Asian stocks climb as oil crawls up from 10-month low

SINGAPORE - Asian stocks advanced on Thursday as oil prices inched up after hitting a 10-month low overnight on concerns over a supply glut and falling demand, dragging US and European shares lower.

MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.2 percent.

Japan's Nikkei and South Korea's KOSPI were flat, while Australian shares rose 0.4 percent.

The Philippine Stock Exchange Index opened little changed at 7,882.54.

Crude oil crept up from multi-month lows hit on Wednesday on concerns over growing US production and reduced Chinese refinery activity.

"The time for contrarian trades in oil is fast approaching, but I would want to see some stability in price and the technicals start to become more convincing," said Chris Weston, chief market strategist at IG in Melbourne.

US crude futures rose 0.3 percent or 13 cents to $42.66 a barrel. They closed down 1.6 percent on Wednesday after touching their lowest level since August.

Global benchmark Brent climbed 0.2 percent or one cent to $44.92. It closed down 2.6 percent on Wednesday after touching a seven-month low.

The resulting decline in oil stocks hit stocks in Europe and on Wall Street overnight.

Britain's FTSE, Germany's DAX and France's CAC 40 closed between 0.3 percent and 0.4 percent lower.

The Dow Jones Industrial Average closed down 0.3 percent, while the S&P 500 was slightly lower. Nasdaq closed up 0.7 percent, lifted by biotech stocks.

Financial stocks also contributed to losses on Wall Street, driven lower by a drop in the Treasury yield curve to its flattest in almost a decade, as investors tried to reconcile a hawkish Federal Reserve with deteriorating inflation measures.

Boston Fed President Eric Rosengren and Fed Vice Chair Stanley Fischer suggested they are concerned less about raising rates too fast or too high than about keeping them too low for too long.

“I think the market may be pricing in a little higher odds of another rate hike before the end of the year, and that is helping drive some of the flattening,” said Gennadiy Goldberg, an interest rate strategist at TD Securities in New York.

The yield curve between five-year notes and 30-year bonds flattened to as low as 95.20 basis points, the narrowest since December 2007, on Wednesday and again early on Thursday.

The dollar was marginally lower on Thursday. The dollar index was at 97.523, following Wednesday's 0.2 percent loss.

The greenback bought 111.41 yen.

Sterling retained Wednesday's 0.3 percent gain to trade at $1.268 early on Thursday after the Bank of England's chief economist said he was likely to vote for an interest rate hike this year. Until now, he has been seen as largely supportive of keeping rates low.

The euro was flat at $1.117, holding on to Wednesday's 0.3 percent gain.

Spot gold rose 0.3 percent to $1,250.06 an ounce.

(Reporting by Nichola Saminather; additional reporting by Karen Brettell; Editing by Kim Coghill)

source: news.abs-cbn.com

Asia stocks, dollar subdued after French relief, S.Korea voted eyed

SINGAPORE - Asian stock markets edged down on Tuesday following a flat close on Wall Street, as investors searched for the next catalyst following France's presidential election, while oil inched higher on expectations OPEC supply cuts will be extended.

Financial spreadbetters expect Britain's FTSE 100, Germany's DAX and France's CAC 40 to all open flat.
The South Korean stock market, which finished at a record high on Monday, is closed for Tuesday's presidential election.

Liberal Moon Jae-in is widely expected to win the presidency, following months of leadership vacuum after former President Park Geun-hye was removed on charges of bribery and abuse of power.

The polls opened at 6 a.m. (2100 GMT on Monday) and will close at 8 p.m. (1100 GMT). The winner is expected to be sworn in on Wednesday after the Election Commission releases the official result.

Allies and neighbors are closely watching the election amid escalating tensions over North Korea's accelerating development of weapons since it conducted its fourth nuclear test in January last year. It conducted a fifth test in September and is believed ready for another.

North Korea would be keen to see a Moon victory. Its official Rodong Sinmun newspaper said in a commentary on Monday the time had come to put confrontation behind the Koreas by ending conservative rule in the South.

"South Korean markets had not registered significant risk-off sentiment similar to other economies pre-elections, and this is no surprise," Jingyi Pan, market strategist at IG in Singapore, wrote in a note.

"The largely similar stance on policies by the Presidential candidates provides little chance of surprise as compared to last week's French election. Meanwhile, the filling of the political vacuum could go a long way to benefitting the economy."

The Korean won weakened 0.25 percent on Tuesday, with the dollar buying 1,135.52 won.

MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.2 percent on Tuesday.

Japan's Nikkei was slightly lower.

