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Asian Markets at Close Report

European Markets at Close Report

May 25, 2017

Asia, Europe and U.S. Stocks Markets' Closing Reports on May 25, 2017

ASIA
cnbc.com

Cheang Ming


Asian markets closed higher on Thursday after U.S. Federal Reserve May meeting minutes indicated an unwinding of its balance sheet likely towards year-end and as investors look ahead to an OPEC gathering widely expected to extend output cuts.
An investor looks at an electronic board showing stock information at a brokerage house in Shanghai on March 16, 2017.
Johannes Eisele | AFP | Getty Images
An investor looks at an electronic board showing stock information at a brokerage house in Shanghai on March 16, 2017.
Minutes released yesterday indicated that the Fed could use a system where cap limits are implemented on how much the Fed would roll off every month without reinvesting. The central bank's balance sheet is currently worth $4.5 trillion.
While the Fed signaled that interest rates could be raised soon, Federal Open Market Committee (FOMC) members also indicated in the minutes that "it would be prudent" to wait for more evidence that reflected the softer economic data out of the U.S. was transitory.
National Australia Bank Economist Tapas Strickland said in a Thursday morning note that the trajectory for interest rates after the likely June hike were "slightly more uncertain" due to inflation outlook from the Fed.
The dollar fell while stocks rose following the release of the minutes. The dollar index, which measures the dollar against a basket of rival currencies, traded as low as 97.093 after the news.
"A modest post-release fall in the dollar suggests messaging from the Fed was slightly less hawkish than some feared," CMC Markets Chief Market Strategist Michael McCarthy said.
The dollar index sank to 96.995 at 2:45 p.m HK/SIN.
 
NIKKEI NIKKEI 19813.13
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UNCH 0%
HSI HSI 25630.78
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UNCH 0%
ASX 200 S&P/ASX 200 5789.63
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UNCH 0%
SHANGHAI Shanghai 3107.83
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UNCH 0%
KOSPI KOSPI Index 2342.93
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UNCH 0%
CNBC 100 CNBC 100 ASIA IDX 7590.64 0.86 0.01%
The Nikkei 225 gained 0.36 percent or 70.15 points to close at 19,813.13 while South Korea's benchmark Kospi index surged 1.1 percent or 25.59 percent to end the session at 2.342.93.
Down Under, the ASX 200 closed in the green, edging higher by 0.36 percent or 20.625 points to finish at 5,78936.
Markets in greater China were were higher a day after Moody's downgraded the credit rating of the world's second largest economy. Hong Kong's Hang Seng Index was up 0.6 percent while the mainland Chinese markets reversed earlier losses to close higher. The Shanghai Composite jumped 1.43 percent or 43.7971 points to close at 3,107.873 while the Shenzhen Composite ended trade higher by 0.725 percent or 13.0341 points at 1,811.9033.
Indonesian markets were closed for a holiday.
Markets are also likely to be watching the highly-anticipated OPEC meeting in Vienna. Major oil producers are expected to extend output cuts in a bid to rebalance bloated oil markets.
While U.S. West Texas International (WTI) crude will likely gain if output cuts are extended, FXTM Research Analyst Lukman Otunuga said oil prices remained caught between optimism over the OPEC-led deal and U.S. shale limiting gains.
"I believe that U.S. shale is a significant threat to the OPEC deal, especially when considering how the surging output from the U.S. has seized market share from other OPEC members ... While it may be too early to say that this is the end of OPEC, U.S. shale has considerably weakened the cartel's grip on the global markets," Otunuga said in a note.
Oil prices were higher ahead of the upcoming meeting. U.S. crude added 0.74 percent to trade at $51.74 a barrel while Brent crude rose by 0.82 percent to $54.40.
Hong Kong's rating was downgraded by Moody's yesterday. This followed the rating agency's downgrade of China's credit rating for the first time since 1989. Moody's said the Hong Kong downgrade was due to the impact of China credit trends on Hong Kong.
In South Korea, SK Hynix said the company's chip foundry business would be spun into a separate company. A company spokeswoman told CNBC that the company had made the decision to "elevate the long-term competitiveness of the foundry business."
After Samsung, SK Hynix is the world's second largest chip maker. Shares of the company closed flat at 55,800 won a stock.
Over in China, brokerages Citic Securities, Haitong Securities and Guosen Securities were fined by regulators for violating financing rules. Shares of the brokerages, however, shrugged off the fines to trade higher in Hong Kong and the mainland.
Mainland-listed shares of the brokerages reversed earlier losses to close higher. Citic Securities surged 3.99 percent , Haitong rose 2.44 percent and Guosen jumped 3.8 percent. Citic and Haitong shares traded in Hong Kong also gained, surging 2.92 percent and 4.4 percent respectively at 3:05 p.m. HK/SIN.
In other currency news, the yuan hit an almost two-month high against the dollar earlier in the session. Dollar/yuan in the onshore market jumped to trade at 6.8690, but softened to trade at 6.8735 at 2:45 p.m. HK/SIN.
Reuters reported that this was due to the sale of dollars by state-owned banks in the onshore market. Onshore yuan closed the last session at 6.8895.
Meanwhile, the euro strengthened against the dollar to trade at $1.1229. The euro hit a six-and-a-half month high earlier this week due to reduced political risk and positive economic data in the euro zone.
The Australian dollar, which fell on the back of the China ratings downgrade, recovered off its lows in the last session to trade at $0.7492. The Aussie dollar is sensitive to moves in commodity prices, such as the fall in iron ore prices seen in the last session.
"One could say that when China is importing lots of raw materials, the Australian dollar tends to move higher. Sometimes a lot higher. When China catches a cold and imports less raw materials, the Australian dollar catches tuberculosis," OANDA Senior Market Analyst Jeffrey Halley said in a note.
Stateside, Wall Street gained on the back of news out of the Fed, with the S&P 500 notching a record close and gaining 0.25 percent or 5.97 percent to finish at 2,404.39.

