Tokyo and Seoul lead Asia rally after Wall Street gains

HONG KONG - Tokyo and Seoul led a rally in Asian shares Wednesday, on the back of strong earnings reports across the region including from tech giants Sony and Samsung.

The buying, after a muted start to the week in Asia, tracked overnight gains in the Nasdaq on Wall Street that saw it close at a fresh record.

Along with solid US economic data and growing expectations that a centrist continuity candidate will take over at the US Federal Reserve, the outlook for global growth remained broadly positive.

Asia has witnessed an impressive profit reporting season so far, with Sony the latest electronics blue-chip to announce it was expecting record annual profits.

Sony stocks surged 11.4 percent, with strong results attributed to its PlayStation games division and a booming smartphone parts business, as well as a hit with the newest Spider-Man movie.

Honda also revved up its annual profit outlook on motorcycle purchases, while a fall in Nissan passenger car sales after an inspection scandal appeared to have already been priced in by investors.

Tokyo finished at a fresh 21-year high, trading up 1.9 percent, as firms benefited from a weak yen -- making their products more competitive in foreign markets and inflating repatriated profits.

The announcement from Japan's central bank Tuesday that it would keep its ultra-loose monetary policy unchanged, even though overseas counterparts have started turning off the stimulus taps, also contributed.

Seoul shrugged off data showing October exports rising by less than expected, with shares up 1.3 percent, led by Samsung. The flagship tech firm logged a record profit of $10.0 billion for the third quarter.

Hong Kong closed up 1.2 percent, reversing two days of losses, with the latest evidence of the city's equity rally coming from internet giant Tencent's e-book arm. The country's answer to Amazon's Kindle Store, China Literature has reportedly raised US$1.1 billion for a Hong Kong listing next week.

Shanghai edged up 0.1 percent, as new numbers showed Chinese factory activity stabilized in October, going some way to dispel the gloom of Tuesday's official reading which suggested output growth had slowed.

Sydney also finished up, gaining 0.5 percent after a strong showing from miners and healthcare stocks.

At the start of trading in Europe, London and Paris both rose 0.4 percent, while Frankfurt jumped 0.9 percent after a public holiday Tuesday.

- US Federal Reserve meets -

Wall Street rose as data releases showed US consumer confidence hit a 17-year high in October, as congressional Republicans prepared to unveil President Donald Trump's long-anticipated tax cut plan.

The result of the ongoing US Federal Reserve meeting is due after Asian markets close Wednesday.

Investors will scrutinize the announcement for indications of a widely anticipated December rate rise.

Overshadowing the whole process is Trump's imminent decision on whether to replace Fed chief Janet Yellen, with the announcement likely to come Thursday before his departure on an 11-day Asia tour.

Centrist Jerome Powell is tipped as the front-runner, with investors pricing in his potential appointment over the more hawkish John Taylor.

Traders are also keeping a close eye on key payroll data out on Friday.

The New York attack by a truck driver that killed eight people, and Trump's vow to ensure more robust "extreme vetting" of travelers to the US, did not appear to have affected investor sentiment.

Oil prices rose to a two-year high as OPEC members honored pledges to curb supply and exports from northern Iraq fell.

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

Wall Street dips, Apple gain fails to offset rate worries

Wall Street ended lower on Monday as a bounce in Apple failed to offset concerns that the U.S. Federal Reserve could raise interest rates sooner than later.

The timing of future Fed rate hikes in the face of a sluggish economy is a major focus among stock investors who have benefited from historically low borrowing costs since the 2008 financial crisis.

The Dow Jones industrial average and the Nasdaq Composite traded higher for much of the session but they made a pronounced dip in the final few minutes.

San Francisco Fed President John Williams and his St. Louis counterpart, James Bullard, both struck hawkish tones in separate appearances on Monday.

Last week, investors were surprised at central bank minutes that opened the door to a rate hike as soon as June. Investors will listen for fresh clues to the Fed's intentions when Chair Janet Yellen speaks on Friday.

"The market needs to be coddled and gently eased into a slightly higher interest-rate environment, and that appears to be what the Fed is doing," said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.

"Rates need to normalize and the Fed needs to give itself room to lower again in the event of another financial crisis," Ghriskey said.

Apple rose 1.27 percent and the Philadelphia SE Semiconductors Index added 0.66 percent after Taiwan's Economic Daily News reported that Apple asked suppliers to build more of its next-generation iPhones than previously expected.

The Dow Jones industrial average declined 0.05 percent to end at 17,492.93 points and the S&P 500 lost 0.21 percent to 2,048.04.

The Nasdaq Composite dipped 0.08 percent to 4,765.78.

Just 5.9 billion shares changed hands on U.S. exchanges, well below the 7.2 billion daily average for the past 20 trading days, according to Thomson Reuters data.

Eight of the 10 major S&P sectors ended lower, led down by a 0.97 percent dip in utilities.

The materials index rose 1.19 percent. It was boosted by Monsanto's 4.41-percent jump after the U.S. seeds company received a $62 billion takeover offer from German drugs and crop chemicals group Bayer.

The largest drag on the S&P 500 was Microsoft, down 1.17 percent.

Saturday was the one-year anniversary of the S&P 500's last record high close and the index is now down some 4 percent from that peak.

Tightening borrowing costs would help choke inflation but also hamper economic expansion and reduce liquidity in stock markets, which could impede stock gains.

The S&P 500 is trading at about 16.4 times expected earnings, down from about 17 at the start of May, according to Thomson Reuters Datastream.