China's CSI 300 index retreated 0.3 percent in its sixth straight session of losses amid concerns over tighter financial regulations. Hong Kong's Hang Seng reversed earlier losses to trade up 0.35 percent.

Taiwan stocks pulled back to trade 0.25 percent lower on profit taking after earlier surpassing the 10,000-point mark to hit a two-year high.

The MSCI World index, which touched a record high overnight, dropped about 0.1 percent.

The dollar was flat at 113.285 yen, retaining most of Monday's 0.4 percent gain.

The dollar index was also steady at 99.11.

The euro was steady at $1.0927 after tumbling 0.7 percent on Monday.

"The euro's retreat was driven solely by profit-taking. I think it is going to regain momentum over time," said Yukio Ishizuki, senior currency analyst at Daiwa Securities.

French stocks slumped 0.9 percent overnight, their biggest one-day loss in almost three weeks, as investors took profits following strong gains in the run-up to Sunday's vote that saw the market favorite, centrist Emmanuel Macron, elected president.

Germany's DAX closed 0.2 percent lower, while Britain's FTSE was marginally higher.

On Wall Street, all three major indexes closed flat, holding near recent all-time highs. The CBOE Volatility Index closed at 9.77, its lowest since December 1993.

In commodities, oil market sentiment swung between optimism over statements from major oil-producing countries that supply cuts could be extended into 2018 and lingering concerns over slowing demand and a rise in U.S. crude output.

Us crude inched up 0.1 percent to $46.47 a barrel.

Global benchmark Brent also rose 0.1 percent to $49.39.

Copper remained close to the four-month low touched on Monday after data showed a sharp drop on imports into China, the world's biggest consumer.

London copper slipped 0.1 percent to $5,481.50 a tonne on Tuesday, after falling to as low as $5,462.50 on Monday.

Gold recovered from a seven-week trough touched on Monday. Spot gold rose about 0.1 percent to $1,226.60 an ounce. (Reporting by Nichola Saminather; Additional reporting by Hideyuki Sano; Editing by Eric Meijer and Sam Holmes)

source: news.abs-cbn.com

World markets end volatile year mostly in the black

Most world stocks markets finished 2016 in positive territory despite shock votes in Britain and the United States, but the outlook for 2017 is clouded by looming European elections and Brexit.

The year witnessed a wave of anti-establishment populism, which saw Britain vote to leave the EU and maverick billionaire businessman Donald Trump elected as US president.

Both unexpected outcomes sparked a brief tumble on global equity markets, but many have since staged a stunning recovery to finish 2016 in the black.

London's FTSE 100 gained 14.3 percent over the year, while Frankfurt's DAX 30 added about 6.9 percent and the Paris CAC 40 won 4.9 percent.

In the US, all three major indices enjoyed robust gains, with the Dow Jones Industrial Average jumping 13.4 percent, the S&P 500 9.5 percent and the Nasdaq 7.5 percent.

Japan's Nikkei rose 0.4 percent in 2016, marking the fifth consecutive annual increase and registering its highest year-end close in two decades on optimism over the incoming US government.

Shanghai slumped more than 12 percent on the back of massive capital flight and a languishing yuan currency.

Equities continued to receive support from robust central bank stimulus programs in Europe, Japan and elsewhere, although the US Federal Reserve raised interest rates in December and signaled it plans more tightening in 2017.

A 50 percent jump in oil prices -- fueled in part by the decision of the Organization of the Petroleum Exporting Countries to cut production -- also supported stocks.

That helped boost the Bovespa in Sao Paolo, which jumped nearly 40 percent on strength in commodity prices and the resolution of an impeachment drama involving former president Dilma Rousseff, which ended with the installation of center-right President Michel Temer in August.

-- FTSE sparkles --

Since Brexit, London's FTSE 100 blue-chip index has soared to end the year in record-breaking form, as the British economy shrugged off the impact of the impending divorce from the EU.

"Fears of an imminent UK recession following Brexit proved wide of the mark thanks largely to the resilience of consumer spending," NFS Macro analyst Nick Stamenkovic told AFP.

"Indeed, Brexit was viewed as a local rather than global issue, prompting a sharp turnaround in the fortunes of world stock markets."

Markets also briefly tanked on November 9 after Republican Trump defeated Democrat and market favorite Hillary Clinton to capture the White House.

Yet Wall Street has since enjoyed a blockbuster run with the Dow Jones Industrial Average making a push towards 20,000 points. In the end, the blue-chip index finished at 19,762.60, logging its best year since 2013.

