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Mar 12, 2018

Asia, Europe and U.S. Stock Markets Report. on arch 12, 2018


Stocks, currencies and US jobs data in focus

Cheang Ming

Asian stocks got off to a strong start to the week, with regional markets closing higher on Monday. Those gains came after stock indexes stateside surged in the last session on expectation-topping U.S. jobs data.
In Tokyo, the Nikkei 225 closed up 1.65 percent, or 354.83 points, to close at 21,824.03 after recording a more than 400-point gain earlier in the session. The broader Topix rose 1.51 percent, with gains seen across all of the index's 33 sectors despite developments related to a possible cronyism scandal in the country.
Over in Seoul, the benchmark Kospi index advanced 1 percent to end at 2,484.12, its highest levels in around five weeks as manufacturing and tech names notched gains. Samsung Electronics, however, closed flat.
Hong Kong's Hang Seng Index advanced 1.84 percent, or 571.77 points, by 3:22 p.m. HK/SIN, as energy and tech names led broad-based gains. Index heavyweight Tencent was up 2.42 percent ahead of the market close.
Mainland markets also traded higher, but saw slighter gains: The Shanghai composite edged up by 0.58 percent to close at 3,326.33 and the Shenzhen composite finished 1.24 percent higher at 1,908.84. Small caps outperformed, with the ChiNext start-up board up 1.72 percent in comparison with the blue chip CSI 300's 0.46 percent gain.
Down Under, the S&P/ASX 200 rose 0.55 percent to end at 5,996.10. Gains were led by the materials and energy sub-indexes, which rose 1.58 percent and 1.15 percent respectively, while gold producers slid 1.88 percent.
Steel producers in Asia were in focus after U.S. President Donald Trump tweeted on Friday that he was working with Australian Prime Minister Malcolm Turnbull to ensure that Australia would not face U.S. steel and aluminum tariffs. Shares of Bluescope Steel rose 3.46 percent.
Meanwhile, Japanese and South Korean steel producers recovered after sliding in the last session. The Topix Iron and Steel index was up 2.03 percent, with Nippon Steel and Sumitomo Metal — the country's largest steelmaker — closing higher by 2.84 percent. JFE Holdings advanced 0.91 percent.
Meanwhile, South Korea's Posco and Hyundai Steel rose 2.32 percent and 2.35 percent, respectively.
Trump had signed proclamations to impose tariffs of 25 percent and 10 percent on steel and aluminum imports, respectively, last week, although the door was left open for potential exemptions.

Goldilocks US jobs report

Gains in the region came off the back of the surge on Wall Street in the last session. All three major U.S. stock indexes recorded gains of around 1.7 percent on the release of robust jobs data. The Nasdaq composite, in particular, hit both intraday and closing highs on Friday.
Data released on Friday showed that the U.S. economy added 313,000 jobs last month, above a forecast of 200,000 in a Reuters poll. Wage growth, however, rose 2.6 percent on an annualized basis, coming in below expectations.
The solid job creation numbers and lower-than-expected wage growth eased worries about the Federal Reserve's rate hike trajectory.
"Fears of four rate hikes from the Fed this year have receded while risk sentiment is back firmly in the ascendancy — for now at least," Ray Attrill, head of FX strategy at National Australia Bank, wrote in a morning note.
In currencies, the dollar index, which tracks the U.S. currency against a basket of rivals, traded at 90.034 at 3:15 p.m. HK/SIN.
Against the safe-haven yen, the dollar was a touch softer at 106.63, having gained last week on geopolitical developments concerning U.S.-North Korea ties. The Japanese currency also came likely came under pressure after comments from Bank of Japan Governor Haruhiko Kuroda on Friday were seen as dovish by markets.
The Australian dollar last traded at $0.7870.
On the commodities front, oil prices gave up some gains after bouncing in the last session from recent declines. U.S. West Texas Intermediate slipped 0.23 percent to trade at $61.90 per barrel after settling more than 3 percent higher on Friday. Brent crude futures shed 0.15 percent to trade at $65.39.
In individual stocks, Newcrest Mining fell 4.59 percent after the company said in an update that its fiscal 2018 guidance would be "adversely" impacted after identifying a breakthrough of tailings material at its Cadia mine.
Elsewhere, shares of Prada listed in Hong Kong bounced 14.2 percent by 3:28 p.m. HK/SIN after the luxury retailer said it expected to return to growth this year.
Meanwhile, Singapore-listed Noble Group surged 27.07 percent by 3:17 p.m. HK/SIN. The company said in a release that it had not paid the coupon due Mar. 9, 2018, with respect to $750 million notes due on Mar. 9, 2022.


Europe ekes out minor gains by the close, as utilities outperform fellow sectors

Silvia Amaro, Alexandra Gibbs

European equities finished mostly higher Monday as markets in the region tried to shake off concerns surrounding tariffs and focus on the positive trading seen in individual stocks.

FTSE FTSE 7214.76
-9.75 -0.13% 626419798
DAX DAX 12418.39
71.71 0.58% 141032375
CAC CAC 5276.71
2.31 0.04% 66056025
IBEX 35 --- ---
--- --- ---
The pan-European STOXX 600 closed up 0.25 percent provisionally, off its session highs, while the majority of the region's sectors ended in positive territory.
Major bourses showed a mixed picture. The U.K.'s FTSE 100 closed down 0.13 percent, the French CAC 40 ended relatively flat, up 0.04 percent, while Germany's DAX popped 0.58 percent.