Tribune Publishing fell 15.04 percent after it rejected Gannett's latest takeover offer. Gannett was down 2.36 percent.

Advancing issues outnumbered decliners on the NYSE by 1,521 to 1,479. On the Nasdaq, 1,489 issues rose and 1,329 fell.

The S&P 500 index showed six new 52-week highs and no new lows, while the Nasdaq recorded 46 new highs and 27 new lows.

source: www.abs-cbnnews.com

Shares snap losing streak after Fed decision

Philippine shares opened higher on Thursday, snapping four straight days of losses after the US Federal Reserve kept policy rates steady.

The Philippine Stock Exchange Index (PSEI) was up 0.54 percent to 7,219.19 in early trade. Analysts however said shares would trade within a tight range as investors stay on the sidelines ahead of the May 9 elections.

“We may have some slight relief but I think the markets will tend to hold in this range-bound pattern until elections are over,” Smith Chua, vice president at Bank of the Philippine Islands’ Asset and Trust management Group told ANC’s “Market Edge with Cathy Yang.”

Bangko Sentral ng Pilipinas Governor Amando Tetangco signaled he would keep local policy rates unchanged ahead of a monetary board meeting next month.

“At the moment, we really don’t expect any major developments cropping up that would necessitate a shift in our stance of policy,” Tetangco said in a statement.

The Federal Reserve action was “broadly in line” with market expectations and “should help clear up global positioning in the near term,” Tetangco said, adding a Bank of Japan decision on Thursday was also being monitored.

Tetangco said he did not see “significant changes in economic policy thrusts” after the May 9 elections. Tough-talking Davao City Mayor Rodrigo has widened his lead over erstwhile frontunner, Sen. Grace Poe, in the most recent surveys.

source: www.abs-cbnnews.com

Expert reveals biggest concerns of world's top CEOs

Marios Maratheftis, the Global Chief Economist of Standard Chartered Bank, is the person sought by top-level CEOs for advice on big industrial leaps.

Nowadays, he says, three of the biggest concerns for them are the Fed’s interest rate hikes, the deceleration of the Chinese economy, and the big drop of oil prices.

The 25 basis points that the U.S. Federal Reserve has hiked may seem a small movement, but Maratheftis notes that after nine and a half years of cutting rates, the first hike in December 2015 indicates that there's more to come.

“It signals a change in the regime and in the world order. And it has been significant. We’ve seen a lot of currencies, especially in emerging markets, moving quite rapidly in anticipation of a hike,” he tells Cathy Yang on The Boss.

He also says the U.S. economy will probably slow down this year and could see a shallow, short-term recession in 2017.

He predicts, however, that after one more hike this month, the Fed’s next move will be a cut. While this decline is always a bad thing, the interest cuts mean more capital flow into emerging markets.

The second biggest economy in the world has also seen a slowdown the previous year. The Chinese economy, however, is slowing down by design, with their policy-makers opting to shift their economic model from manufacturing and construction to a more sustainable model of services and construction.

Maratheftis says it is inevitable that there will be a slowdown, but the market’s reaction to it is much ado about nothing.

“The Chinese have the tools to maintain growth of up to 7%. They can cut interest rates, they can cut their reserve requirement ratio if they want to, and they can use fiscal policy and spend more in their economy. They’ve implemented these measures already.”

Problems in the petroleum industry, Maratheftis maintains, is rooted on the huge drop in prices over very little surplus in oil. With only a million barrels in excess per day, the supply can deplete quickly.

Standard Chartered estimates the price of oil to rise from $30 per barrel to $60-$70 per barrel should this continue. He adds that “the question isn’t the demand, because people are still buying; but are there going to be enough sellers or suppliers to satisfy that demand? Our answer is no.”

Considering all of the aforementioned, his recommendation to the captains of industry for years 2016 and 2017 is to "retreat, regroup, rebound."

Although financial markets are in the retreat phase, the fundamentals indicate, according to Maratheftis, that the current situation is not as bad as the markets have expected.

source: www.abs-cbnnews.com

Fed keeps rates unchanged, wary eye on global markets

WASHINGTON - The U.S. Federal Reserve kept interest rates unchanged on Wednesday and said it was "closely monitoring" global economic and financial developments, signaling it had accounted for a stock market selloff but wasn't ready to abandon a plan to tighten monetary policy this year.

The decision by the central bank's rate-setting committee was widely expected after a month-long plunge in U.S. and world equities raised concerns an abrupt global slowdown could drag on U.S. growth.

Fed policymakers said the economy was still on track for moderate growth and a stronger labor market even with "gradual" rate increases, suggesting its concern about global events had diminished but not squashed chances of a rate hike in March.

"The committee is closely monitoring global economic and financial developments and is assessing their implications for the labor market and inflation," the Fed said in its policy statement following a two-day meeting.

Wall Street fell after the statement, with the Standard & Poor's 500 index closing down more than 1 percent. Prices for U.S. Treasuries were mixed, while the dollar extended losses against a basket of currencies.

In an indication the Fed was taking global risks seriously, a prior reference to the risks to the economic outlook being "balanced" was removed from its statement. Instead, it said it was weighing how the global economy and financial markets could affect the outlook.

"It is clear that several FOMC members have become more worried," said Harm Bandholz, an economist at Unicredit in New York, referring to the Fed's rate-setting Federal Open Market Committee.

Shrugging off economic weakness in China, Japan and Europe, the Fed last month raised its key overnight lending rate by a quarter point to a range of 0.25 percent to 0.50 percent and issued upbeat economic forecasts that suggested four additional hikes this year.

