment company, fell 6 percent after it cut its mid-term sales forecast, reporting results near the bottom end of its target range after the close on Tuesday.

Raiffeisen Bank was a bright spot on a negative banking sector, up 3.5 percent after its first-quarter profit jumped more than expected as write-downs shrank.

Lloyds Bank gained 1.9 percent after the British government sold its last remaining shares in the bank, marking the end of an era after one of the largest financial crisis bailouts.

But the Netherlands' largest domestic lender ABN Amro fell 3.2 percent after its results, with traders citing a lower net interest margin and capital ratio, though the headline net income beat expectations at 615 million euros.

Thyssenkrupp was the top European gainer, up 4 percent after Tata Steel agreed the terms of a deal to cut benefits for its British pension scheme, removing a major obstacle to the potential merger of its steel assets with the German steel maker.

Thyssenkrupp's labour boss said the pensions deal does not lessen workers' opposition to a possible merger, however.

Gold miner Fresnillo rose 2.8 percent as the price of the safe-haven asset rose to a two week high.

Tullow Oil gained 2 percent after JP Morgan reiterated its 'overweight' rating on the stock, saying the oil company had improved its funding position, and valuation had returned to more compelling territory.

Norwegian fertilizer maker Yara got a boost from broker Liberum raising it to 'buy' from 'sell', saying prices of urea, a key ingredient in fertilizers, are close to a trough with fewer capacity additions ahead. Trading in Oslo was closed for the day, however, and the market will reopen on Thursday.

European earnings continued to paint a bright picture for the region's equities, with earnings growth for the quarter seen at 19 percent, according to Thomson Reuters data.

(Reporting by Helen Reid, Vikram Subhedar; Editing by Hugh Lawson)

source: news.abs-cbn.com

Asia stocks plummet, yen soars as risk aversion grips markets

HONG KONG - Asian stocks fell the most in more than four months and the Japanese yen jumped on Monday as risky assets took a hammering before key central bank meetings this week and while investors await Britain's stay-or-go referendum on European Union membership.

Further sapping confidence over recent days has been a steady drip of economic data that has highlighted an underpowered world economy despite years of heavy stimulus delivered by central banks.

European shares are set to open lower with spreadbetters expecting Britain's FTSE 100 to open down 0.4 percent, Germany's DAX to slip 0.8 percent, and France's CAC 40 to fall 0.9 percent.

The U.S. Federal Reserve, Bank of England, Swiss National Bank and the Bank of Japan will meet this week. All are expected to hold monetary policy steady against a backdrop of caution heightened by the global impact of a possible Brexit.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.7 percent, its biggest daily drop since Feb. 11. It is down almost 4 percent in the last two sessions.

Japanese stocks led regional losses with the benchmark index falling 3.2 percent in choppy trade.

"There are many long-term investors who have given up on Japanese stocks as there are no structural reforms being delivered. Meanwhile, monetary policy decisions only have short-term effects," said Michiro Naito, executive director at equity derivatives at JPMorgan who recently visited Asian investors.

Net selling by foreign investors from January through May was roughly 4.5 trillion yen ($42.07 billion) in Japanese cash equities, according to exchange data, a stark turn from net purchases of about 2.83 trillion yen in the same period last year.

Investors hunting for bright spots in Asia this year in China and India have also been disappointed by poor data.

Latest data showed China's fixed-asset investment growth cooling to 9.6 percent in January-May from the same period a year earlier, below market expectations, while the statistics bureau said downward pressures still exist in the economy.

"We have downgraded the China market because of the debt problems and we think by the third quarter, growth numbers would start reflecting a broader slowdown," said Francis Cheung, head of China and Hong Kong strategy at CLSA.

Reflecting the bearish sentiment, S&P e-mini futures were down 0.4 percent in Asia after Wall Street marked steep losses on Friday. A shooting spree in Orlando, Florida, in which 50 people were killed and similar number wounded only added to the pessimism.

In currency markets, the mood was one of risk aversion with the Japanese yen rising to a five-week high against the dollar.

The yen was trading at 105.88 per dollar, its lowest since May 3.

The British pound has whipsawed in recent weeks on news related to the June 23 referendum on its EU membership.

Early on Monday, the pound fell to as low as 150.63 yen, its lowest level since August 2013 while the euro fell to 119.16 yen, a level last seen in Feb. 2013.

Two polls on Saturday showed British voters were still divided on whether to stay or go.

"Ahead of the referendum, many look for sterling to underperform and the yen and Swiss franc to outperform," Marc Chandler, global head of currency strategy at Brown Brothers Harriman, said in a note.

"The euro and central and eastern European currencies are vulnerable, while risk assets, in general, are expected to weaken on a Brexit victory," he said.

Crude oil futures extended losses after falling 3 percent on Friday, pressured by the stronger dollar and data showing the U.S. oil drilling rig count rose for the second week in row.

U.S. crude futures fell 1.1 percent to $48.51 a barrel, while Brent slipped 1 percent to $50.03.

Government bonds benefited with the yield on the 10-year Japanese bond marking yet another record low.

Yields on JGBs with maturities out to 15-years were well into negative territory.

Gold rose, hovering close to three-week highs. Spot gold added 0.1 percent to $1,275.16 an ounce.

source: www.abs-cbnnews.com