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May 14, 2018

Asia, Europe and U.S. Stock Markets Report - May 14,2018 I CNBC Markets.


Trade, stocks, oil and currencies on the agenda

Cheang Ming

Most Asian markets closed higher on Monday, with Malaysian stocks recovering after dropping at the open as markets reopened following an election. Meanwhile, oil prices were slightly lower, paring more gains after touching multi-year highs last week.
The FTSE Bursa Malaysia KLCI recovered after recording early losses of more than 2 percent to gain 0.68 percent by 2:42 p.m. HK/SIN as investors digested last week's surprise election victory by an opposition alliance. Meanwhile, the Malaysian ringgit traded at 3.9470 to the dollar at 2:40 p.m. HK/SIN after earlier sliding by almost 1 percent.
Still, shares of Malaysian firms linked to the Barisan Nasional coalition, which lost the election, declined, but pared sharper falls seen earlier: CIMB Group dropped 8.26 percent and AirAsia Group was lower by 4.59 percent by 2:42 p.m. HK/SIN.
Construction stocks also traded lower following the announcement that infrastructure projects struck under the old administration would be re-looked.


107.38 0.47%
HSI HSI 31541.08
419.02 1.35%
ASX 200 S&P/ASX 200 6135.30 --- UNCH 0%
SHANGHAI Shanghai 3174.14
10.87 0.34%
KOSPI KOSPI Index 2476.11
-1.60 -0.06%
CNBC 100 CNBC 100 ASIA IDX 8782.12
30.05 0.34%
Stabilization in the stock market came as the new administration, led by new prime minister Mahathir Mohamad, named three ministers to the cabinet over the weekend.
"If you look at the line-up of the cabinet, you have some very capable people ... which is very important for business," emerging markets investor Mark Mobius told CNBC's "Street Signs." Still, he cautioned against investors getting their hopes up "too high" given the opposition's presence in parliament.
In Tokyo, the Nikkei 225 firmed 0.47 percent, or 107.38 points, to close at 22,865.86 and the broader Topix edged up by 0.61 percent. The real estate subindex advanced 3.1 percent, while mining stocks finished the session lower.
Elsewhere, the Kospi erased early gains to close down 0.06 percent at 2,476.11, with heavyweight Samsung Electronics declining 2.34 percent and weighing on the index. Other technology sector stocks were mixed, with LG Display closing flat, while steelmakers mostly advanced.
Hong Kong's Hang Seng Index jumped 1.04 percent by 2:45 p.m. HK/SIN while mainland markets closed mixed, with the Shanghai composite rising 0.34 percent to 3,174.14 while the Shenzhen composite shed 0.1 percent to close at 1,823.25. The blue-chip CSI 300 index finished the day higher by 0.94 percent.
Down Under, the S&P/ASX 200 drifted higher by 0.31 percent to close at 6,135.30 as the energy and materials sectors led gains on the index.
Meanwhile, MSCI's broad index of shares in Asia Pacific excluding Japan rose 0.42 percent in Asia afternoon trade.
That followed the mostly higher close stateside on Friday amid gains in energy shares — following President Donald Trump's announcement that he would withdraw the U.S. from the Iran nuclear deal.
Oil prices extended losses on Monday after slipping in the last session, but still relatively close to more than three-year highs touched recently. Brent crude futures were off by 0.45 percent at $76.77 per barrel and U.S. West Texas Intermediate slipped 0.34 percent to trade at $70.46.

US-China trade back in the spotlight

Meanwhile, trade was back into focus after Trump said in a Sunday tweet that he was working with Chinese President Xi Jinping to give Chinese telecommunications equipment maker ZTE "a way to get back into business, fast."
The U.S. government had imposed a ban on U.S. companies from supplying ZTE with technology after the Chinese company was found to have illegally shipped equipment to Iran.
With the second leg of U.S.-China trade negotiations expected in the week ahead, the move by Trump was seen by some analysts as a concession from the U.S. side.
"While some might be unsettled at prospects of trade confrontation, we would argue that the U.S. is acting as a rational actor ... And rational U.S. behavior would almost certainly mean that the administration would not choose a mutually destructive trade outcome," Chang Wei Liang, a strategist at Mizuho Bank, said in a note.
In corporate news, Commonwealth Bank of Australia's chief financial officer, Rob Jesudason, has resigned with immediate effect, with Alan Docherty taking on the position of Acting CFO Monday, the lender said. CBA is one of several banks part of an inquiry into the financial sector in Australia. Shares reversed early losses to track higher by 0.38 percent.
Elsewhere, Hon Hai Precision Industry popped 4.71 percent on Monday. That came as the company filed to apply for a Shanghai initial public offering for its Foxconn Industrial Internet unit, Reuters reported.
In currencies, the dollar index, which tracks the greenback against a basket of currencies, was softer at 92.431, after trading as high as the 93.4 handle last week. Against the yen, the dollar edged up to trade at 109.43 at 2:40 p.m. HK/SIN.
CNBC's Fred Imbert contributed to this report.

Italy political uncertainty eases, China US trade

Justina Crabtree, Silvia Amaro

European stocks closed mixed Monday afternoon as investors focused on Italian politics, trade relations between the U.S. and China, and a dip in oil prices.