New York has been boosted by expectations that Trump -- who will be inaugurated on January 20 -- will honour election pledges to ramp up infrastructure spending, cut taxes and streamline regulations.

Markets are pricing in "all the good stuff while ignoring for now potential consequences for the dollar, deficits, interest rates, trade, inflation and the uncertainty principle," JPMorgan Asset Management strategist Michael Cembalest said in a research note.

"Whether this benign view is accurate or not will be a major driver of markets next year."

-- Rise of populism --

Looking ahead to 2017, the spotlight is now on upcoming European elections.

The Netherlands heads to the polls in March, followed by France in May, and Germany in the autumn.

Further gains by populist candidates would reverberate through Europe as Brussels moves into the thick of negotiations with Britain over Brexit.

VTB Capital analyst Neil MacKinnon also highlighted the region's banking problem after the European Central Bank called for Italian lender Monte dei Paschi di Siena (BMPS) to receive a bailout of 8.8 billion euros.

Italy's stock market shed 10 percent over the year.

In the US, investors largely have disregarded worries about the unpredictable Trump, including fears his tough posture towards China could lead to a trade war and that his embrace of Russian President Vladimir Putin could roil international alliances.

But reality could trump expectations.

And expectations are high for Trump's first 100 days, which are anticipated to include progress on these key policies, said Sandy Sanders, a senior portfolio manager at Manulife Asset Management.

"Everyone is going to be laser-like focused on what's going through Congress and the Senate and then to the president's desk and they're going to want to see deliverables on that tax reform," Sanders said.

In foreign exchange, many economists predict the euro could slump to parity against the dollar next year, aided by the Federal Reserve's hawkish stance on interest rates.

The Fed's bullish outlook this month pushed the dollar to 10-month yen highs and sent it heading towards parity with the euro for the first time since 2002.

- Key figures around 1630 GMT -

New York - Dow: DOWN 0.3 percent at 19,762.60 (close)

New York - S&P 500: DOWN 0.5 percent at 2,238.83 (close)

New York - Nasdaq: DOWN 0.9 percent at 5,383.12 (close)

London - FTSE 100: UP 0.3 percent at 7,142.83 (close)

Frankfurt - DAX 30: UP 0.3 percent at 11,481.06 (close)

Paris - CAC 40: UP 0.5 percent at 4,862.31 (close)

EURO STOXX 50: UP 0.3 percent at 3,282.94

Tokyo - Nikkei 225: DOWN 0.2 percent at 19,114.37 (close)

Hong Kong - Hang Seng: UP one percent at 22,000.56 (close)

Shanghai - Composite: UP 0.2 percent at 3,103.64 (close)

Euro/dollar: UP at $1.0515 from $1.0484

Dollar/yen: UP at 1.1698 yen from 116.63 yen

Pound/dollar: UP at $1.2322 from $1.2265

source: news.abs-cbn.com

Global markets: Stocks nudge higher after final US presidential debate

LONDON - Stock markets inched higher but the Mexican peso was mixed after the third and final US presidential debate, which was judged to have given no clear boost to Donald Trump's hopes of winning the White House.

The peso is seen as the chief proxy for market pricing of the Republican candidate's chances in view of his promises to impose tough limits on immigration. It climbed to a six-week high against the dollar in the immediate aftermath of the debate but was down on the day in European trade.

A win for Democrat Hillary Clinton next month - now predicted clearly by polls - is also seen as opening the way for a rise in interest rates, which a number of US Federal Reserve policymakers have all but promised for December.

The peso lost 0.3 percent in morning trade in Europe to 18.567 per dollar. Against a basket of currencies used to measure its broader strength, the dollar was up just under 0.1 percent, close to seven-month highs hit earlier this week.

"The likelihood of Donald Trump becoming president has nose-dived recently to as low as a one in eight probability ... (and) last night's debate has not provided that game-changing moment," said Lee Hardman, a currency strategist with Bank of Tokyo-Mitsubishi in London.

"The reduction in the political risk premium has helped the US dollar to strengthen broadly this month."

New York Fed President William Dudley overnight gave one of the clearest signals yet that the world's largest economy is ready to take another step away from the ultra-low interest rates that have prevailed since the 2008 financial crash.

He said the Fed would move this year if the economy remains on track. Markets now price in a roughly 70 percent chance of a Fed hike in December.

ECB EYED
The European Central Bank, as expected, changed nothing in policy at its own meeting on Thursday. President Mario Draghi's post-meeting news conference (1230 GMT) will be eyed for confirmation that the bank may extend its bond-buying next year but also for more signs of reticence among policymakers about keeping interest rates endlessly in negative territory.

