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Asian Markets at Close Report

European Markets at Close Report

May 22, 2017

Asia, Europe & U.S. Stock Markets Closings' Summary Reports on May 22, 2017

ASIA
marketwatch.com
 
Ese Erheriene

Asian stocks rose as last week’s global w orries about the U.S. political landscape continued to ease, with Australian stocks stabilizing after their worst performance in months.
Worries stemming from U.S. political uncertainty faded with President Donald Trump traveling in the Middle East and later this week to Europe. Investors also largely shrugged off further missile tests by North Korea over the weekend.
“However ongoing concerns about the potential for instability in U.S. politics and subsequent questions around the implementation of a stimulus agenda could see a reversal in sentiment at any time,” cautioned Michael McCarthy, chief market strategist at CMC.
Following bank-led declines last week, Australia’s S&P/ASX 200 XJO, +0.76%  was recently up 0.9% as Commonwealth Bank of Australia CBA, +1.30%  gained 1.4%. Further rebounds in commodity prices also helped.
After rising 9% the past two weeks, oil LCON7, +0.30%  rose a further 1% in Asian trading Monday. Looming is Thursday’s meeting of the Organization of the Petroleum Exporting Countries, at which an extension to ongoing production cuts is expected.
Read: 4 potential outcomes for OPEC’s crucial meeting
Japan stocks, which also dragged last week, were solidly higher Monday.
Last week, the Nikkei’s month-long winning streak snapped with a 1.5% decline, moving the index back from 20000—above which it hasn’t traded since December 2015. The Nikkei NIK, +0.45%  was up 0.5% after the midday break as the dollar has stabilized at around ¥111.50 after briefly dipping below ¥111 before markets opened in Asia.
In Japan, exports rose 7.5% in April, buoyed by strong demand in Asia for semiconductors, semiconductor-making equipment and steel. It marked the fifth-consecutive month of rising exports.
Steel, energy and machinery names—beneficiaries of global growth—led the gains in Tokyo. Nippon Steel & Sumitomo Metal 9432, -0.04%  added 3.2%, SMC rose 2.7% and Inpex 1605, +1.09%  was up 1.2%.
Meanwhile, Hong Kong’s Hang Seng Index HSI, +0.86%  and Korea’s Kospi Index SEU, +0.68%  were on track for new highs on Monday. The Hang Seng rose nearly 1%, setting the stage for a fresh 22-month closing high. The Korean index gained 0.5%, putting it above the latest closing record set earlier this month.
North Korea’s missile test was the eighth so far this year, including two failed tests. Still, South Korean stocks have been unfazed, with the Kospi up 13% this year.
Meanwhile, Indonesia’s JSX benchmark stock index JAKIDX, -0.73%  continued to push into record territory of its own after late Friday’s 2.6% surge caused by Standard & Poor’s moving the country’s sovereign-debt rating into investment-grade territory. Jumping as much as 1.4% in morning trading, the index was recently up 0.7%.
Investment bank DNB sees the move likely being short-lived, contending Indonesia’s improved economic fundamentals the past three years were already in investors’ calculus. The JSX has risen 45% from September 2015’s low.
Arguably last week’s upside standout, China is back to lagging other Asian stocks markets. The Shanghai Composite SHCOMP, -0.48%  was down 0.2%.