EUROPE
cnbc.com

Europe ends under pressure as oil prices tumble on OPEC; Petrofac tanks 30%

Karen Gilchrist, Alexandra Gibbs


European markets struggled to end on a positive note Thursday as a sharp fall in oil prices weighed on sentiment, following news that OPEC would be extending its production cuts.
The pan-European Stoxx 600 failed to hold onto gains, closing 0.06 percent down in what had been a choppy trading session. Sectors finished mixed to lower, however, households goods and financial services closed with solid gains.
The U.K.'s FTSE 100 finished roughly flat, up 0.04 percent, while the French CAC and German DAX fell, closing down 0.08 percent and 0.17 percent respectively. Peripheral indexes closed mixed.
Despite posting solid gains in early trade, oil came under sharp pressure after an OPEC delegate told reporters in Vienna that oil production would be cut for an additional nine months in a bid to stem a supply glut and boost struggling oil prices. At the European close, Reuters reported citing OPEC delegates, that non-OPEC producers had also agreed to join OPEC in extending production cuts.
The news dampened sentiment, as some investors' had hoped that the group might reduce output even more. Shortly after Europe's market close, oil prices hit fresh session lows, with Brent crude oil slumping to $52.98 at 4.30 p.m. BST before extending losses, while U.S. WTI hit $50.28 before going below $50 after the close.
Oil and gas stocks sank 1.19 percent by the close, with Amec Foster and Tullow Oil falling more than 3.5 percent each. Meanwhile, U.K. producer Petrofac finished off its lows but tanked 29.95 percent. This was primarily due however to an investigation by the U.K.'s fraud regulator into allegations of corruption and bribery. Its Chief Operating Officer Marwan Chedid has been suspended.
Sticking with Europe's biggest movers and shakers, Daily Mail and General Trust shares tumbled 6.84 percent after the media firm reported an 11 percent drop in adjusted operating profit for 2017's first half.
Meanwhile, Intermediate Capital Group shot up 14 percent, after delivering a strong set of earnings results. Brick manufacturer Wienerberger also ended near the top of the STOXX 600, jumping over 6 percent.
Elsewhere, British food ingredients produced Tate & Lyle reported a 17 percent increase in sales for the year to March, having benefited from a weaker sterling following the U.K.'s Brexit vote. However, the stock finished down more than 5 percent.

