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Apr 19, 2018

CNBC | Asia Europe and U.S. Stock Markets Report, April 19, 2018.


Stocks, oil prices, currencies and earnings in focus

Cheang Ming

Markets in Asia closed higher on Thursday amid improved investor sentiment after U.S. stocks notched gains in the last session. Oil prices also extended gains after settling close to 3 percent higher in the last session.
The Nikkei 225 added 0.15 percent, or 32.98 points, to close at 22,191.18, with the materials sector contributing to gains. The index pared back some gains in the afternoon after touching a 7-week high earlier. Meanwhile, the Topix subindexes for steel and non-ferrous metals were among the best-performing sectors, rising 2.44 percent and 2.91 percent, respectively.
In Seoul, the Kospi firmed after tepid early trade to finish 0.25 percent higher at 2,486.10 amid gains in steelmakers and other manufacturing names. Technology stocks were mixed, with Samsung Electronics, an index heavyweight, up 2.76 percent.


32.98 0.15%
HSI HSI 30708.44
424.19 1.40%
ASX 200 S&P/ASX 200 5881.00 --- UNCH 0%
SHANGHAI Shanghai 3117.55
26.15 0.85%
KOSPI KOSPI Index 2486.10
6.12 0.25%
CNBC 100 CNBC 100 ASIA IDX 8703.09
47.59 0.55%
Greater China markets advanced: Hong Kong's Hang Seng Index rose 1.21 percent by 3:00 p.m. HK/SIN, with the energy sector jumping 3.73 percent ahead of the market close as large cap oil producers gained on the back of a surge in oil prices. Materials stocks jumped 4.26 percent before the market close.
Mainland markets also climbed, with the Shanghai composite adding 0.85 percent to close at 3,117.55 and the Shenzhen composite rising 0.6 percent to 1,814.64.
Over in Sydney, the S&P/ASX 200 edged higher by 0.33 percent to end at 5,881. Materials stocks rose after overnight gains in the metals markets on Russia sanction worries, with mining major Rio Tinto jumping 3.12 percent.
The move higher in Asia followed the stronger lead from Wall Street, where robust earnings continued to buoy markets. Both the S&P 500 and the Nasdaq composite notched slim gains on Wednesday, although the Dow Jones industrial average slipped, weighed down by a decline in IBM shares.
Some 79 percent of S&P 500 companies that had reported as of Wednesday morning had topped expectations, according to Thomson Reuters I/B/E/S.
Investors also took a meeting between U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe in their stride after the two leaders pledged to begin trade talks.
"The [Japanese] market welcomed the atmosphere President Trump and Prime Minister Abe made in the joint press conference this morning," said Masayuki Kubota, chief strategist at Rakuten Securities, adding that Japanese exporters were "sure to benefit" from any free trade agreements between the countries.
Oil prices extended gains after rising to their strongest levels since late 2014 in the last session on data that showed a drop in U.S. crude inventories. U.S. West Texas Intermediate crude futures gained 0.39 percent to trade at $68.74 per barrel and Brent crude futures advanced 0.49 percent to $73.84.
The gains also came after a Reuters report, citing sources, said Saudi Arabia would be pleased with oil prices at a range between $80 and $100 per barrel.
The dollar index, which tracks the greenback against a basket of currencies, firmed slightly to trade at 89.686. Against the yen, the dollar extended overnight gains to trade at 107.40 at 2:41 p.m. HK/SIN.
Meanwhile, the British pound was on the back foot after slipping in the last session on the back of March U.K. inflation coming in at a one-year low. The currency last traded at $1.4198 after touching a post-Brexit high earlier this week.
While cooling inflation pressure in March "will not be enough to dissuade the Bank of England from raising rates at the May meeting," a continued fall will "question the necessity for further rate increases in November," Elias Haddad, senior currency strategist at Commonwealth Bank of Australia, said in a note.
Among individual movers, miner BHP closed up 2.83 percent after announcing an 8 percent increase in third-quarter iron ore production, although it also slightly cut fiscal year 2018 guidance for iron ore.
Elsewhere, shares of Korean Air Line fell 2.91 percent amid Reuters headlines that police had raided the company's offices as part of an investigation into Chairman Cho Yang-ho's daughter.
Meanwhile, telecommunications equipment maker ZTE said it would postpone reporting first-quarter earnings, originally due on Thursday, pending a review on the effect a U.S. ban would have on the company, in a filing to the Hong Kong exchange.
— CNBC's Fred Imbert contributed to this report.


Europe markets close mixed amid earnings; oil prices hit multi-year highs

Justina Crabtree, Sam Meredith

European markets closed mixed Thursday afternoon as investors reacted to fresh earnings and soaring oil prices.