EUROPE 
 
Carla Mozee, Sara Sjolin

European stocks ended a choppy session slightly lower, weighed by German stocks, as the euro rallied after comments about the shared currency by German Chancellor Angela Merkel.
Speaking at an event with students in Berlin, Merkel blamed European Central Bank policies for making the euro “too weak” and said it has made German products cheaper. Those comments sent the euro EURUSD, +0.2766%  to an intraday high of $1.1265, the highest level since November.
The stronger currency weighed on Germany’s DAX 30 index DAX, -0.15% which is made up of companies that are heavily dependent on exports. The benchmark fell 0.2% to end at 12,619.46, led by a 1.3% loss for industrial heavyweight Siemens AG SIE, -1.27% SIEGY, -0.86%
More broadly in Europe, the Stoxx Europe 600 index SXXP, -0.09% ) fell 0.1% to 391.14.
The pan-European benchmark last week fell 1%—the first decline in four weeks. The decline was largely pegged to a rout in global equities that followed a report that U.S. President Donald Trump tried to stop a Federal Bureau of Investigation probe into links between his administration and Russian officials.
“The political risk surrounding Donald Trump is beginning to subside,” said Richard Perry, market analyst at Hantec Markets, in a note.
“It is interesting to see markets beginning to look more settled…as the agenda turns away from Trump’s domestic woes and more towards international trade deals,” he added.
Trump while in Saudi Arabia this weekend oversaw a signing ceremony for a $110 billion package of new arms deals.
Last week’s New York Times report fueled questions about the Trump administration’s ability to push through tax cuts, higher fiscal spending and looser regulations. The prospect of an economic boost from the proposed changes had helped to push stocks world-wide to highs.
Read: Here’s how impeachment works—and why Trump is safe for now
Also on the radar Monday was a meeting of eurozone finance ministers and the International Monetary Fund, and investors will watch whether they can agree to provide debt relief to Greece after the country agreed to new austerity measures. In Athens, the Athex Composite GD, +0.56%  ended 0.6% higher at 788.53.
Individual indexes: France’s CAC 40 PX1, -0.03%  ended marginally lower at 5,322.88, while the U.K.’s FTSE 100 UKX, +0.34%  rose 0.3% to 7,496.24. Stocks in London got a boost from a weaker pound GBPUSD, -0.3068%  that dropped after a poll showed support for Theresa May’s Conservative Party is falling ahead of the June 8 vote
Stock movers: Clariant AG shares CLN, +3.45%  jumped 3.5% after the Swiss chemicals company and Huntsman Corp. HUN, -2.10%  reached an agreement to merge in an all-stock deal that would create a company worth about $14 billion.
Aegon NV AGN, +6.47%  climbed 6.5% after the Dutch insurer said it would sell its two largest U.S. life businesses.
UCB SA UCB, -18.04%  tumbled 18% the Brussels-based company said it doesn’t expect U.S. approval of its romosozumab treatment for postmenopausal women with osteoporosis to occur in 2017. A “newly observed cardiovascular safety signal will have to be assessed,” although a study of the treatment met primary and secondary endpoints, said UCB, which is working on romosozumab with Amgen Inc. AMGN, -2.23%
Royal Bank of Scotland Group PLC shares RBS, -0.49% RBS, -0.58%  ended down 0.5% after the start of a High Court trial was adjourned by 24 hours after the lender reportedly doubled its settlement offer.
U.S.

