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Mar 13, 2018

Asia, Europe and U.S. Stock Markets Report on March 13,2018.


Asia markets: Steel producers in focus

Yen Nee Lee

Asian stock markets ended mixed on Tuesday, after Wall Street gave up gains and as investors look forward to the release of U.S. inflation data later in the day.
But major steel producers in the region suffered losses on expectations that they would be hit by President Donald Trump's tariffs on steel and aluminum imports.
"We believe that steel products from South Korea, Japan, Vietnam, Thailand, South Africa, Australia, U.A.E. and Argentina are most at risk of displacement from the U.S. market," energy research firm Wood Mackenzie said in a note. "These countries are the least likely to be exempted from tariffs and their steel exports have the highest displacement potential."

144.07 0.66%
HSI HSI 31601.45
7.12 0.02%
ASX 200 S&P/ASX 200 5974.70
-21.40 -0.36%
SHANGHAI Shanghai 3311.28
-15.42 -0.46%
KOSPI KOSPI Index 2494.49
10.37 0.42%
CNBC 100 CNBC 100 ASIA IDX 9008.35
47.74 0.53%
Australian shares eased 0.36 percent, with Bluescope Steel down 1.51 percent and Rio Tinto at 1.96 percent lower by Tuesday's close. Financials also lost ground as a probe into bank misconduct starts Tuesday; AMP lost 0.74 percent while Westpac crept down 0.2 percent.
The NAB business survey found that operating conditions in the country had improved in February, with sales and profits increasing sharply. The Australian dollar was against the U.S. dollar, trading at 0.7876 at 3:10 p.m. HK/SIN.
Over in Japan, the benchmark index Nikkei 225 alternated between being in the red and green before closing 0.66 higher despite fresh developments in a cronyism scandal that could hit Prime Minister Shinzo Abe's government. Within the steel sector, JFE Holdings and Nippon Steel eased 0.68 percent each.
The yen fell after holding firm earlier in the day. The Japanese currency traded at 106.84 per U.S. dollar at 3:10 p.m. HK/SIN.
"While a less stable government might ordinarily lessen support for that currency, the market is also mindful about whether this could potentially call into question the longevity of the Abenomics reflation agenda," analysts from the National Australia Bank wrote in a Tuesday report.
South Korea's Kospi index was up 0.42 percent at the close, after steel player Posco recoup earlier losses to gain 0.14 percent. Other steel stocks such as Dongkuk Steel and Hyundai Steel, however, declined by 0.49 percent and 1.53 percent, respectively.
In Greater China, Hong Kong's Hang Seng Index was 0.27 percent lower at 3:15 p.m. HK/SIN, while mainland China's Shanghai composite closed 0.46 percent down.
China said Tuesday it will merge its banking and insurance regulators to streamline and tighten oversight of the financial system.
Chinese banks rallied, with Agricultural Bank of China (ABC) surging close to 5 percent in Hong Kong and 2.48 percent in China. ABC, the third-largest bank in China and globally, announced on Monday it would raise as much as 100 billion yuan ($15.8 billion) in a private placement. China's Ministry of Finance would be one of its backers.

US inflation data due

Wall Street indices ended mostly lower on Monday.
The Dow Jones industrial average closed 157.13 points lower, the S&P 500 slipped 0.1 percent, but the Nasdaq composite bucked the trend to close 0.4 percent higher, boosted by tech giants Apple and Amazon.
In Europe, the STOXX 600 closed up 0.25 percent provisionally, with utilities holding the top spot in sectoral gains following news that RWE will sell 76.8 percent of its Innogy arm to rival E.On.
Investors now turn their attention to U.S. consumer price data due later on Tuesday stateside for a gauge of how the Federal Reserve would manage its policy going forward.
Economists in a Reuters poll projected an annual core consumer price inflation of 1.8 percent, flat from January.
The dollar index, which measures the greenback against a basket of major currencies, lost some ground before trading 0.14 percent higher at around 90.018 at 3:18 p.m. HK/SIN.
CNBC's Nyshka Chandran contributed to this report.


Europe finishes sharply lower after Tillerson ousting rattles markets

Sam Meredith, Alexandra Gibbs

European equities tumbled by Tuesday's market close, as investors digested the news that President Donald Trump had sacked U.S. Secretary of State Rex Tillerson.

FTSE FTSE 7138.78
-75.98 -1.05% 786572295
DAX DAX 12221.03
-197.36 -1.59% 135966885
CAC CAC 5242.79
-33.92 -0.64% 89577340
IBEX 35 --- ---
--- --- ---
The pan-European STOXX 600 extended losses to provisionally close down 0.98 percent, with almost all sectors ending the day in negative territory.
In markets, all major bourses posted solid losses, with the U.K.'s FTSE 100 slipping 1.05 percent, France's CAC 40 falling 0.64 percent and Germany's DAX dropping 1.59 percent.

