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Apr 18, 2018

CNBC | Asia, Europe and U.S. stock Markets Report, April 18, 2018.

                                                                         ASIA
cnbc.com

Stocks, trade, oil and earnings in focus

Cheang Ming



Markets in Asia closed higher on Wednesday, as investor confidence firmed on the back of Wall Street's advance following strong earnings. The gains also came amid lingering concerns over trade-related developments.
In Japan, the Nikkei 225 rose by 1.42 percent, or 310.61 points, to close at 22,158.20 and the broader Topix added 1.14 percent. Gains were broad-based amid the softer yen, with retailers, oil and technology among the rising sectors.
Across the Korean Strait, the benchmark Kospi advanced 1.07 percent to end at 2,479.98, driven by gains seen in manufacturing stocks and financials, among others. The technology space was mixed, although index heavyweight Samsung Electronics soared 2.76 percent.
Australia's S&P/ASX 200 edged up by 0.34 percent to finish at 5,861.40 as a slight decline in the heavily weighted financials subindex was offset by gains seen in materials, energy and consumer names.





NIKKEI NIKKEI 22158.20
310.61 1.42%
HSI HSI 30284.25
221.50 0.74%
ASX 200 S&P/ASX 200 5861.40
19.90 0.34%
SHANGHAI Shanghai 3091.31
24.51 0.80%
KOSPI KOSPI Index 2479.98
26.21 1.07%
CNBC 100 CNBC 100 ASIA IDX 8659.87
71.51 0.83%
Elsewhere, Hong Kong's Hang Seng Index closed higher by 0.74 percent at 30,284.25, off an intraday high of 30,487.17 seen in the morning.
Mainland markets finished the day in positive territory, with the Shanghai composite erasing losses seen earlier to close up 0.8 percent at 3,091.31. The Shenzhen composite rose 1.08 percent to 1,803.84.
Gains were driven by the move higher in bank stocks after China's central bank said Tuesday it was cutting the reserve requirement ratio by 100 basis points for most banks. "China's reserve requirement ratio cut is supportive of risk sentiment as banks' profit is expected to improve with lower funding costs," OCBC Bank analysts said in a note.
Despite the broader climb, Chinese automakers took a beating after Beijing announced plans to ease restrictions in its car market.
Recent trade tensions also simmered as investors digested China's Tuesday announcement that it would impose deposits on U.S. sorghum imports. The announcements made by China reflected "a bit of give and take" on the trade front, ANZ analysts said.
The improvement in sentiment in Asia came on the back of the move higher on Wall Street on Tuesday, with U.S. stocks extending the previous day's gains as investors cheered the release of strong earnings.
S&P 500 earnings are expected to increase 18.6 percent in the quarter compared to one year ago, according to Thomson Reuters I/B/E/S.
Markets in the region had drifted lower on Tuesday as investors digested the release of China growth data for the first quarter, which came in at 6.8 percent — slightly above estimates.
The dollar index, which tracks the greenback against a basket of currencies, extended gains to trade at 89.630 after previously tumbling to a three-week low earlier in the week.
Against the yen, the dollar firmed to trade at 107.27 at 3:36 p.m. HK/SIN after slipping in the last session.
Oil prices extended slight gains seen in the last session. U.S. West Texas Intermediate rose 0.78 percent to trade at $67.04 per barrel and Brent crude futures gained 0.74 percent to trade at $72.11.
In corporate news, miner Rio Tinto announced Pilbara iron ore shipments rose to 80.3 million tons in the first quarter, a 5 percent increase from one year ago. Pilbara shipments this year are expected to remain between 330 and 340 million tons, the company said. Rio Tinto shares closed up 1.11 percent.

                                                                 EUROPE 
cnbc.com

Europe closes in positive territory amid earnings, jump in commodities

Sam Meredith, Ryan Browne, Alexandra Gibbs



European equities finished in the black on Wednesday, as a strong boost in commodity stocks boosted investor sentiment.






FTSE FTSE 7317.34
91.29 1.26% 904181678
DAX DAX 12590.83
5.26 0.04% 85596857
CAC CAC 5380.17
26.63 0.50% 85082355
IBEX 35 --- --- --- --- --- ---
The pan-European STOXX 600 ended the session higher, up 0.29 percent provisionally, while sectors showed a mixed picture by the close.
The FTSE 100 soared 1.26 percent, boosted by commodities and a drop in sterling, while the French CAC 40 popped 0.5 percent and Germany's DAX finished 0.04 percent, capped by weakness in the auto sector.
Markets in the region seemed to receive some late support late from a slightly positive session on Wall Street, where investors were digesting the latest financial results from major firms. Markets in Asia finished higher.