Wallace Witkowski, Ryan Vlastelica

U.S. stocks closed higher Monday for a third session of gains, recovering most of last week’s sharp loss as tech and industrial stocks rallied in a day marked by lighter than usual volume.
The Dow Jones Industrial Average DJIA, +0.43% finished up 89.99 points, or 0.4%, to 20,894.83, led higher by more than 1% gains in Boeing Co. BA, +1.61% , 3M Co. MMM, +1.38% , UnitedHealth Group Inc. UNH, +1.22% Cisco Systems Inc. CSCO, +1.22%  and Microsoft Corp. MSFT, +1.12%
The S&P 500 index SPX, +0.52% rose 12.29 points, or 0.5%, to close at 2,394.02, and swung back into positive territory for the month of May. The day’s gains were broad-based, with 10 of the 11 primary S&P 500 sectors rising on the day. The industrials sector rose 0.7% as defense stocks advanced on an arms deal with Saudi Arabia, outstripped only by utilities, up 0.9%, and tech, up 1%.
The Nasdaq Composite Index COMP, +0.82% rose 49.91 points, or 0.8%, to finish at 6,133.62.
With the bulk of earnings season over, investors will scrutinize U.S. political news, like headlines last week that triggered a sharp midweek plunge for stocks. President Donald Trump traveled to the Middle East this weekend and delivered a speech with Israeli Prime Minister Benjamin Netanyahu on Monday.
Read: In the battle for control of the stock market, bulls may have an edge
Last week’s dip was driven by midweek reports that Trump asked then-Federal Bureau of Investigation Director James Comey to stop an investigation into Russian meddling into the U.S. election. Those reports have helped to sow doubt that Trump will be able to push through a pro-growth agenda seen as driving the economy and stocks into higher gear.
It didn’t take much to push around stocks Monday with volumes being extremely low, said Sahak Manuelian, managing director of equity trading, in an interview.
“Volumes are terrible across the board,” Manuelian said. “I think there’s just a lack of market participation within this rally.”
By the close, composite volume on the New York Stock Exchange was at 3.14 billion shares, and about 1.71 billion shares on the Nasdaq. Average daily trading volume for year to date has been 3.53 billion shares on the NYSE, and 1.86 billion shares on the Nasdaq, according to Dow Jones data.
Investors will this week try to whether that selloff was temporary or a “signal of something more sinister,” said Michael Stanes, investment director at Heartwood Investment Management, in a note Monday.
Read: This chart shows how stocks aren’t breaking down—but not breaking out, either
He argued, though, that gains for stocks after the presidential election are also due to improved global economic conditions and fading disinflationary effects that started in summer 2016. The fundamental backdrop hasn’t changed, with the U.S. economy still on a solid footing and other global economies steady, said Stanes.
“We recognize that we are in the latter part of the market cycle and sentiment is likely to remain vulnerable to pressure points as we move through the year,” he said.
Read: White House to roll out budget proposal, cutting Medicaid, assistance to the poor
Fed speakers ahead: On a quiet day for data, the Chicago national activity index was at a three-year high of 0.49 in April, compared with 0.07 in March.
Read: Buoyant U.S. economy rides out rough political sea, but more storms ahead
Two Fed speakers were lined up to speak after the market closes on Monday. Fed Gov. Lael Brainard is slated to discuss “the roles of opportunity and inclusion in strengthening the U.S. economy” in Minneapolis at 7:30 p.m. Eastern. Then Chicago Fed President Charles Evans gives a speech on the economy at an OTC derivatives conference in Shanghai, China, at 9:10 p.m. Eastern.
Stock movers: Blackstone Group LP BX, +6.73%  shares closed up 6.7% after Saudi Arabia’s Public Investment Fund pledged $20 billion to the firm’s new infrastructure fund.
Shares of Huntsman Corp. HUN, -2.10% fell 2.1%, reversing an earlier advance that came on news it will merge with Switzerland’s Clariant AG CLN, +3.45% creating a chemicals giant valued at $14 billion. Under terms of the deal announced Monday, Clariant shareholders will own 52% of the new entity and Huntsman will own the rest.
Ford Motor Co. F, +2.12%  shares finished up 2.1% on news the auto maker plans to replace Chief Executive Officer Mark Fields with Jim Hackett, a Ford executive who leads a unit working on autonomous cars.
Companies in the defense sector rose after Saudi Arabia and other Gulf states signed arms deals worth $350 billion with the U.S. over the weekend. Lockheed Martin Corp. LMT, +1.55%  rose 1.6% while Raytheon Corp. RTN, +0.57%  added 0.6%. The iShares U.S. Aerospace & Defense ETF ITA, +0.87%  rose 0.9%.
Advanced Micro Devices Inc. AMD, -3.29%  shares fell 3.3% on heavy volume after speculation of a licensing deal with Intel Corp. INTC, +1.05%  faded.
Other markets: Asian stocks ADOW, +1.29%  were largely higher, outside of a 0.4% dip for the Shanghai SHCOMP, -0.48% In Europe, stocks finished lower with the Stoxx Europe 600 index SXXP, -0.09% down 0.1%.
Read: Miners, oil share lead the FTSE 100 higher
The dollar DXY, -0.18%  was flat, and lower against the euro EURUSD, +0.2855%  after German Chancellor Angela Merkel reportedly said because of European Central Bank policies, the weaker euro has made German products cheaper.
Read: This is the ‘bad’ kind of dollar weakness
Gold prices GCM7, +0.54%  settled up 0.6% at $1,246.40 an ounce, a three-week high. West Texas Intermediate oil prices CLM7, +0.95%  rose 0.8% to settle at $50.73 a barrel on an expected production cut from the Organization of the Petroleum Exporting Countries.
Read: 4 potential outcomes for OPEC’s crucial meeting
—Barbara Kollmeyer in Madrid contributed to this article