Wall Street's top banks, however, expect only three rate increases before the end of the year, according to a Reuters poll released after the Fed's statement on Wednesday. That was in line with expectations earlier in January.

Investors are betting on one quarter-point rate increase in 2016.

Prices for Fed funds futures on Wednesday showed traders had pushed back bets for the next rate hike to July from June and modestly trimmed bets on a March hike.

"The Fed has maintained its composure in the face of global pressures," said Joe Manimbo, an analyst at Western Union Business Solutions.

JOB GAINS

U.S. exports took a hit last year, largely due to the impact of a strong dollar, but consumer spending accelerated and overall employment surged by 292,000 jobs in December.

The Fed said on Wednesday that a range of recent labor market indicators, including "strong" job gains, pointed to some additional firming in the job market.

Oil prices have also plummeted this year, which could keep U.S. inflation below the Fed's 2 percent target for longer, but the central bank said it still expects the downward inflationary pressure from lower energy and import prices to prove temporary.

Policymakers will be able to sift through the January and February U.S. employment reports before their next policy meeting in March.

source: www.abs-cbnnews.com

PH, Indonesian shares lead regional gains after Fed rate hike

BANGKOK - Most Southeast Asian stock markets gained on Thursday after the U.S. Federal Reserve raised interest rates as expected, with the Philippine key stock index rising nearly two percent and the Indonesian benchmark hitting a near two-week high.

The Philippines' key index rose 1.9 percent while the Jakarta composite index gained 1.2 percent, both hovering at their highest levels since Dec. 7.

Share price weakness in Southeast Asia this year in the wake of fund outflows has mostly reflected the rate hike fears, according to brokers.

"Markets have predictably declined heading into the first Fed hike. This, however, presents an opportunity as we expect Fed-related risks to subside thereafter," said broker Nomura Securities in a report.

"A combination of easing China risks and some domestic catalysts makes for a good opportunity to increase our risk exposure in ASEAN," Nomura said.

Nomura upgraded Indonesia to "overweight", the same as the Philippines and Singapore. It remained "underweight" on Malaysia and Thailand.

The Thai SET index rose marginally while telecoms shares such as Total Access Communication came under selling pressure on concerns the high bidding prices of 4G spectrum licences would hurt earnings.

The Fed hiked interest rates for the first time in nearly a decade on Wednesday, signalling faith that the U.S. economy had largely overcome the wounds of the 2007-2009 financial crisis.

The gains in Southeast Asia were in line with a rally on Wall Street overnight and in early Asian stock markets as investors chose to take the historic hike in U.S. interest rates as a mark of confidence in the world's largest economy.

source: www.abs-cbnnews.com

US Fed raises interest rate for first time in nearly a decade

WASHINGTON, United States - The Federal Reserve announced Wednesday its first interest rate increase in more than nine years in a landmark move signaling the US has finally moved beyond the 2008 crisis.

The move, which has repercussions across the global financial system, also imprinted Janet Yellen's personal stamp on US monetary policy after nearly two years as Fed chair spent plotting to reverse course from the easy-money stance bequeathed by predecessor Ben Bernanke.

The Fed raised its benchmark federal funds rate, locked near zero since the financial crisis, by a quarter point to 0.25-0.50 percent, saying the world's biggest economy is growing solidly and should accelerate next year to a respectable 2.4 percent pace.

"This action marks the end of an extraordinary seven-year period during which the federal funds rate was held near zero to support the recovery of the economy from the worst financial crisis and recession since the Great Depression," Yellen said.

"It also recognizes the considerable progress that has been made toward restoring jobs, raising incomes, and easing the economic hardship of millions of Americans."

The move was widely expected and marked the end of an era in which the Fed pumped trillions of cheap dollars into the devastated US economy to fuel what turned out to be an unexpectedly long rebound.

It kicks off a likely series of rate increases which the Federal Open Market Committee, the Fed's policy board, promised would be "gradual" and follow the pace of the economy.

FOMC projections showed they expect the rate will rise to about 1.4 percent by the end of 2016, suggesting four more increases over the coming 12 months.

"The important question is how far, how fast," said economist Edwin Truman at the Peterson Institute for International Economics.

Markets react positively

The announcement, and the Fed's positive outlook for US growth, pushed Asian and US stocks higher, with the S&P 500 finishing with a 1.5 percent gain, most of which came after the Fed's announcement.

Stocks in Australia, Tokyo and Hong Kong were all up, and the dollar rose slightly against the euro.

The rate increase came amid some criticism from prominent economists that the economy was still vulnerable to slower global growth and that there was no compelling reason -- like surging inflation and a tight jobs market -- to justify it.

But FOMC support for the decision was unanimous. The committee pointed to "considerable" improvement in the labor market and said it is "reasonably confident" in inflation rising over the medium term, to its two percent objective.

"The first thing that Americans should realize is that the Fed's decision today reflects our confidence in the US economy," Yellen told a press conference.

"While things may be uneven across regions of the country, and different industrial sectors, we see an economy that is on a path of sustainable improvement."

Yellen predicted the challenges of ultra-low inflation and continued slack in the labor market would both diminish significantly over the coming year.

"What we would like to avoid is a situation where we have waited so long that we are forced to tighten policy abruptly, which risks aborting what I would like to see as a very long-running and sustainable expansion," she explained.

'Source of strength'

Analysts said the immediate policy change was only modest and were focused on how the Fed will move in the next year.