Commodities speed ahead

Basic resources stocks soared ahead of fellow industries on Wednesday, finishing trade up 4.37 percent as a sector. Polymetal International flew to the top of the European benchmark, jumping 12 percent, after reporting a 19 percent rise in year-on-year revenue for the first-quarter. The Russian precious metals mining firm said production of gold equivalent rose 5 percent to 295,000 ounces.
London-listed miners received a boost following Polymetal's news, while metal prices soared with nickel, zinc, and copper posting sharp gains.
Meanwhile, Europe's autos stocks were the worst performers on Wednesday, finishing down 1 percent overall, amid weaker-than-expected sales data. European car registrations fell 5.2 percent, according to data published by the auto industry association ACEA. Nissan, Ford and Fiat Chrysler were reported to have led the losses during the first three months of the year.
Sticking with the sector, Continental AG slumped 4 percent, after the group stated that it had lowered its full-year outlook, revealing that inventory valuation and exchange rate effects would have a negative hit to earnings in the first half of the year.
Vopak surged 6.85 percent after the Dutch oil and chemical storage firm said it was well-placed to significantly improve its core earnings in 2019. The company said this upwardly revised forecast was largely due to its expansion program.
Elsewhere, shares of energy firm Total popped 1.6 percent, after it agreed to buy competitor Direct Energie on Wednesday, in a transaction valued at 1.4 billion euros ($1.7 billion). The move could give the firm more ammunition to compete with French energy provider EDF.
Oil and gas was the second top performing sector, jumping 1.57 percent, with crude futures posting sharp gains, supported by government data that showed U.S. crude stockpiles fell last week and as the market continued to worry about supply disruptions.
Britain's CYBG was the STOXX 600's worst performer, slipping 5 percent, after the group announced that it had increased provisions, for repaying customers who've been mis-sold PPI, by up to £350 million ($498 million).

Economic data

Investor confidence in the global economy appeared to deteriorate slightly after the International Monetary Fund (IMF) said Tuesday that medium-term risks were tilted towards the downside. The Washington D.C.-based institute cited financial vulnerabilities, geopolitical tensions and trade tariffs as potential headwinds over the coming months. However, the IMF left its worldwide growth forecasts unchanged for 2018 and 2019.
On the data front, U.K. and euro zone inflation numbers were cooler than expected. Annual consumer prices rose just 2.5 percent in March, down from 2.7 percent in February, marking a one-year low.
The euro area figure on the other hand came in at 1.3 percent, an increase from the previous month, but lower than estimates.

                                                                     U.S.

cnbc.com

Stocks rise after strong earnings from CSX and United

Fred Imbert, Alexandra Gibbs

Stocks rose slightly on Wednesday as some of the biggest U.S. companies reported strong quarterly results, lifting investor sentiment.
The S&P 500 gained 0.3 percent as a sharp rise in crude prices lifted energy stocks. The Nasdaq composite advanced 0.4 percent. The Dow Jones industrial average hovered around the flatline as IBM losses offset gains in Home Depot and Chevron.
Rail transportation company CSX posted quarterly results that easily beat Wall Street estimates, boosted by a series of cost-cutting measures. CSX shares rose 6.7 percent and were on track for their biggest gain since Jan. 17, when it gained more than 20 percent.
United Airlines also posted better-than-expected results for the first quarter, sending its stock higher by more than 6 percent.
Morgan Stanley reported a record profit and revenue for the first quarter, as its trading business did better than expected. Shares of the investment bank climbed more than 1 percent before trading lower.
Traders work on the floor of the New York Stock Exchange Friday morning on Feb. 9, 2018 in New York City. Spencer Platt | Getty Images
Traders work on the floor of the New York Stock Exchange Friday morning on Feb. 9, 2018 in New York City.
The corporate earnings season has gotten off to a strong start. According to Thomson Reuters I/B/E/S, 79 percent of the S&P 500 companies that had reported through Wednesday morning surpassed earnings expectations. Meanwhile, 83 percent of those companies topped sales estimates.
"These are just slam dunk earnings," said Nick Raich, CEO of The Earnings Scout. "If you want to be bearish on stocks, don't look to earnings."
IBM reported Tuesday earnings and revenue that topped analyst expectations, but investors were left disappointed with the company's forward-looking guidance. Shares of IBM were on track for their worst day since Oct. 24, 2014, when they fell 7.6 percent.
"Beating on the top and bottom line ... just won't cut it for the market," said Tom Essaye, founder of The Sevens Report. "The business metrics need to be strong" and guidance can not be be disappointing.
Elsewhere, oil prices surged 1.8 percent and hit their highest level in more than three years after a big drawdown in U.S. crude stockpiles. The move higher in oil lifted shares of energy companies, as Chevron and Exxon Mobil rose more than 1.5 percent each.
Wednesday's climb in the stock market comes after a strong finish on Tuesday, as the major indexes rallied on strong earnings from companies like UnitedHealth and Netflix.
On the economic data front, the Federal Reserve said in the latest Beige Book the U.S. economic outlook remains positive, but noted that steel prices are rising due to tariffs.