Total Votes:
Not a Scientific Survey. Results may not total 100% due to rounding.

U.S.
cnbc.com

S&P and Nasdaq close at record highs as big tech stocks rise

Fred Imbert


U.S. stocks closed higher on Thursday as tech stocks climbed while Wall Street remained positive about the Federal Reserve's plan to trim its balance sheet.
The S&P 500 posted a record close and notched a new all-time intraday high. Information technology was among the best-performing sectors, rising 0.8 percent. Tech has been on a tear this year, surging more than 19 percent.
The Nasdaq composite also recorded all-time highs on an intraday and closing basis as Netflix, Alphabet, and Facebook shares all rose. Amazon also climbed, nearing the $1,000 per-share mark.
The Dow Jones industrial average, meanwhile, ended Thursday's session within half a percent away from its record high, rising 70 points, with UnitedHealth and 3M contributing the most gains.
Traders work on the floor of the New York Stock Exchange.
Getty Images
Traders work on the floor of the New York Stock Exchange.
According to the minutes from its May 3 meeting, which were released Wednesday, the Fed sees a system where it will announce cap limits on how much it will allow to roll off each month without reinvesting.
"The markets are taking the Fed's comments on how they plan to unwind the balance sheet as a positive," said Robert Pavlik, chief market strategist at Boston Private Wealth.
Pavlik also noted that the S&P closed decisively above 2,400 on Wednesday, a key technical level, that could prompt more investors to jump into the market.
Katie Stockton, chief technical strategist at BTIG, said: "Short-term upside is likely greatest for small- and mid-cap stocks given their relatively oversold position."
Equities came into Thursday's session riding a five-day winning streak, wiping out losses from last week's sell-off as investors shrug off negative news from Washington.
"Investors have been focusing on strong earnings and improving fundamentals rather than political noise," said Brent Schutte, chief investment strategist for Northwestern Mutual Wealth Management. "Now people are wondering what to worry about next.
Wall Street also kept an eye on oil prices after OPEC agreed to extend production cuts by nine months. That disappointed some investors, who had hoped that OPEC might reduce output even further to drain a global glut that has depressed markets for almost three years.
U.S. crude for July delivery fell on the back of the news, falling nearly 5 percent to settle at $48.90 per barrel.
"I think it was a buy-the-rumor-sell-the-news event," said Tamar Essner, energy analyst at Nasdaq. "There was also some hope that the cuts would deepen a bit."
In economic news, jobless claims hit 234,000 last week, rising slightly from the previous week, but remained near their lowest levels in more than 40 years.
U.S. Treasurys rose on Thursday, with the benchmark 10-year yield slipping to 2.253 percent and the short-term two-year note yield declining to 1.293 percent.
 
DJIA Dow Industrials 21082.95 70.53 0.34%
S&P 500 S&P 500 Index 2415.07 10.68 0.44%
NASDAQ NASDAQ Composite 6205.26 42.23 0.69%

The Dow Jones industrial average rose 70.53 points, or 0.34 percent, to close at 21,082.95, with UnitedHealth leading advancers and DuPont lagging.
The S&P 500 gained 10.68 points, or 0.44 percent, to end at 2,415.07, with consumer discretionary leading nine sectors higher and energy and materials as the only decliners.
The Nasdaq advanced 42.23 points, or 0.69 percent, to close at 6,205.26.
Advancers were a step ahead of decliners at the New York Stock Exchange, with an exchange volume of 814.14 million and a composite volume of 3.518 billion.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 10.
—CNBC's Jeff Cox and Tom DiChristopher contributed to this report.
On tap this week:
Thursday
OPEC meets in Vienna
10:00 a.m. Fed Gov. Lael Brainard
10:00 p.m. St. Louis Fed President James Bullard
Friday
8:30 a.m. Durable goods
8:30 a.m. Q1 (second read) Real GDP
9:45 a.m. Markit services PMI
10:00 a.m. Consumer sentiment