Asian shares pull back after US techs knocked off highs

TOKYO - Asian stock markets sagged on Friday after U.S. tech shares retreated from recent rallies, though optimism on U.S. corporate earnings and the global economy underpinned overall sentiment.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.4 percent in early trade, with Samsung Electric, Asia's largest company by market capitalisation, dropping 2.0 percent.

Japan's Nikkei shed 0.3 percent. On Wall Street, the Dow industrials set a record closing high, helped by a 7.7 percent jump in Verizon, following the top U.S. wireless carrier's quarterly earnings.

But investors were spooked by a sudden drop in technology and transportation shares. The S&P 500 technology sector fell 2.0 percent at one point before ending the day down 0.8 percent.

The slide came even as Facebook shares gained 2.9 percent on the social media company's results, though Amazon.com shares fell 3.2 percent after the bell following the e-commerce company's results.

Yet investors' sentiment remained solid on the back of upbeat corporate earning results and a bright global economic outlook.

"Given the Dow is hitting a record high, it's hard to think market sentiment has suddenly changed," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.

The Philippine Stock Exchange opened at 8,050.93, up 0.06 percent.

The S&P 500 index is on track to post back-to-back, double-digit quarterly earnings growth for the first time in almost six years.

US durable goods orders, published on Thursday, surged 6.5 percent last month, the biggest gain in three years

The bullish report came on the eve of the government's advance second-quarter gross domestic product estimate on Friday.

Economists expect the data to show growth picking up to 2.6 percent from 1.4 percent in January-March.

A series of Japanese economic data released on Friday came in stronger than expected, with household spending rising more than expected and the jobless rate falling unexpectedly.

MSCI ACWI, a gauge of the world's 47 stock markets in dollar terms, hit record highs, having gained 2.8 percent so far this month,

If the gains are sustained by month-end it would mark the biggest monthly jump in a year and the ninth consecutive month of increases - the longest such spell since 2003-04.

In the currency market, the dollar regained some footing after slumping to a 13-month low against a basket of major currencies the previous day following the Federal Reserve's policy statement.

The euro consolidated at $1.1684, after hitting a 2 1/2-year high of $1.1777 on Thursday.

The dollar steadied around 111.21 yen, a tad above Monday's low of 110.625, its lowest in more than five weeks.

Oil prices held near eight-week high hit on Thursday, supported after key OPEC members pledged to reduce exports and the U.S. government reported a sharp decline in crude inventories.

Brent crude futures fetched $51.51 per barrel, after having climbed to $51.64 on Thursday. - with ABS-CBN News

(Editing by Shri Navaratnam)

source: news.abs-cbn.com

Asian shares hit 2-month high on solid US job growth

TOKYO - Asian shares hit two-month highs on Monday, extending their sharp gains in the previous four sessions, following upbeat U.S. jobs data and rebound in oil commodity prices.

Investors also look to Chinese markets' reaction to Beijing's new economic plans, which include a cut in the economic growth target to a range of 6.5 percent, and a moderate increase in the fiscal deficit to 3 percent of GDP.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.5 percent, paring about 80 percent of its losses since the start of 2016. Japan's Nikkei slipped 0.3 percent.

MSCI's broadest gauge of the world's stock markets also hit a two-month high on Friday, posting its largest weekly gain since October.

U.S. nonfarm payrolls grew by 242,000 jobs last month, beating forecasts for 190,000 new jobs, while the participation rate rose for three months in a row.

The upbeat figures, coming after data last week showing some signs of recovery in the U.S. manufacturing sector, eased worries that the U.S. economy could be slipping into recession under the weight of low oil prices and a stronger dollar.

"The U.S. job data helped to push back excessive pessimism on the U.S. economy. A brightening U.S. economic outlook is underpinning various risk assets," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.

On the other hand, average U.S. hourly wages unexpectedly dipped by 0.1 percent after a surprisingly strong 0.5 percent increase in January.

That there is no sign of inflation in wages despite a tightening in job markets, suggesting the Federal Reserve can afford to wait longer before raising rates.

As a result U.S. interest rate futures are now pricing in only one rate hike by the end of year, with virtually no chance seen of a rate hike in March.

The U.S. 10-year bond yield rose to one-month high of 1.902 percent on Friday but still way below its levels around 2.25 percent in December when the Federal Reserve raised interest rates for the first time in almost a decade.

That limited the dollar's attraction against other currencies. The dollar's index against a basket of six major currencies dipped to near two-week low of 97.019 on Friday and last stood at 97.328.

The euro rose to one-week high of $1.1043 on Friday and last stood at $1.0992 while the yen was little changed at 113.88 to the dollar.