The prospect of more increases of the Fed's rate will have a broad impact on the global financial system.

It means a higher cost of borrowing for everyone from foreign governments and companies to home and car buyers, while also better rewarding savers on their bank accounts.

The Fed argues that US businesses can continue to invest and hire with a modestly tighter dollar policy.

As for foreign economies, especially emerging markets which have already seen capital outflows and falling currencies due to the expected shift by the Fed, Yellen says they had been forewarned and are in better shape than in the crises of the 1990s.

"This action takes place in the context of a US economy that is doing well, and is a source of strength to the emerging markets and other economies around the globe," she said.

Kathy Lien of BK Asset Management noted that "the most important monetary policy event of the year proved to be a dud for market volatility.

"This muted reaction to a historic change in monetary policy is exactly what the Federal Reserve likes to see and despite all of their critics, we see this as a credit to their proper management of market expectations."

source: www.abs-cbnnews.com

Datem shelves IPO seeking up to $75-M

MANILA - Home builder and construction company Datem Inc. said on Friday it is postponing an initial public offering (IPO) that could have raised up to $75 million as weak market conditions plague listing plans in Manila.

The broader stock market index has dropped 4.4 percent this month, as foreign investors pull out of emerging markets ahead of the expected U.S. Federal Reserve rate hike.

Datem only began marketing on Monday what would have been the country's fourth IPO this year, with an indicative price range of 8.75 to 10.75 pesos per share, well below initial guidance of a maximum price of 14.15 pesos.

It had planned to sell up to 329.05 million shares in total.

Earlier this month, unfavorable market conditions also prompted Philippine supermarket and department store chain Metro Retail Stores Group Inc. to price its IPO at a discount.

In a notice to the Philippine Stock Exchange, Datem said it will advise the corporate regulator when it has a revised timetable for the listing.

source: www.abs-cbnnews.com

US Fed keeps rates steady in October

The US Federal Reserve once again stood pat on raising interest rates on Wednesday, but signals the much-anticipated lift-off may happen in December.

Angel Pacis, first vice president and trust officer at East West Bank, talked with ANC to make more sense of the Fed's decision. -- ANC Market Edge, October 29, 2015

source: www.abs-cbnnews.com

Asian shares hit 3-week high ahead of crunch Fed meeting

TOKYO - Asian stocks hit a three-week high on Thursday after a jump in oil prices lifted Wall Street, with many investors taking last-minute positions ahead of a crucial U.S. Federal Reserve policy announcement.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.4 percent, hitting its highest level in three weeks while Japan's Nikkei average rose 1.4 percent.

Oil prices jumped on Wednesday, after the largest U.S. crude drawdown in seven months at the key U.S. delivery point eased worries about over supply, helping to boost battered energy stocks.

That in turn supported Wall Street shares, with S&P 500 index rising 0.9 percent to 1,995.31, its highest close in almost a month, having pared just about a half of its fall from July to late August.

U.S inflation data, unveiled a day before the Fed's long-awaited policy decision later in the day, showed consumer prices unexpectedly fell in August.

Precious metal prices jumped as some market players took low the inflation reading to mean a smaller chance of an immediate rate hike.

Gold prices XAU= rose to 1.3 percent on Wednesday to $1,119.50 per ounce. Silver XAG= jumped 3.9 percent to $14.96 per ounce, its highest level in more than three weeks.

The dollar also lost its edge in the currency market after the data, with the currency's index against a basket of six major currencies .DXY slipping to 95.323 from this week's high of 95.845.

"We believe that the Fed will refrain from raising rates today. But at the same time, it will indicate that it is highly likely to raise rates by the end of the year," said Tomoaki Shishido, fixed income analyst at Nomura Securities.

But there is little clarity on what the Federal Reserve will do on the whole.

U.S. money market futures hardly moved, still pricing in about one-in-four chance of a rate hike on Thursday.

On the other hand, the U.S. two-year note yield hit a 4 1/2-year high of 0.819 percent as investors expect the Fed will start its tightening cycle soon as the economy recovers, even if it does not do so this month.

The rise in Treasuries yields, also likely reflected selling by China, which needs to cash out dollars for its intervention to support the yuan, market players said.

The data published late on Wednesday showed China's holding of U.S. Treasuries dropped to $1.241 trillion in July from $1.271 in June.

source: www.abs-cbnnews.com

Asian shares tread water as Fed meeting looms

TOKYO - Asian shares and the dollar inched higher on Tuesday but caution reigned after Wall Street skidded as investors awaited this week's U.S. Federal Reserve policy decision.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.1 percent, after Wall Street logged losses, with U.S. trading volume at its lowest in a month as markets awaited the Fed outcome.

Japan's Nikkei stock index .N225 rose 0.6 percent as investors awaited the outcome of the Bank of Japan's two-day policy meeting later this session, as well as BOJ Governor Haruhiko Kuroda's post-meeting speech.

A few investors were betting that Japan's central bank would muster additional easing measures. But the majority believe that the BOJ will simply warn of heightening global risks while holding off on actual stimulus, holding its fire in case the Fed's long-awaited rate hike, whenever it comes, triggers a fresh wave of market turmoil.

"It seems logical that they would want to see the wash up from this week's Federal Reserve meeting and hold the ability to be reactionary," Chris Weston, chief market strategist at IG, said in a note.

"If we see anything from Mr. Kuroda and the BOJ today, it will be setting the scene for additional measures if they so need," he said.

The Japanese yen edged down slightly ahead of the BOJ outcome, with the dollar trading at 120.35 yen JPY=, up about 0.1 percent from late U.S. trade.

