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May 8, 2018

Asia, Europe and U.S. Stock Markets Reort on May 8, 2018.| CNBC


Oil prices, stocks, dollar and China data in focus

Cheang Ming

Asian markets closed higher on Tuesday, with oil prices tracking lower following President Donald Trump's announcement that he would make a decision on the Iran nuclear deal on Tuesday during U.S. hours.
The Nikkei 225 reversed early weakness to close higher by 0.18 percent, or 41.53 points, at 22,508.69 and the Topix edged up by 0.37 percent, with 25 of its 33 subindexes closing higher. Financials and technology rose, while the mining and oil sectors fell 1.41 percent and 1.33 percent, respectively.
Across the Korean Strait, the benchmark Kospi slipped 0.47 percent to close at 2,449.81.
Strength in the technology sector stateside carried over to the Asian trading day, buoying the broader index, with heavyweight Samsung Electronics rising 1.35 percent and chipmaker SK Hynix climbing 0.6 percent.

41.53 0.18%
HSI HSI 30402.81
408.55 1.36%
ASX 200 S&P/ASX 200 6091.90
7.40 0.12%
SHANGHAI Shanghai 3161.60
24.95 0.80%
KOSPI KOSPI Index 2449.81
-11.57 -0.47%
CNBC 100 CNBC 100 ASIA IDX 8621.66
64.37 0.75%
Over in Hong Kong, the Hang Seng Index advanced 1.4 percent by 3:00 p.m. HK/SIN amid broad-based gains. The technology and heavily weighted financials sectors were among the best-performing before the market close, with Tencent last higher by 3.16 percent at 3:00 p.m. HK/SIN.
Mainland markets also saw convincing gains, with the Shanghai composite closing higher by 0.8 percent at 3,161.60 and the Shenzhen composite edging up by 0.77 percent to 1,836.22.
Elsewhere, the S&P/ASX 200 added 0.12 percent to finish the day at 6,091.90, as the 0.82 percent gain in the financials sector supported the index's overall gains despite declines in energy and materials.

Iran nuclear deal in focus

Oil prices declined on Tuesday following President Donald Trump's Monday tweet that he would announce his decision on the Iran nuclear deal on Tuesday at 2 p.m. ET.
U.S. West Texas Intermediate crude futures declined 0.75 percent to trade at $70.20 per barrel, after earlier falling below the $70 level that it surpassed on Monday for the first time since end-2014. Brent crude futures, meanwhile, lost 0.64 percent to trade at $75.68.
The fall in prices was akin to buy the rumor, "sell the news kind of behavior" for markets, which had initially expected a statement from Trump only later in the week, Nicolas Sopel, a strategist at RHB Research Institute Singapore, told CNBC's "Street Signs."
Trump, who had been due to make a decision by May 12 on the agreement, has criticized the deal, taking issue with so-called "sunset clauses." The 2015 accord has seen international sanctions on Iran lifted in exchange for the country curbing its nuclear program.
Oil had initially settled higher on Monday as markets weighed the potential impact of renewed U.S. sanctions.
"There's much to play here. We'd reckon there's still several dollars in the price based on a presumption the U.S. will pull out. So if Trump says he's staying, we could swiftly see another $2 to $3 off crude prices," Ray Attrill, head of foreign exchange strategy at National Australia Bank, said in a morning note.
Gains in the region tracked the firmer close on Wall Street on Monday, with technology shares recording a third consecutive day of gains. Still, U.S. stocks finished the day off their intraday highs on the back of Trump's tweet.
In currencies, the dollar index, which tracks the dollar against a basket of currencies, were steady at 92.705 at 2:50 p.m. HK/SIN after rising as high as 92.974 on Monday — its strongest level since December. Against the yen, the greenback slipped to trade at 108.90.
The Australian dollar, which dipped below $0.75 in the morning on the back of weak retail sales data, recovered slightly to trade at $0.7513.
On the economic front, investors digested China April trade data, which topped expectations. China reported imports rose 21.5 percent on year and exports increased by 12.9 percent. Both of those figures beat Reuters forecasts of 16 percent import growth and 6.3 percent export growth.


European markets lower ahead of Trump’s decision on Iran deal

Alexandra Gibbs, Sam Meredith, David Reid

European markets closed mixed Tuesday, as investors eagerly awaited critical news surrounding the Iran nuclear accord.

FTSE FTSE 7565.75
-1.39 -0.02% 903948336
DAX DAX 12912.21
-35.93 -0.28% 98544191
CAC CAC 5521.93
-9.49 -0.17% 72385975
IBEX 35 --- --- --- --- --- ---
The pan-European Stoxx 600 closed provisionally around 0.1 percent higher Tuesday, with most major European bourses in negative territory.
The FTSE 100 index closed almost unchanged, Germany's Dax lost 0.29 percent of its aggregate value, while the French CAC-40 closed lower by 0.21 percent.
Italian equity investors were the big losers as uncertainty over the country's future government loomed. The FTSE MIB in Milan closed down by 1.67 percent.
On a stock basis, Shire finished near the top of the European benchmark, gaining almost 5 percent. Japan's Takeda Pharmaceutical has struck a deal to buy the Irish drugmaker for £46 billion. The agreement ends a takeover battle that had seen Takeda make five offers for UK-listed Shire since late March.
Fellow drugmaker Lundbeck surged to the top of the European benchmark after it reported better-than-expected earnings in the first three months of 2018. The Danish company said sales of its schizophrenia and depression drugs helped offset the generic competition of its older products. Shares were more than 8 percent higher by the end of trade.
Meanwhile, Europe's travel and leisure stocks were one of the few sectoral gainers, up 0.3 percent amid earnings news. British bookmaker William Hill was a decent performer after it posted its latest figures for the first 17 weeks of the year. The firm said Roma's shock defeat of Barcelona and an uptick in U.S. March Madness college basketball betting helped drive a 12 percent rise in profits. Its shares finished up 0.61 percent on the news.
Danish hearing aid maker William Demant tumbled to the bottom of the European index after a first-quarter growth warning. It said lower demand by the U.K.'s National Health Service was a drag on overall growth over the first three months of the year. Shares of the Copenhagen-listed firm finished nearly 10 percent lower on the news.