Among the best news for stocks this week has been a series of upbeat results for US banks, driven chiefly by bond, commodity and currency trading, and the European banking index outperformed the main indexes on Thursday.

France's CAC 40 and Germany's DAX were around 0.2 percent higher in morning trade. Britain's FTSE 100 dipped by around 0.1 percent, but the bank index was up by 0.8 percent.

US stock markets were also set to open marginally higher.

Earlier, Asian stock markets had advanced, propelled by strong US earnings and oil prices that are near a 15-month high. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.1 percent. Japan's Nikkei extended its gains to 1.1 percent as the yen weakened.

China's CSI 300 was also up 0.1 percent, while Hong Kong's Hang Seng index climbed 0.6 percent.

With 70 companies in the S&P 500 having reported earnings through Wednesday morning, 80 percent have topped expectations. Third quarter earnings are now expected to increase 0.5 percent, according to Thomson Reuters I/B/E/S, which would be the first quarter of growth in five.

Energy shares also contributed to the gains on Wall Street but US crude was down 1.4 percent to $50.88 a barrel on Thursday, after surging 2.6 percent to close at $51.60 the previous session. Brent crude also fell back to $51.92, after climbing 1.9 percent on Wednesday.

"We have quiet commodity markets as the oil price advance pauses, quiet bond markets amid a lack of direction from U.S. data, and stronger Asian equity markets," analysts from French bank Societe Generale said in a morning note.

"(That hasn't) translated into FX strength around the region, but has helped the yen drift a little lower."

source: www.abs-cbnnews.com

Stocks stumble after North Korea nuclear test rattles markets

SINGAPORE/TOKYO - Asian shares extended losses after North Korea conducted its fifth and most powerful nuclear test on Friday, heightening geopolitical tensions in the region at a time when investors are grappling with slowing global growth.

Stocks were already on the back foot when the North Korean news rattled markets, with uncertainty over the prospect of further easing from the European Central Bank pressuring global equities and bonds.

European shares look set to follow Asia lower, with financial spreadbetters expecting Britain's FTSE 100, Germany's DAX and France's CAC 40 to all open down 0.1 percent.

MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.5 percent after touching a 13-month high on Thursday. The decline shrank gains for the week to 2.5 percent.

Japan's Nikkei closed flat after pulling back earlier on reports of the North Korean nuclear test. It up 0.2 percent for the week.

North Korea's nuclear test set off a blast that was more powerful than the bomb dropped on Hiroshima, with the nation saying it had mastered the ability to mount a warhead on a ballistic missile.

South Korea's KOSPI also extended losses on its neighbor's nuclear activity. After opening 0.7 percent lower, it was last trading down 1.3 percent from Thursday's close.

China's CSI 300 index was 0.25 percent lower, and the Shanghai Composite was down 0.2 percent. They are set for gains of 0.7 percent and 1 percent, respectively, for the week.

China's consumer price inflation slowed to its weakest pace in almost a year in August, missing expectations.

Still, moderating declines in the producer price index added to recent evidence of a steadying economy.

That evidence included data on Thursday showing China's imports rose unexpectedly in August for the first time in nearly two years, suggesting domestic demand may be picking up. Exports also showed signs of improvement, falling less than expected.

Hong Kong was the sole gainer among major Asia ex-Japan markets, with shares up 1.4 percent, extending their weekly advance to 4.2 percent, the most in almost two months. The market has been buoyed by inflows from China as investors bet on gains ahead of the launch of a new cross-border share link.

On Thursday, ECB President Mario Draghi, speaking after the central bank kept its policy on hold as expected, said the ECB was looking at options to continue its money-printing program, but maintained the March end-date for asset purchases.

That disappointed investors who were looking for more immediate action, including an extension or expansion of the current plan, or at least clearer hints of future actions.

"President Draghi's comment that an extension of the current quantitative easing program was not discussed led to a hawkish market interpretation of the meeting," Shane Oliver, head of investment strategy at AMP Capital in Sydney, wrote in a note.

However, inflation levels that remain below target and various other dovish comments from Draghi "indicate that an extension of the quantitative easing program beyond its March 2017 expiry at its December meeting is likely," Oliver added.

Overnight on Wall Street, the S&P 500 lost 0.22 percent, weighed down by a 2.6 percent fall in Apple on disappointment over its latest iPhone, though gains in energy shares offset losses in most other sectors.

German shares bore the brunt of the ECB's let-down, and France also retreated, but shares in Britain and Southern Europe gained.

Global bond markets also took a hit with the 10-year German Bund yield rising to minus 0.055 percent from minus 0.118 percent on Wednesday.