The euro inched down about 0.1 percent to $1.1308 EUR=, while the dollar index, which tracks the greenback against a basket of six major rivals, added about 0.1 percent to 95.302, moving away from a three-week low of 94.913 touched overnight.

The conclusion of the Fed's two-day meeting on Thursday remained the market's key focus, with many economists now believing that volatile global markets and increasing evidence of slowing momentum in China will prevent the U.S. central bank from raising interest rates for the first time since 2006.

A Reuters poll of 72 economists last week showed a slight majority expect an interest rate rise from the current 0-0.25 percent, but a smaller sample saw just a 50-50 chance.

In commodities, crude oil futures clawed back some ground lost in the previous session.

U.S. crude rose about 0.8 percent to $44.33 a barrel, underpinned by data showing a drop in U.S. supplies. It shed 1.4 percent on Monday.

Brent crude added about 0.7 percent to $46.69, after skidding 3.7 percent to its lowest settlement in two weeks.

Spot gold edged up slightly to $1,108.86 an ounce, moving away from last week's one-month low.

source: www.abs-cbnnews.com

Stocks shrug off China data, Fed weighs on markets

LONDON - Stocks rose on Monday, shrugging off tepid Chinese economic data while the dollar weakened before a US Federal Reserve decision on whether to raise interest rates for the first time since 2006 later this week.

Oil prices fell again on falling demand which analysts said could take a further hit if interest rates rise in the world's biggest economy.

The combination of worries about slowing growth in China and higher U.S. borrowing costs have weighed on markets for weeks, becoming more acute as this week's Fed meeting has approached.

A Reuters poll on Friday showed a small majority of forecasters still expect a Fed hike on Thursday, though markets-based models suggest policy tightening will be delayed.

Growth in Chinese investment and factory output in August lagged forecasts and, after weak trade and inflation data last week, made it more likely that third-quarter economic growth may dip below 7 percent for the first time since the financial crisis. Only retail sales beat forecasts.

Shares fell in China and Japan, though MSCI's main index of Asia-Pacific stocks, excluding Japan .MIAPJ0000PUS, rose 0.5 percent and European shares followed them higher.

The pan-European FTSEurofirst 300 index .FTEU3 rose almost 1 percent with Britain's FTSE 100 index .FTSE up 1.2 percent.

China's Shanghai Composite index .SSEC dropped 2.8 percent and the CSI 300 .CSI300 index of the biggest listed companies in Shanghai and Shenzhen lost 2 percent. Tokyo's Nikkei .N225 closed down 1.6 percent.

The dollar dipped against the yen JPY=, falling 0.3 percent to 120.24 yen but and was steady against the euro EUR= at $1.1341.

"If there is an uncertain world, if China is slowing aggressively, then you have a situation where the Fed may well reconsider raising interest rates," said Bank of New York Mellon FX strategist Neil Mellor in London.

"What we're seeing is a general back-off from the view that the Fed is raising rates."

In emerging markets, Turkey's lira TRYTOM=D3 fell to a record low of 3.064 to the dollar

Oil prices fell nearly 1 percent on the prospect of dwindling demand, though reduced U.S. drilling, as measured by a rig count, offered some support.

Brent crude LCOc1, the global benchmark, was down 44 cents at $47.70 a barrel.

"Both the supply and demand pictures look less favorable over the coming months ... Outside the U.S., oil fundamentals appear to be slipping seasonally," Morgan Stanley said on Monday.

Broadly stronger stocks weighed on core government debt. German 10-year Bunds DE10YT=TWEB, the euro zone benchmark, rose 1 basis point to 0.66 percent while U.S. 10-year Treasuries US10YT=RR yielded 2.19 percent, up from 2.18 percent at Friday's New York close.

Copper turned lower in London on worries over China and the Fed. Three-month copper on the London Metal Exchange CMCU3 slipped by 1 percent to $5,316.50 a tonne.

Gold XAU= held steady at around $1,107 an ounce.

source: www.abs-cbnnews.com

Asian shares tumble as global stocks rout deepens

HONG KONG, China - Asian shares slumped on Friday, plunging deeper into the red after weak manufacturing data from China fuelled panic among investors over the clouding outlook for the world economy.

The dollar notched more losses against the euro and yen after minutes from the US Federal Reserve dampened hopes for a rate rise next month, while Asia-Pacific currencies were hit by concerns about regional growth.

Shanghai shares closed down 4.27 percent, or 156.55 points, at 3,507.74, ending their worst week since 2011 as worries over the flagging economy and the possibility of weaker government support weighed.

China's benchmark index closed at almost exactly the same level as the bottom of a recent market rout on July 8, before Beijing stepped in with a vast rescue package for equities.

Hong Kong fell 1.53 percent, or 347.85 points, to finish the day at 22,409.62 -- its lowest point since May 2014 -- taking it into a bear market after a more than 20 percent slump from its April peak.

Tokyo shares fell 2.98 percent, or 597.69 points, to finish at 19,435.83, a more than three-month low and down 5.28 percent on the week.

Seoul fell 2.01 percent, or 38.48 points, to 1,876.07 as tensions climbed with North Korea, and Sydney dropped 1.40 percent, or 73.98 points, to close at 5,214.60.

"It seems like we're seeing the makings of the 1997 Asian financial crisis all over, with emerging-market currencies plunging," Nicholas Teo, a strategist at CMC Markets in Singapore, told Bloomberg News.