Iliad slips 10%

Insurance finished the session down 1.36 percent amid earnings news. Hannover Rueck slipped to the bottom of the sector after posting full-year results. Shares of the German reinsurer closed down 4.2 percent.Telecoms was the worst performing sector, closing down 1.62 percent.
Basic resources held strong, making it the only sector to eke out gains, as metal prices rose du
ring trade. The same could not be said for oil prices, which fell into the red during afternoon trade.
Looking at individual stocks, E.ON jumped toward the top of the European benchmark after the company said it would submit a 5.2 billion euro ($6.4 billion) voluntary takeover offer for minority shareholders in Innogy. Shares of E.ON popped up 3.87 percent.
Earlier this week, the German-listed firm and RWE announced a far-reaching deal to effectively break-up RWE's energy networks and retail arm, Innogy, and divide its assets between them.
France's Iliad slumped to the bottom of the index despite the company reporting higher annual sales and profits during 2017. The telecoms group also said the firm was in the final phase of preparing its Italy launch before the summer, Reuters reported. Its shares closed down 10 percent.

Economic data

Stateside, markets were on edge in afternoon trade, following news that Tillerson had been ousted as secretary of state Tuesday, marking the end to a tumultuous tenure as America's top diplomat. Trump plans to appoint CIA Director Mike Pompeo to replace the former Exxon Mobil chief executive, with Deputy CIA Director Gina Haspel poised to run the spy agency.
Meanwhile, a closely-tracked measure of U.S. consumer price inflation rose in line with expectations in February. The core consumer price index (CPI) showed prices were 1.8 percent higher last month when compared to the same period last year. The data is seen as likely to reaffirm the Federal Reserve's case for three interest rate hikes in 2018. On Wall Street, markets came under pressure around Europe's market close.
The U.K.'s Office for Budget Responsibility published its spring economic and fiscal outlook on Tuesday. Finance Minister Philip Hammond stated that the U.K. economy would grow slightly more quickly than previously expected during the course of 2018. Growth forecasts for 2019 and 2020 were kept unchanged at 1.3 percent
Total Votes:
Not a Scientific Survey. Results may not total 100% due to 


Dow drops more than 150 points, Nasdaq snaps 7-day winning streak as tech shares slide

Fred Imbert, Alexandra Gibbs

Stocks fell in choppy trade Tuesday after tech shares pulled back amid concerns trade tensions between the U.S. and China could increase.
The Dow Jones industrial average closed 171 points lower. The 30-stock index climbed 197.79 points at its session high. Microsoft was among the worst-performing stocks on the Dow, falling 2.4 percent.
The S&P 500 declined 0.6 percent with tech falling 1.2 percent. Earlier in the session, tech rose as much as 0.9 percent. The tech-heavy Nasdaq composite dropped 1 percent and snapped a seven-day winning streak. Both S&P 500 and Nasdaq rose as much as 0.7 percent before trading lower.
Qualcomm was the worst-performing stock in the S&P 500 tech sector, falling 5 percent. The stock fell after President Donald Trump shut down Broadcom's proposed buyout of Qualcomm, citing concerns based on national security. Both companies have been ordered to abandon the deal immediately.
The VanEck Vectors Semiconductor ETF (SMH), which tracks semiconductor stocks, fell 1.4 percent after reaching an all-time high.
Dow Jones Industrials' Massive One Day Drop Of 4.6 Percent Rattles Markets Overseas
Spencer Platt | Getty Images News | Getty Images
Dow Jones Industrials' Massive One Day Drop Of 4.6 Percent Rattles Markets Overseas
"The worry is with the Tillerson ouster and Broadcom blockage from the Trump administration that this will add fuel to the fire in a battle versus China on the horizon over the coming 12 to 18 months," said Dan Ives, head of technology research at GBH Insights, in a note.
"While most tech names including FANG stocks are relatively insulated from any China worries/headwinds, this is enough of a near term concern for tech investors to take some profits after a golden run over the last few weeks with many of these names making new highs," Ives said.
Earlier on Tuesday, Trump ousted Secretary of State Rex Tillerson. The Washington Post first reported that Tillerson was out before Trump confirmed it in a tweet. Trump also said CIA Director Mike Pompeo would take over as secretary of state.
"It's complete turnover at the White House and right on the precipice of these talks with North Korea," said Jack Ablin, founding partner of Cresset Wealth. "Replacing him with the CIA director Pompeo, at face value I don't think it means a ton to investors; it just underscores this turbulence going on inside the White House."
Politico also reported that the Trump administration is targeting $30 billion in Chinese imports, but noted the president asked for a bigger number.
Stocks initially rose on the back of data that showed U.S. inflation remained tame.
The U.S. consumer price index rose 0.2 percent in February, in line with expectations. Inflation concerns permeated through the market last month as investors worried that higher inflation would lead the Federal Reserve to tighten monetary policy at a faster rate.
"Traders exhaled a sigh of relief, for combined with last week's tepid wage growth data, nothing suggests that inflation has gotten to a point that forces the Fed to quicken its step down the path to normalization," said Jeremy Klein, chief market strategist at FBN Securities.
"Nevertheless, the central bank will likely upgrade its near term outlook for the economy from 'roughly balanced.'"
Stocks were coming off a mixed session in which the Nasdaq closed at a record while the Dow and S&P 500 fell amid trade-war worries.
Last week, Trump signed two declarations which would implement tariffs on steel and aluminum imports. The tariffs are expected to take effect in the coming weeks and will see a 25 percent charge placed on steel, and 10 percent levy on aluminum — Canada and Mexico however are exempt. Investors remain on edge over concerns that countries around the world may strike back because of the tariffs.
CNBC's Chloe Aiello contributed to this report.