FTSE FTSE 7710.98
-13.57 -0.18% 773092448
DAX DAX 12977.71
-23.53 -0.18% 79554635
CAC CAC 5540.68
-1.26 -0.02% 61572929
IBEX 35 --- --- --- --- --- ---
The pan-European Stoxx 600 closed down 0.05 percent. While major bourses and most sectors were in the red, strong performances from the health care and travel sectors boosted the broader index.
Financial services stocks fell the furthest on Monday, closing 1.1 percent lower. Close behind were telecoms, 0.9 percent lower. The U.K.'s BT was among the poorest performing companies within the sector, down 2.4 percent. Last week the firm announced that it would cut 13,000 jobs in the next three years.
Meanwhile, travel and leisure surged in afternoon trade to close up 1.4 percent. The sector was led by gambling firms Paddy Power Betfair and William Hill, boosted by news of a U.S. Supreme Court ruling that would allow for states to legalize sports betting. The firms closed up 11.9 percent and 10.7 percent respectively.
Health care was one of the few other sectors in positive territory, closing up 1 percent. It recovered from last week's slump after President Donald Trump unveiled plans to lower prescription drug prices.
Oil and gas stocks recovered from negative trade earlier on in the day, climbing in the afternoon session to close 0.5 percent higher. In fact, Brent crude hit a new 3-1/2 year high on Monday afternoon, despite push back in Europe and Asia against U.S. sanctions on crude exporter Iran, as well as rising U.S. drilling. Brent crude was trading up 85 cents, or 1.1 percent, at $77.97 a barrel by 3:20 p.m. London time.
Iwg topped the European benchmark, up by 23 percent after three different companies signaled an interest in buying the firm.
The Portuguese energy firm EDP also rose 9 percent by the end of Monday's trade after the Chinese group Three Gorges presented a takeover bid.
ABN Amro fell to the bottom of the index, closing 6 percent lower as the Dutch bank's first-quarter profits took a hit from larger-than-expected loan impairments.

Is the recent volatility seen in EM FX the start of ...

Not a Scientific Survey. Results may not total 100% due to rounding.
In Europe, the focus was on Italy where the two anti-establishment parties could form the next government. The left-wing Five Star Movement (M5S) and the right-wing Lega met the Italian president Sergio Mattarella Monday afternoon, potentially breaking months of political deadlock. However, as reported by Reuters, the head of Five Star Movement, Luigi Di Maio, asked the president for "a few more days" in order to reach an agreement on who will head the new coalition.


Dow posts 8-day winning streak as US-China trade concerns abate

Fred Imbert, Sam Meredith

Stocks closed higher on Monday amid hopes of a potential breakthrough in trade tensions between the U.S. and China, the world's two largest economies.
The Dow Jones industrial average rose 68.24 points to 24,899.41, with UnitedHealth and Walmart as the best-performing stocks in the index. The 30-stock index also extended its winning streak to eight straight days. The S&P 500 gained 0.1 percent to close at 2,730.13, with energy, health care and materials outperforming. The Nasdaq composite advanced 0.1 percent and finished at 7,411.32.
President Donald Trump pledged Sunday to help Chinese technology firm ZTE Corp to "get back into business, fast" after a U.S. ban had significantly hampered the Asian company.

"It's being perceived as healthy," said Daniel Deming, managing director at KKM Financial. "The market sees it as extending an olive branch."
Trump's tweet on Sunday came ahead of the second round of trade talks between the U.S. and China this week. Trade officials are seeking to find a way to resolve an ongoing trade dispute, although Beijing has already said it will not change its current position over the coming days.
Traders work on the floor of the New York Stock Exchange (NYSE) in New York. Brendan McDermid | Reuters
Traders work on the floor of the New York Stock Exchange (NYSE) in New York.
"For the President to become suddenly concerned about Chinese jobs is quite a volte-face," said Jonathan Fenby, chairman of China research at TS Lombard. "The most probable explanation can only be that he wants to butter up Xi with a concession on the trade front to get China's help to make [North Korean leader] Kim Jong-un amenable to a deal at the Singapore summit, in an application of linkage he advanced last year of Korea and China trade issues."
Trump and Kim are scheduled to meet in Singapore on June 12. The encounter between the two leaders would mark the first-ever meeting between a U.S. president and a North Korean leader.
Optical component makers saw their stocks jump on Trump's ZTE news, with Oclaro, Lumentum and Finisar rising 2.9 percent, 2.2 percent and 1 percent, respectively. Acacia Communications also surged 8.7 percent.
Chip stocks rose Monday after a report said Chinese regulators will restart a review of the proposed acquisition of NXP Semiconductors by Qualcomm. NXP shares jumped 11.9 percent on the news, while Qualcomm's stock gained 2.7 percent. The Vaneck Vectors Semiconductor ETF (SMH) 1.7 percent on the news.
Still, Commerce Secretary Wilbur Ross said the gap between the U.S. and China "remains wide." He also said: "Before landing in China we sent them an extremely detailed list of our needs, and they responded with a similarly detailed but as you can imagine quite different list of their proposals."
Equities came into the session riding last week's strong gains. The Dow posted its biggest weekly gain since March last week while the S&P 500 and Nasdaq climbed 2.4 percent and 2.7 percent, respectively.
In corporate news Monday, Xerox fell more than 4 percent after the company abandoned a $6.1 billion deal with Japanese firm Fujifilm as part of a settlement between Carl Icahn and Darwin Deason.


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