"China's knock-on effect on the rest of the world is huge and China's deepening economic slowdown will have an impact for the next couple of months or so."

Asia got a negative lead from Wall Street after US shares sank more than 2.0 percent Thursday, with the Dow dropping to its lowest level for 2015.

Gold gained as investors looked for safer bets, rising to $1,150.67 in Asia compared to $1,138.80 late Thursday.

Sea of red

Market sentiment has nosedived since China's central bank devalued its currency last week in a surprise move widely seen as aimed at boosting the country's flagging exports.

Stoking concerns, the preliminary reading of Caixin's Purchasing Managers' Index (PMI) came in at 47.1 this month, its worst reading since March 2009 and significantly below analysts' forecasts.

"Global markets are in panic mode as the full scale of China's slowdown becomes clearer and the market pricing for a Fed September rate hike is unwound," said Angus Nicholson at IG Markets.

"China's currency devaluation, further stock market declines, and now another weak PMI appear to have put it front-and-centre in investors' minds."

Commodity shares continued their slide as concerns about a slowdown in China, the world's top importer of industrial metals and energy, continued to weigh.

A slump in raw materials prices has wiped off some $2 trillion from commodity stocks since the middle of last year.

US benchmark West Texas Intermediate (WTI) for October delivery, a new contract, lost 27 cents to $40.78 a barrel in afternoon trade, while Brent crude for October tumbled 32 cents to $46.30 a barrel.

The WTI September contract closed 32 cents higher at $41.14 in New York on Thursday, marginally higher than recent six-and-a-half year lows.

Analysts said oil held above the key $40 a barrel level thanks to a weaker greenback, which makes it cheaper for international investors to buy dollar-denominated oil.

Investors will be watching the weekly US oil rig count, due out on Friday, to see if a slump in crude prices has started to dampen production in the world's top economy.

In currency markets, the dollar stood at 122.97 yen, down from 123.38 yen in New York on Thursday.

The euro rose to $1.1255 and 138.39 yen, compared with $1.1241 and 138.69 yen in New York.

In other markets:
-- Wellington rose 0.13 percent, or 7.71 points, to 5,751.19.

Telecoms giant Spark New Zealand gained 9.42 percent to NZ$3.02 after they increased shareholder dividends. Fletcher Building was down 1.57 percent at $7.53

-- Taipei fell 3.02 percent, or 242.89 points, to 7,786.92.

Taiwan Semiconductor Manufacturing Co shed 3.97 percent to Tw$121.0 while Fubon Financial Holding lost 3.02 percent to Tw$49.85.

Financial markets in Manila are closed for a public holiday.

-- Bloomberg News contributed to this article --

source: www.abs-cbnnews.com

Index claws back to 7,500-level on bargain hunting

MANILA, Philippines - The benchmark stock index bucked global adversity yesterday as it managed to eke out gains amid the slump in US and Asian markets.

The 30-company Philippine Stock Exchange index (PSEi) returned to the 7,500 level, advancing 0.66 percent or 49.32 points to close at 7,505.48.

The broader All Shares index likewise joined the uptick, adding 0.42 percent or 18 points to 4,312.27.

“PSEi closed up higher despite the weaker performance of the US markets mostly on bargain hunting,” said Luis Limlingan, managing director at Regina Capital Development Corp.

“Investors were speculating lower before the Federal Reserve meets and euro area finance ministers discuss Greece’s debt crisis,” Limlingan added.

The local stock market went against the downtrend in most Asian bourses including Japan’s Nikkei, China’s Shanghai Composite Index and South Korea’s Kospi.

In the US, Wall Street indexes were in the red on Monday ahead of a US Federal Reserve meeting on June 16 and 17.

All local counters, meanwhile, ended in the green led by services firms which picked up 1.16 percent.

Market breadth stayed negative as decliners continued to edge out advancers, 85 to 77, while 55 stocks were unchanged.

Turnover value was flat from the previous day at P7.43 billion.

Read more on Philippine Star

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IMF cuts US growth outlook, urges Fed to delay rate hike

WASHINGTON - The International Monetary Fund on Thursday cut its 2015 growth forecast for the United States and called on the Federal Reserve to put off a rate hike until conditions are stronger.

In an annual report of the world's largest economy, the Fund said growth would reach only 2.5 percent this year due to the unexpected first quarter contraction, compared to the previous forecast of 3.1 percent in April.

It said growth is already rebounding from the stall. But it nevertheless strongly recommended that the Fed hold off on its planned interest rate hike until more resilience is shown, likely only in early 2016.

It said growth momentum this year had been sapped by "a series of negative shocks", pointing to extremely harsh winter weather in parts of the country, the three-month West Coast ports slowdown that locked up trade, the sharp rise of the dollar and the downturn in the oil industry.

Still, the IMF said, "These developments represent a temporary drag but not a long-lasting brake on growth."

"A solid labor market, accommodative financial conditions, and cheaper oil should support a more dynamic path for the remainder of the year."

IMF chief Christine Lagarde said at a press conference on the report that the Fund sees US growth resuming a 3.0 percent pace over the rest of the year, and achieving that for the whole of 2016.

"We still believe that the underpinnings for continued expansion are in place."

But she pushed for the Fed to hold off on a rate hike, which has been anticipated for as early as July, saying growth conditions are not yet firm enough for it.

The Fed has locked its benchmark federal funds rate at zero since 2008, and has been waiting for proof from a tightening jobs market and rising inflation that the economy is locked into higher gear to make its first increase toward a more "normal" monetary policy.

