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Asian Markets at Close Report

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Feb 20, 2018

Asia ,Europe and U.S. Stock Markets Closing Reports on on February 20,2018

marketwatch.com

Asian stocks beat a retreat; Nikkei, Hong Kong stumble

Kenan Machado


Asian stocks fell Tuesday, as indexes gave up some early-week gains amid reduced holiday trading and a move lower globally for stocks.
Japan’s Nikkei NIK, -1.01%  closed 1% down, giving up some of its early-week rise thanks to the weakness of its electronics and banking sectors. The selling in stocks comes despite a slip in the yen versus the dollar USDJPY, -0.02%  , with the greenback up 0.5% at ¥107.1580.
South Korea’s Kospi SEU, -1.13%  fell 1.1%, dragged lower by index heavyweight Samsung Electronics 005930, -2.03%  , which dropped 2% after falling 1.3% on Monday. That followed a near-10% climb last week.
The Hang Seng Index HSI, -0.78%   pared an early slide on its first full day of trading in nearly a week, but still finished down 0.8%. The main benchmarks in Singapore and New Zealand both fell 0.3%.
With Chinese and Taiwanese markets still closed for the Lunar New Year holiday, investors should be cautioned against reading too much into recent price action due to thin volumes.
The drop came as European stocks pulled back overnight and S&P 500 futures ESH8, -0.73%  were recently down 0.2% ahead of Tuesday’s start to a holiday-shortened week in the U.S.
While earnings season continues especially in places such as Australia, investors are already looking beyond the latest, generally strong, updates in the wake of the cross-market uncertainty that has developed this month, said Paul Kitney, chief strategist for Asia-Pacific stocks at Daiwa Capital Markets in Hong Kong.
Brent crude oil futures LCOJ8, -0.99%   fell 0.9% but remained up so far this week, while aluminum escaped metals-sector selling in the metals sector in the wake of comments from the Trump administration late last week that it was considering imposing import tariffs.
Away from equities, Brent oil futures LCOJ8, -0.99%  eased 0.4% in Asian trading after Monday’s 1.3% gain. And bitcoin BTCUSD, -2.93%  has risen to about $11,400, according to CoinDesk, as it continued to rebound from early February’s low of $5,947.
Read: The stock market’s new ‘wall of worry’ is built on inflation and rate fears


                                                                      EUROPE

marketwatch.com

European stocks revived as euro drops, but HSBC, BHP Billiton updates disappoint

Carla Mozee


European stocks closed higher Tuesday, aided by a pullback in the euro on news of a potentially favorable development for the U.K. in its Brexit negotiations with the European Union.
But stocks did struggle during the session, with heavyweights HSBC PLC and BHP Billiton PLC issuing downbeat financial results as investors returned to the markets after holidays in the U.S. and Asia.
How markets moved
The Stoxx Europe 600 index SXXP, +0.60% closed up 0.6% to 380.51. On Monday, the benchmark lost 0.6%.
Germany’s DAX 30 index DAX, +0.83% jumped 0.8% to 12,487.90, and France’s CAC 40 PX1, +0.64% advanced 0.6% to end at 5,289.86.
Spain’s IBEX 35 IBEX, +0.91%  gained 0.9% to finish at 9,895.30, but the U.K.’s FTSE 100 UKX, -0.01% ended down less than 1 point at 7,246.77.
Check out: More investors looking to cut U.K. assets as Brexit uncertainty persists
The euro EURUSD, -0.0081%  bought $1.2354, down from $1.2407 late Monday in New York. Against the pound EURGBP, +0.1705% the euro fell roughly 0.5% to 0.8814 pence.
What drove markets
European stocks staged a turnaround as losses for the euro against the dollar EURUSD, -0.0081%  and the pound EURGBP, +0.1705%  picked up pace during the session. The moves came after a Business Insider report said European lawmakers are ready to break with EU negotiators’ position on Brexit. The European Parliament is preparing a resolution that would call for the U.K. to have single-market access, according to the report.
A weaker euro can help shares of European exporters, whose products become less expensive for overseas clients to purchase when the shared currency’s value declines.
European stocks earlier turned lower as investors appeared hesitant to dive full-force into buying mode before the opening bell on Wall Street, where investors were returning after Monday’s Presidents Day holiday. In Hong Kong, stocks HSI, -0.78%  fell as trading resumed following the Lunar New Year holiday.
What strategists were saying
“The big move…was in the normally somnolent [euro/British pound currency] pair, which slumped as reports hit that the EU parliament was preparing it’s own plan for the U.K.-EU relationship, which would see the UK given special associate status,” said Chris Beauchamp, chief market analyst at IG.
“This kind of bespoke deal is exactly what the pair need, an acknowledgment of their shared history and mutual dependency,” Beauchamp said.
Stock movers
HSBC PLC shares HSBA, -3.09% HSBA, -3.09%  dropped 3.1% after the Asia-focused lender missed full-year profit expectations. The bank’s earnings were hit by the collapses of two borrowers: U.K. services and construction company Carillion PLC and South African retailer Steinhoff International Holdings SNH, -3.32%
BHP Billiton PLC BLT, -4.58% BHP, -4.40% BHP, -0.41%  was knocked down 4.6% as first-half profit before one-off items of $4.05 billion came in below the $4.21 billion consensus estimate in a Wall Street Journal poll of analysts. But BHP said it would raise its midyear payout by 38%.
InterContinental Hotels Group PLC shares IHG, -2.75%  slumped 2.8%. The company, whose brands include Crowne Plaza and Holiday Inn, said “no additional capital return will be paid in calendar year 2018,” so it may focus on growth plans. IHG’s 2017 pretax profit was ahead of expectations and that it will raised its total dividend for the year.
Economic data
Economic sentiment in Germany declined in February but a less-than-anticipated pace, according to the widely watched ZEW survey. The economic sentiment measure came in at 17.8 points, down from 20.4 in January but ahead of an estimate of 16.
“About two-thirds of the survey participants expect the inflation rate in Germany and the entire euro area to increase in the next six months,” ZEW President Professor Achim Wambach said in a statement.
                                         