The commodity-linked Australian dollar shot up to a 5 1/2-month high of $0.7444 on Friday and last stood at $0.7414.

"AUD/USD eased modestly in early thin Asian trading following the weekend commencement of China's National People's Congress (NPC). There have been no major positive surprises from the NPC so far," Commonwealth Bank currency strategist Joseph Capurso wrote in a note to clients, referring to China's 12-day annual national parliament.

Chinese Premier Li Keqiang said on Saturday China aims to keep its economy growing by at least 6.5 percent over the next five years while pushing hard to create more jobs and restructure inefficient industries.

Beijing's draft goal of running a fiscal deficit equivalent to 3 percent of GDP, while marking a rise from the previous year's target of 2.3 percent, could also disappoint some investors who hoped for higher deficit spending.

Elsewhere, oil prices hit near-three-month highs, extending their gains of about 10 percent last week.

Benchmark Brent crude futures rose to as high as $39.20 per barrel, their highest since mid-December. They last stood at $39.03, up 0.8 percent on the day.

On Friday, copper also jumped 3.6 percent to its highest level since early November.

source: www.abs-cbnnews.com

Asia stocks wary as China concerns remain, oil drops

HONG KONG/TOKYO - Asian stocks held near four-year lows and crude oil prices approached a 20 percent drop in less than two weeks as investors worried over the extent of China's economic slowdown and its impact on emerging markets.

MSCI's broadest index of Asia-Pacific shares outside Japan edged 0.4 percent higher but still stood near a four-year low touched on Monday, and was still down more than 8 percent since the start of 2016. It fell 12 percent last year.

"Investors are still concerned about the extent of China's slowdown and while we may be in the middle of a consolidation phase, we have yet to see any data indicating a turnaround which is feeding the overall uncertainty," said Ben Pedley, head of investment strategy for Asia at HSBC Private Bank in Hong Kong.

With investors still licking their wounds from last year's plunge in global commodity prices and a sharp selloff in Chinese markets, 2016 has brought about more pain for investment portfolios in the form of a deepening slowdown in the global economy and volatile Chinese markets.

Japan's Nikkei fell 1.3 percent after a market holiday on Monday, hitting a three-month low and down over 8 percent so far this year while Chinese stocks swung around in volatile opening trades.

According to MSCI global indexes, BRIC and other emerging market indexes have bled the most so far this year with losses of 7.2 and 6.8 percent losses each. MSCI's broadest gauge of world stocks fell to its lowest level since Sept 2013.

On Wall Street, the S&P 500 managed to stabilize on Monday after three straight days of one-percent-plus declines, ending the day up 0.1 percent.

"It is a good sign that U.S. shares bought back in late trading to end in positive territory ... Maybe they were helped by the view that the Fed may not be able to raise rates when markets were gripped by fear over China and falling oil prices," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.

Indeed, money market futures are starting to price out the chance of multiple Fed rate hikes this year, with only a roughly 50 percent chance of a second hike priced in. At the start of the year futures were fully pricing in two rate hikes.

The market is far from convinced that the Fed is going to raise rates in March, after implementing its first rate hike in almost a decade only last month.

Commodity prices remained under severe pressure, with oil prices hitting new 12-year lows on concerns about slow demand and oversupply - including U.S. shale oil production and a likely supply increase from Iran with sanctions lifted.

U.S. crude futures fell to a 12-year low of $30.88 per barrel on Monday, and last stood at $31.19, down almost 16 percent so far this year.

Brent futures fell to $31.17 per barrel, also a 12-year low.

Copper, seen as a good gauge of the strength of the global economy because of its wide industrial use, fell more than 2 percent on Monday to hit 6 1/2-year low of $4,381 a tonne.

Commodity-linked currencies stayed under pressure. The Australian dollar dipped 0.2 percent in early trade to $0.6980 after a small bounce on Monday, edging towards the four-month low of $0.6927 set earlier on Monday.

The Canadian dollar hit a 12 1/2-year low of C$1.4245 to the U.S. dollar on Monday and last stood at C$1.4225.

South Africa's rand was fragile at 16.81 rand to the dollar after a massive plunge on Monday that briefly took it to a record low of 17.995.

The dollar was firmer against other major currencies.

The euro traded at $1.0857, having slipped 0.6 percent on Monday.

The yen, which had been buoyed by safe-haven flows, also stepped back from a 4 1/2-month high touched on Monday at 117.70 yen to the dollar.

The pound was particularly weak due to waning expectations of a rate hike by the Bank of England as well as uncertainty over a referendum on whether or not Britain should stay in the European Union.

It stood at $1.4540, trading near 5 1/2-year low of $1.4491 hit on Monday.

source: www.abs-cbnnews.com