U.S. bond yields also jumped, with the 30-year bond yield rising to one-month highs of 2.328 percent on Thursday. They pulled back slightly to trade at 2.3102 on Friday.

The euro climbed to $1.1328, its highest since Aug. 26, following the ECB meeting before giving up most of its gains to stabilize around $1.1282. It is set for a 1.1 percent rise this week.

The dollar retreated 0.3 percent to 102.145 yen, surrendering some of Thursday's gains resulting from the wider gap between U.S. and Japanese bond yields. It is poised to end the week 1.8 percent weaker.

With the ECB meeting out of the way, the focus now shifts back to the Fed's policy meeting later this month.

"A rate hike in September is highly unlikely," said Hiroko Iwaki, senior bond strategist at Mizuho Securities.

"But unless the Fed sends a message, it will be difficult for them to make the markets price in a rate hike by the end of the year. So they could say something like they will consider a hike in coming months," she said.

Oil prices pulled back after surging more than 4 percent on Thursday to two-week highs on a slump in U.S. Gulf Coast imports to a record low led to a surprisingly large drawdown in U.S. crude stocks.

Brent rose to as high as $50.14 per barrel on Thursday. It pulled back 0.9 percent to $49.54, still up 5.8 percent this week.

U.S. crude climbed as high as $47.75 on Thursday. It retreated 0.8 percent to $47.22, but remained on track for a 6.3 percent advance for the week.

The weakness in the U.S. dollar this week has offered gold a boost. Spot gold has risen 1 percent to $1,337.95 this week, the biggest weekly gain in six weeks.

source: www.abs-cbnnews.com

Asia stocks skid as crude fails to sustain bounce

TOKYO - Asian shares and the dollar surrendered their gains on Thursday as recently volatile crude oil prices seesawed lower, although European shares were still expected to mark opening gains.

Financial spreadbetters predicted Britain's FTSE 100 to open up as much as 1.5 percent. Germany's DAX was seen rising by as much as 1.1 percent, and France's CAC 40 was seen advancing by as much as 1.2 percent.

S&P500 e-mini futures ESc1 were down about 0.6 percent in late Asian trade. On Wall Street overnight, an uptick in U.S. crude oil from 2003 lows helped major indexes pull away from losses of more than 3 percent, but they still finished more than 1 percent lower.

The European Central Bank will take center stage with its regular policy meeting later in the session. Central bank policymakers are expected to hold interest rates steady but highlight increasing risks to growth and inflation, while keeping the door open for further easing measures later this year.

"With last month's December disappointment still fresh in the memory, ECB President Mario Draghi will have to convince the markets that the ECB has a plan, and the ammunition to cope with the further slide in inflationary pressures that is likely to ripple across Europe in the coming weeks," said Michael Hewson, chief market analyst at CMC Markets in London.

Crude oil succumbed to added pressure on prices and its losses continued on Thursday.

The new front-month U.S. March oil futures contract CLc1 was down 0.7 percent at $28.15 a barrel, giving up an earlier rise. Brent crude LCOc1 dropped 0.6 percent to $27.72 in Asian trade.

MSCI's broadest index of Asia-Pacific shares outside Japan erased early solid gains and teetered in and out of negative territory in afternoon trade. It was last down 0.5 percent.

Japan's Nikkei average ended down 2.4 percent, adding to its 3.7 percent plunge in the previous session.

The Shanghai Composite Index slipped 0.9 percent, while China's bluechip CSI300 index was down 0.8 percent. It has lost around 15 percent since the beginning of the year.

David Dai, Shanghai-based investor director at Nanhai Fund Management Co, said fears of a prolonged bear market were, nevertheless, overdone.

"With stocks having fallen so much, much of the risk has been priced in and another free-fall is quite unlikely, although the chance of a sustainable rebound is slim," he said.

The dollar index, which tracks the U.S. unit against a basket of six counterparts, was down about 0.1 percent at 99.013.

The dollar turned back toward a one-year low against its perceived safe-haven Japanese counterpart on Wednesday.

The greenback shed about 0.1 percent to 116.75 yen after falling to 115.97 on Wednesday, undermined by U.S. data.

U.S. consumer prices unexpectedly fell in December, suggesting inflation was more sluggish than the U.S. Federal Reserve believed.

Other Wednesday data showed a drop in housing starts and building permits last month, which led investors to pare expectations of further interest rate hikes this year.

The euro edged up about 0.1 percent to $1.0893, ahead of the ECB meeting later in the session.

source: www.abs-cbnnews.com