Without those signs, the IMF report warned, raising rates too soon could result in tighter financial conditions and even financial instability, that could then force the Fed to cut rates again.

That could both stir damaging volatility in world markets, and undermine the Fed's credibility.

The Fed "should remain data-dependent and defer its first increase in policy rates until there are greater signs of wage or price inflation than are currently evident," it said.

"Barring upside surprises to growth and inflation, this would put lift-off into the first half of 2016."

Dollar overvalued

While the IMF picture for the US economy was generally positive, it noted a few weaknesses or danger points that raise risks that would have impacts far beyond US borders.

The US dollar is "moderately overvalued", the IMF said, impacting economic growth and job creation, and holding down inflation.

"There is a risk that a further marked appreciation of the dollar -- particularly one that takes place in an environment where policies to address growth deficiencies languish both in the US and abroad -- would be harmful."

The IMF review also included a new analysis of financial system stability which warned that the US needs to put more effort into monitoring and regulating non-bank financial institutions.

Investors' search for yield in the current easy-money environment has increased the position in financial markets of lightly-regulated non-banks like insurance companies, investment funds and others, which are leveraging more and taking more risks, it noted.

This is pushing up asset valuations to what could be excessive levels, the IMF suggests, and yet for non-banks, "there is less visibility on the size and nature of the embedded risks and fewer regulatory and supervisory levers to manage those risks."

source: www.abs-cbnnews.com

US job growth brakes sharply, clouds Fed rate hike timing

WASHINGTON - U.S. employers added the fewest number of jobs in more than a year in March, the latest sign of weakness in the economy and one likely to further delay an anticipated interest rate increase by the Federal Reserve.

Nonfarm payrolls rose 126,000 last month, less than half February's pace and the smallest gain since December 2013, the Labor Department said on Friday.

The weakness was concentrated in the goods-producing sector, which has been hurt by a strong dollar and lower crude oil prices. Leisure and hospitality also saw a sharp slowdown in jobs growth, suggesting harsh winter weather could have dragged on hiring.

While the jobless rate held at a more than 6-1/2-year low of 5.5 percent, the workforce shrank. The labor force participation rate returned to a more than 36-year low reached late last year.

"The report confirms the emerging narrative of slowing growth momentum seen in the other economic indicators. It will weaken the argument for a mid-year (rate) hike," said Millan Mulraine, deputy chief economist at TD Securities in New York.

The tepid increase in payrolls ended 12 straight months of job gains above 200,000 - the longest streak since 1994. In addition, data for January and February were revised to show 69,000 fewer jobs created than previously reported, giving the report an even weaker tone.

After its robust stretch, the jobs figures now appear more in line with other signals from consumer spending to housing starts and manufacturing that have suggested the economy grew at a sub-1 percent annual rate in the first quarter. Economists had forecast that payrolls would rise 245,000 last month.

Prices for U.S. government debt rallied as investors pushed back their expectations for a Fed rate hike, while U.S. stock index futures fell about 1 percent. The dollar dropped against a basket of currencies.

The U.S. central bank has kept overnight interest rates near zero since December 2008, but a number of officials have said an increase will likely be considered at its June policy-setting meeting. While economic growth is expected to rebound, it appears increasingly unlikely the Fed will have sufficient signs of strength in hand by then.

"Now the timing for the lift-off could be delayed to September or even to December. The June date is not off the table, however, assuming the economy and employment rebound," said Sung Won Sohn, an economics professor at California State University Channel Islands in Camarillo.

DOLLAR AND OIL HURT

The buoyant dollar and lower oil prices have combined to crimp the profits of some large companies, forcing a reduction in capital spending.

Equipment maker Caterpillar Inc has warned that lower oil prices will hurt its business in 2015, and Procter & Gamble, the world's largest household products maker, has cautioned that the dollar would hit its profits.

The dollar has gained about 13 percent against the currencies of the main U.S. trading partners since last June. Economists say the impact is equivalent to a half-point interest rate hike.

At the same time, the sharp oil price drop has curtailed U.S. drilling activity. Payrolls in the mining sector fell 11,000, reflecting ongoing weakness in oil and gas extraction. Energy producers have idled half of their rigs since October.

A harsh winter and a now-settled labor dispute at normally busy West Coast ports have also weighed on activity, as has softer global demand. Bad weather is estimated to have lopped off as much a seven-tenths of a percentage point from first-quarter growth.

Construction employment fell 1,000 last month, while manufacturing payrolls slipped by 1,000.

There was, however, some good news in the report.

Average hourly earnings increased 0.3 percent. Even so, that only lifted the year-on-year gain to 2.1 percent, in the same tepid range that earnings growth has held to for several years.

With Wal-Mart and McDonald's recently announcing pay increases for their hourly workers, wage growth could gain traction in the months ahead. Other companies, including TJX Cos Inc and health insurer Aetna, also have announced pay hikes.

Although the labor force participation rate, or the share of working-age Americans who are employed or at least looking for a job, slipped one-tenth of a percentage point to 62.7 percent in March, other measures on the Fed's so-called dashboard continued to improve.

A broad measure of joblessness that includes people who want to work but have given up searching and those working part-time because they cannot find full-time employment fell to a more than 6-1/2-year low of 10.9 percent from 11 percent in February.

The number of Americans unemployed for 27 weeks or longer also declined to its lowest point since November 2008.

In a sign that cold weather could have undercut job growth, the average work week fell to 34.5 hours, the lowest since September, from 34.6 in February. About 182,000 people said they could not get work because of inclement weather, slightly above the historical average of 141,000.