Utilities rise 1%

Utilities held the top spot in sectoral gains by the close following news that RWE was to sell 76.8 percent of its Innogy arm to rival E.On. Morgan Stanley said the deal could be a "win-win" decision. Innogy shares rose to the top of the STOXX 600, finishing up 12.1 percent, while RWE came in second, jumping 9.2 percent, and E.On rose 5.4 percent.
The commodities sector closed slightly lower as metal prices came under pressure, causing a number of London-listed miners to post declines.
GKN initially rose 2 percent during trade after Melrose increased its offer for the company to £8.1 billion ($11.24 billion). Shares of GKN, however, reversed gains to close down 2.5 percent while Melrose sank 5 percent — making it one of the STOXX 600's worst performers.
In individual stocks news, shares of Aryzta slipped 2.3 percent after the company reported widening losses in the six months to January. Deutsche Bank eked out gains by the close after revealing the price range for an initial public offering of its asset management arm, which is valued at up to 7.2 billion euros ($8.86 billion), according to Reuters.
Inmarsat sank 5.3 percent after CFRA Research cut its price target on the stock. The news added pressure to telecoms, which closed lower as a sector. This comes after the company reported earnings last week.
Equities across the globe saw a strong start to the week, after the U.S. delivered a nonfarm payrolls report that surpassed analyst expectations. Last Friday, data released showed that the U.S. economy added 313,000 jobs in February, above a forecast of 200,000. Wage growth came in below expectations, rising 2.6 percent on an annualized basis.
The solid job creation numbers and lower-than-expected wage growth eased worries about the Federal Reserve's rate hike trajectory. The central bank is due to meet next week.
During Europe's afternoon trade, markets turned their attention to Wall Street, which showed a mixed-to-higher picture by the end of Europe's session. Investors in the U.S. were on edge, as concerns over a possible trade war resurfaced, after Trump implemented tariffs on certain imports. Last week, Trump signed two declarations to implement tariffs on steel and aluminum imports — Canada and Mexico, however, are exempt.
Over the weekend, Germany's Economy Minister Brigitte Zypries denounced once again the decision from President Donald Trump, arguing it puts "the order of a free global economy at risk." The EU is working to see its 28 countries excluded from the tariffs.

Wage growth spooked the market after January's jobs report, but what could be the next stumbling block for this bull market?

Total Votes:
Not a Scientific Survey. Results may not total 100% due to rounding.
—CNBC's Cheang Ming contributed to this article.


Dow closes 157 points lower amid lingering trade-war worries

Fred Imbert

The Dow Jones industrial average fell on Monday as investors worried a trade war could develop after President Donald Trump implemented tariffs on steel and aluminum imports.
The 30-stock index declined 157.13 points to close at 25,178.61, with Boeing, Caterpillar and United Technologies all falling at least 2 percent. The Dow rose more than 100 points earlier in the session as shares of Apple and Goldman Sachs reached all-time highs.
"It's a growing concern that a mistake in trade policy could be as big as a mistake in monetary policy," said Art Hogan, chief market strategist at B. Riley FBR.
Trump implemented a 25 percent tariff on steel imports and a 10 percent charge on aluminum imports. However, Canada and Mexico — two key U.S. trade partners — were excluded from the tariffs. But investors worried that other countries could retaliate by imposing tariffs on U.S. goods.
The S&P 500 slipped 0.1 percent to 2,783.02, with industrials dropping 1.2 percent. The Nasdaq composite climbed 0.4 percent to 7,588.32 to reach intraday and closing records as Apple recovered its losses from last month's correction. Amazon also hit an all-time high to help lead the gains.
On Friday, the Nasdaq erased its losses the correction, surging to an all-time high after the Bureau of Labor Statistics reported better-than-expected jobs growth for last month. The S&P 500 is 3.1 percent away from recovering those losses, while the Dow is 5.4 percent away.
Traders work on the floor of the New York Stock Exchange
Brendan McDermid | Retuers
Traders work on the floor of the New York Stock Exchange
"At the end of the day, what matters is corporate earnings," said Greg Powell, CEO of Fi-Plan Partners. "That's what drives the market." Powell also noted investors should expect more volatility moving forward, but he sees further gains ahead.
The major averages fell 10 percent from their 52-week highs last month, marking the first correction of that magnitude since 2016. The correction was sparked, in part, by fears that higher inflation would push the Federal Reserve to tighten monetary policy faster than the market expected. Inflation fears eased on Friday with the release of last month's wage-growth numbers.
"Remember the havoc that a one-month jump in the hourly wage rate caused in January? Inflation fears were all over the media and the stock market's correction began," said Marc Chaikin, CEO of Chaikin Analytics. "At least for now, that's behind us."
The Fed is scheduled to meet next week, with most market participants expecting the central bank to raise interest rates. Market expectations for a March rate hike stood at 86 percent on Monday, according to the CME Group's FedWatch tool.
In corporate news, David Solomon will take over as president and COO at Goldman Sachs after Harvey Schwartz, his sole competitor for the CEO position, retires next month. Goldman shares rose as much as 1.7 percent before closing 1 percent higher.
Andrew Liveris will step down from his post as executive chairman at DowDuPont in April. Jeff Fettig, co-lead independent director at DowDuPont, will take over the role upon Liveris' departure.
Analysts at Jefferies said in a note Monday that Steven Spielberg's "Ready Player One" movie could be a catalyst for both Nvidia and Advanced Micro Devices. In a note to clients, they said: "We believe that the movie will drive sales of VR headsets that require high-performance GPUs from NVDA and AMD."

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