Iran nuclear deal

After oil prices climbed to fresh highs Monday, the energy market pared back its gains on Tuesday as political news curbed sentiment. On Tuesday afternoon, crude futures fell into the red with U.S. WTI and Brent both dropping more than $3 per barrel to hit session lows.
Prices were under pressure as the market grew nervous over an announcement by the U.S. administration, concerning the Iran nuclear deal.
President Donald Trump is expected to make a statement on the future of an international nuclear agreement. In the past, the incumbent has frequently threatened to withdraw the U.S. from the deal — which lifted sanctions on Iran in return for the country to pull back on its nuclear ambitions — unless nations in Europe that took part in the accord, amend what Trump sees as weak points of the deal.
Despite Trump's threats to withdraw, President Hassan Rouhani stated that Iran had a plan to counter any move made by Trump when it comes to the 2015 agreement; Reuters reported. The U.S. leader is widely expected to pull out from the agreement, however Rouhani said Sunday, that this would be "making a mistake."
Finally, Comcast is looking into a $60 billion all-cash bid to surpass Walt Disney on its deal to acquire the majority of Twenty-First Century Fox's assets — if the U.S. government goes on to approve the acquisition of Time Warner by AT&T, people familiar with the matter have revealed. The U.S. broadcaster has also got plans to acquire the whole of Britain's broadcast firm, Sky, as part of an improved all-cash bid.
—CNBC's Alex Sherman contributed to this report
Disclosure: Comcast is the owner of NBCUniversal, parent company of CNBC and


Stocks close little changed after Trump decides to pull US from Iran nuclear deal

Fred Imbert, Alexandra Gibbs

Stocks closed little changed on Tuesday after President Donald Trump announced he was withdrawing the U.S. from the Iran nuclear deal signed three years ago.
The Dow Jones industrial average finished about 3 points higher, with J.P. Morgan Chase as the best-performing stock in the index. The S&P 500 closed just below breakeven as utilities fell 2.5 percent. The Nasdaq composite eked out a small gain.
Back in 2015, the Obama administration and Iran signed a deal to defer sanctions on Iranian oil exports, while Iran curbed its nuclear program. On Tuesday, Trump said the U.S. was pulling out of that deal and restoring sanctions.
Crude settled 2.4 percent lower at $69.06 per barrel and briefly fell more than 3 percent.
"If financials weren't performing well today, we'd be looking at a much darker picture," said JJ Kinahan, chief market strategist at TD Ameritrade. "If you look at the rest of the board, things are kind of pink."
The finanicals sector was one of four that closed higher on Tuesday, climbing 0.7 percent. Industrials also rose, as shares of defense companies jumped. The iShares U.S. Aerospace & Defense ETF (ITA) rose 1.5 percent, its best day since March 26, when it surged 2.6 percent.
Quincy Krosby, chief market strategist at Prudential Financial, said the market will view the announcement as preview on " how he deals with other foreign policy matters such as North Korea."
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Monday, April 23, 2018. Michael Nagle | Bloomberg | Getty Images
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Monday, April 23, 2018.
Trump had threatened numerous times to withdraw the U.S. from the Iran deal unless allies in Europe amend what he sees as shortcomings of the agreement.
In spite of the Trump's threats to pull out, Iran President Hassan Rouhani has stated that Iran had a plan to counter any move made by Trump when it comes to the deal.
"Allowing Iran to produce nuclear fuel again would further boost the dollar and lower US Treasury yields," said Komal Sri-Kumar, president of Sri-Kumar Global Strategies, in an email. "The US withdrawal from Iran the treaty would be another step in isolating the US from rest of the world."
U.S. Treasury yields rose slightly on Tuesday, while the dollar climbed 0.4 percent against a basket of currencies.
Equities closed off their session highs on Monday after Trump tweeted the announcement was coming. The major averages were propelled to their highs by energy stocks, which rose more than 2 percent on Monday before closing slightly higher.
In corporate news on Tuesday, sources told CNBC that NBCUniversal-parent Comcast is planning an all-cash bid for most of 21-Century Fox's assets if the U.S. government approves AT&T's purchase of Time Warner. Comcast shares dropped 5.5 percent, while Fox slipped 0.1 percent.
In central bank news, Fed Chair Jerome Powell delivered remarks in Zurich Tuesday. At the Swiss National Bank and International Monetary Fund's High Level Conference, the chair of the U.S. central bank said that the Fed's interest rate hikes may not end up having as great of a risk on emerging market economies and stock markets as many had initially thought.
Powell added that the central bank would however continue to communicate its policies clearly, to avoid market disruptions.
—CNBC's Tom DiChristopher contributed to this report.