"It is possible that the colder-than-normal weather slowed hiring activity," said Lewis Alexander, chief economist at Nomura Securities International in New York.

source: www.abs-cbnnews.com

PH, Asian markets up after Fed's dovish comments, inflows

MANILA, Philippines - Major Southeast Asian stock markets rose on Thursday as risk appetite returned to laggard emerging stock markets following the U.S. Federal Reserve's dovish comments on interest rates and economic recovery.

The Philippine Stock Exchange index climbed back above the 7,800 level to close 0.75 higher at 7,814.55.

Among the big gainers were Bloomberry Resorts Corp, JG Summit Holdings Investments, Metro Pacific Investments, Alliance Global Group and PLDT.

Singapore's Straits Times Index gained 0.7 percent to 3,386.16, rebounding from a near two-month closing low on Wednesday, while Jakarta's composite index climbed 0.8 percent after Wednesday's slide to a near one-month low.

Morgan Stanley expected a counter trend rally in emerging equities and a pause in the Japan bull run near term, as Wednesday's FOMC was clearly more dovish than the consensus expected and the US dollar was correcting, its report said.

In Asia ex Japan, it expected Singapore, among yield-sensitive markets, to rally.

Malaysia recorded a net foreign inflows of 241 million ringgit ($65.2 million), Indonesia's net foreign inflows reached 490 billion rupiah, while Thailand saw 791 million baht ($24.2 million) and the Philippines 475 million peso ($10.6 million), stock exchange data showed.

World shares rose back towards all-time highs and a slump then jump in the dollar triggered wild moves in currency markets on Thursday, as investors priced in a later start and a slower pace for future U.S. rate rises.

The Federal Reserve indicated it preferred a more gradual path to normalising U.S. interest rates. It also downgraded its economic growth and inflation projections, signalling it is in no rush to push borrowing costs to more normal levels. - With ANC

source: www.abs-cbnnews.com

Philippine index eases ahead of rate decision

BANGKOK - Southeast Asian stock markets were range-bound on Wednesday as stocks in the Philippines extended losses a day before its central bank meets on policy interest rates, while weak earnings by large-caps weighed on regional sentiment.

The Philippine main index was down 0.5 percent to 7,686.43 amid selling in recent gainers such as Petron Corp and Universal Robina Corp.

The Philippine central bank is expected to leave interest rates on hold on Thursday and keep policy largely unchanged until after the U.S. Federal Reserve increases rates there.

Singapore's key index rose 0.2 percent, with large-cap shares mixed. Global Logistic Properties was the top gainer, while Oversea-Chinese Banking Corp fell after its quarterly earnings came in below forecasts.

The Thai SET index was down 0.2 percent. Total Access Communication Pcl dropped 2 percent after the mobile operator missed expectations for its fourth-quarter earnings.

Brokers in Bangkok cited concerns about Greece.

Asian stock markets turned cautious on Wednesday, while the U.S. dollar crept higher as looming euro zone meetings to discuss the Greek debt crisis threatened to produce more confusion than clarity.

"Overall, further stock market consolidation is likely, awaiting more information on Greece's debt issue," strategists at KGI Securities wrote in a report.

Malaysia headed for a third straight day of falls ahead of fourth-quarter growth data.

Sluggish global demand for its exports and weak commodity prices are expected to have dragged Malaysia's economic growth in the fourth quarter of 2014 to its weakest pace in more than a year.

The Jakarta composite index rose slightly, recovering from Tuesday's loss.

Vietnam's benchmark VN Index climbed 1 percent, with most blue-chips advancing.

source: www.abs-cbnnews.com

Philippine shares off all time highs

BANGKOK - The Philippine index retreated on Thursday as investors sold in an overbought market after a rally driven by upbeat economic data, while most others stock markets in the region pulled lower with Asia spooked by the U.S. Federal Reserve's signal of a possible rate hike.

Asian shares extended losses on Thursday after the Fed took an upbeat view on the U.S. economy and signalled that it remains firmly on track to raise interest rates this year despite an uncertain global outlook.

The Philippine composite index edged down 0.17 percent.

It earlier hit an intraday all-time high of 7,736.97 which briefly sent the index's 14-day Relative Strength Index (RSI) above 70, an overbought level.

The Philippine economy grew an annual 6.9 percent in the fourth quarter, boosted by strength in the industrial sector, rounding out 2014 as the fastest-growing economy in Asia.

Malaysia's index eased 0.7 percent to 1,782.51, heading for a second straight day of loss. Energy stocks were among those actively traded amid low oil prices, with Sapurakencana Petroleum down 0.7 percent and Tenaga Nasional off 1.5 percent.

Maybank IB Research said in a report it maintained an end-year 2015 target for the index at 1,830 and that its strategy on the market was still defensive. Its recent roadshow reflected bearish sentiment among institutional investors.

"Our take is that most of the funds we met have reasonably reduced their exposure to Malaysian equities since the roil on crude oil price began ... This is to be expected since investors generally do not like uncertainties," the report said.

Bucking the trend, Singapore shares eked out slim gains as investors still digested the Singapore central bank's unexpected easing of its monetary policy on Wednesday to slow the appreciation of the Singapore dollar.

"Particularly for foreign investors, this is a double whammy coming after the fall in equity and asset prices, and may lead to a reassessment of portfolios," said broker NRA Capital in a report.

Large caps were mixed, with shares of DBS Group Holdings down 0.2 percent and Keppel Corp up 1.3 percent.

source: www.abs-cbnnews.com