FTSE FTSE 7328.92
11.58 0.16% 812800251
DAX DAX 12567.42
-23.41 -0.19% 72854113
CAC CAC 5391.64
11.47 0.21% 76385722
IBEX 35 --- --- --- --- --- ---
The pan-European Stoxx 600 closed at 0, with major bourses and business sectors pointing in different directions.
Europe's household goods led the losses, tumbling throughout the day to close 1.9 percent lower. Unilever was among the sector's worst performers after the Anglo-Dutch consumer goods giant reported sales figures that were largely in line with expectations during the first three months of the year. The maker of Dove soap also said it remained confident shareholders would support its decision to change the corporate structure of the firm. Shares of Unilever closed roughly 2.2 percent in the red.
Meanwhile, media stocks rallied during the day's trade, closing 1.7 percent higher. France's Publicis Group posted better-than-expected underlying sales growth in the first-quarter on Thursday, supported by a bounce in North American activities. Its shares closed 7.4 percent to the upside, topping the European benchmark.
Britain's Weir Group was the third best performing stock, with its shares closing 6.2 percent higher. The firm, which makes pumps and valves for mining and energy industries, announced it would try to purchase U.S.-based ESCO Corp for an equity value of over $1 billion.
Irish drug-maker Shire performed well following news that the firm's board had rejected a takeover bid from Japanese pharma company Takeda. Talks between the two companies remain ongoing. Shire's shares closed up 5.9 percent, though they had traded even higher earlier on in the afternoon.
Swiss engineering firm ABB also saw a strong day's trading, with shares closing 4.6 percent in the green. The company released its first quarter earnings report Thursday which revealed a better-than-expected first quarter net profit of $572 million, beating forecasts of $562 million in a Reuters poll of analysts.

U.S. stocks dragged lower by tech

U.S. stocks traded lower after a major Asian chip-maker delivered a disappointing forecast that dragged the technology sector lower. Investors also fretted over rising interest rates.
The Dow Jones industrial average fell 72 points, with Apple among the worst-performing stocks in the index. The S&P 500 declined 0.3 percent with technology falling 1.1 percent. The Nasdaq composite dropped 0.7 percent.
Oil prices extended gains Thursday, rising to their highest levels in more than three years. This came as U.S. crude stockpiles continue to fall and gasoline demand hits a record.


Stocks close lower as Apple falls, rates rise

Fred Imbert, Alexandra Gibbs

U.S. stocks fell on Thursday after a major Asian chipmaker delivered a disappointing forecast which dragged the technology sector lower. Investors also fretted over rising interest rates.
The Dow Jones industrial average closed 83.18 points lower at 24,664.86, with Apple among the worst-performing stocks in the index. The S&P 500 declined 0.6 percent to 2,693.13 with technology and consumer staples falling 1.1 percent and 3.1 percent, respectively. The Nasdaq composite dropped 0.8 percent to 7,238.06.
The major indexes pared losses in the last hour of trading after Bloomberg News reported that Deputy Attorney General Rod Rosenstein told President Donald Trump last week he is not the target of an investigation by special counsel Robert Mueller. Trump has told associates he no longer wants to fire Rosenstein now, the report said.
Taiwan Semiconductor Manufacturing (TMSC) said Thursday it expects second-quarter revenue to range between $7.8 billion and $7.9 billion, well below a Wall Street consensus estimate of $8.8 billion.
The announcement weighed on the entire technology sector. Shares of Apple fell 2.8 percent, while Nvidia, Micron and Advanced Micro Devices all declined at least 2.4 percent. The VanEck Vectors Semiconductor ETF (SMH) dropped 4.5 percent in its worst day since Dec. 1, 2016.
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, January 31, 2018. Brendan McDermid | Reuters
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, January 31, 2018.
Wall Street also kept an eye on rising interest rates, as the 10-year Treasury note yield broke above 2.9 percent. The 10-year traded around these levels earlier this year, sparking a correction in the U.S. stock market as investors feared the inflation was rising faster than expected. The move higher on the benchmark U.S. yield came as the two-year yield traded near highest levels in nearly a decade.
"The market is looking tired as yields may soon be a constraining factor that could overshadow good earnings," said Peter Cardillo, chief market economist at Spartan Capital Securities.
Thursday's dip came after the S&P 500 and Nasdaq posted slight gains on Wednesday, boosted by strong corporate earnings from United Airlines and CSX.
The corporate earnings season continued on Thursday, as Procter & Gamble, Bank of New York Mellon and Blackstone all reported better-than-expected earnings. Procter & Gamble, however, dropped 3.3 percent.
Earnings have been strong thus far. According to Thomson Reuters I/B/E/S, 77 percent of the S&P 500 companies that had reported through Thursday morning surpassed earnings expectations. Meanwhile, 75 percent of those companies topped sales estimates.
"We've been fairly happy with the results thus far," said Shannon Saccocia, chief investment strategist at Boston Private. But noted investors are "looking for great results as they search for the next catalyst to take us higher."
Elsewhere in corporate news, Amazon CEO Jeff Bezos revealed the company has 100 million Prime members in his annual letter to shareholders. The stock rose nearly 2 percent.
In data news, weekly jobless claims totaled 232,000, slightly more than expected. The Philadelphia Fed index hit 23.2 for April, higher than a Reuters estimate of 20.

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