                                                                      U.S.

marketwatch.com

Dow, S&P 500 snap 6-day win streak; Walmart shares weigh

Sue Chang, Ryan Vlastelica


U.S. stocks snapped a six-day winning streak Tuesday, with the Dow and S&P 500 weighed down by a steep loss for Walmart as investors also watched climbing bond yields, which could make equities less attractive at current levels.
How did main benchmarks fare?
The Dow Jones Industrial Average DJIA, -1.01% fell 254.63 points, or 1%, to end at 24,964.75. The S&P 500 SPX, -0.58% dropped 15.96 points, or 0.6%, to 2,716.26 and the Nasdaq Composite Index COMP, -0.07% shed 5.16 points to 7,234.31. The declines ended a six-day string of gains for the Dow and S&P.
Last week, the Dow and S&P 500 each gained 4.3%, while the Nasdaq leapt 5.3%, with all three gauges snapping a two-week losing streak. The Dow’s weekly advance was its largest since November 2016, while the S&P’s was its best since January 2013. The Nasdaq posted its biggest one-week gain since December 2011.
Opinion: Calm your nerves with value stocks as faster inflation roils the market
What drove the markets?
A renewed push higher for U.S. bond yields—with the dollar also stronger—was being blamed for the market’s weakness. Climbing bond yields—reflecting rising inflation worries—were the spark that set off the market meltdown earlier this month. A slightly strengthening greenback also may prove a drag on equities, with multinationals providing sales and services abroad the most impacted by a firmer buck.
Bond investors are bracing for a wave of U.S. Treasury issuance, which was also weighing on prices for government paper, driving yields, which move inversely, up. Higher yields could increase the cost of corporate borrowing, a negative for stocks. Higher yields may also compete against stocks for investor attention.
The Treasury Department will auction $35 billion of 5-year notes and $29 billion of 7-year notes this week. The auction for $28 billion of 2-year notes held earlier was met with solid demand with bid to cover ratio, a measure of demand, coming in at 2.72.
Read: The stock market and the bond market have struck a truce
Bond investors have been uneasy after recent stronger inflation readings lifted expectations for potential more-aggressive interest-rate hikes than bond buyers expected.
Wednesday’s release of minutes from the Federal Reserve’s January policy meeting, the last chaired by Janet Yellen, will be combed for clues to the central bank’s thinking on interest rates.
Looking ahead, Philadelphia Federal Reserve Bank President Patrick Harker and Minneapolis Federal Reserve Bank President Neel Kashkari are due to deliver speeches this week.
Check out: Why the worst may be over in the stock-market correction
What were strategists saying?
“Stock valuations aren’t cheap, but they’re not expensive either, given the earnings environment, where there’s growth on both an organic basis and in large part because of the tax cuts,” said Malcolm Polley, president and chief investment officer at Stewart Capital Advisors.
“But that’s the one monkey wrench that could create an issue: the tax cuts were enacted at a time of expansion, when a recession wasn’t on the horizon. If this creates too much demand, that’s a recipe for inflation, and the market has been bouncing around on that issue.”
Read: The stock market’s new ‘wall of worry’ is built on inflation and rate fears
Which stocks were active?
Walmart Inc. WMT, -10.18%  shed 10.2% after its fourth-quarter adjusted earnings per share missed forecasts. The stock, a Dow component, was a drag on the blue-chip gauge, and posted its biggest one-day percentage drop since Jan. 8, 1988.
Shares of Rite Aid RAD, +3.29% gained 3.3% after grocer Albertsons Cos. said it would buy the rest of the drugstore chain that Walgreens Boots Alliance Inc. WBA, -0.01% isn’t buying.
U.S.-listed shares of HSBC Holdings PLC HSBC, -3.36%  fell 3.4% after the bank’s profit missed forecasts due to the collapse of two high-profile borrowers.
Shares of NXP Semiconductors NV NXPI, +5.96%  rallied 6% after a report Qualcomm Inc. QCOM, -1.33%  will up its bid for the chip maker to around $44 billion, as it tries to win shareholder support for the acquisition, The Wall Street Journal reported Tuesday, citing sources. Shares of Qualcomm lost 3.4%.
MiMedx Group Inc. MDXG, -39.53%  tumbled 40% after the biotechnology company said it was delaying the release of fourth-quarter and full-year 2017 earnings to conduct an accounting review. More than 9.5 million shares exchanged hands, significantly higher than its 30-day average of nearly 2.1 million.
How did other assets perform?
After a weaker session on Monday, European stocks SXXP, +0.60% were mostly higher, while in Asia, Japan’s Nikkei 225 index NIK, -1.01%  and the Hong Kong Hang Seng Index HSI, -0.78%  each fell around 1%. Several bourses in Asia remain closed for the Lunar New Year holiday.
See: Why the stock market may not play dead in the Year of the Dog
The ICE U.S. Dollar Index DXY, +0.60%  climbed 0.7%. Gold prices GCJ8, +0.02% settled lower and prices for U.S. crude oil CLH8, +0.15%  were slightly higher.
See: The stock market and the bond market have struck a truce
Bitcoin BTCUSD, -3.29%  continued to push past $11,000, last changing hands at $11,717, according to CoinDesk.
—Barbara Kollmeyer contributed to this report