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May 10, 2018

Asia, Europe an U.S. Stock Markets Report - May 10, 2018. | CNBC


Oil prices, stocks, currencies and earnings in focus

Cheang Ming

Asian markets closed with moderate gains on Thursday as oil prices traded higher after touching fresh multi-year highs.
The Nikkei 225 edged higher by 0.39 percent, or 88.30 points, to close at 22,497.18. The Topix was up 0.27 percent by the end of the day, with gains led by its mining and oil subindexes, up 2.93 percent and 1.97 percent, respectively.
Moderate gains were similarly seen in South Korea as the benchmark Kospi rose 0.83 percent to 2,464.16.


88.30 0.39%
HSI HSI 30809.22
273.08 0.89%
ASX 200 S&P/ASX 200 6118.70 --- UNCH 0%
SHANGHAI Shanghai 3175.17
16.02 0.51%
KOSPI KOSPI Index 2464.16 --- UNCH 0%
CNBC 100 CNBC 100 ASIA IDX 8664.27
67.20 0.78%
Greater China markets were in positive territory, with Hong Kong's Hang Seng Index advancing 0.8 percent by 3:13 p.m. HK/SIN. Energy stocks notched significant gains, with CNOOC jumping 2.96 percent and contributing to the sector's 2.46 percent overall gain before the market close.
On the mainland, the Shanghai composite edged up by 0.51 percent to end at 3,175.17 and the smaller Shenzhen composite advanced 0.52 percent to 1,844.04.
Down Under, the S&P/ASX 200 tacked on 0.18 percent to close at 6,118.70 as oil producers contributed to the index's gains on the back of oil's climb. Woodside Petroleum was up 5.1 on the day.
MSCI's broad index of shares in Asia Pacific excluding Japan was up 0.67 percent in Asia afternoon trade.
Malaysia's stock exchange will be shut on Thursday and Friday following the country's general election.
The country's former leader, Mahathir Mohamad, led an alliance of opposition parties to an unexpected victory at the general election , upsetting the ruling Barisan Nasional coalition. The iShares MSCI Malaysia ETF dropped 6.03 percent overnight in reaction to the news, with uncertainty likely a focus for markets when they reopen.

Oil adds to gains 

Oil prices continued their move higher after touching multiyear highs overnight as investors digested the impact renewed U.S. sanctions on Iran would have on oil supplies.
President Donald Trump had announced Tuesday that the U.S. would withdraw from the Iran nuclear deal. Washington will probably renew sanctions on the OPEC member after 180 days, unless some other deal is reached, Reuters reported.
U.S. crude futures rose 0.69 percent to $71.63 per barrel. Brent crude futures advanced 0.6 percent to trade at $77.67, after rising to a high of $77.89 earlier — its strongest levels since the end of 2014. Both contracts had settled more than 3 percent higher in the last session.
The gains also came on the back of a larger-than-expected decline in U.S. crude inventories.
It would not be surprising if oil prices continued to rise, James Norman, president of QS Investors, told CNBC. He said that a downside risk to prices, however, is if economic data begin to point to signs of slowing.
The move higher in Asian markets also came after U.S. stock indexes gained on Wednesday, with energy shares advancing on the move higher in oil prices overnight.
Also of note, the yield on the 10-year U.S. Treasury note crossed the 3 percent level on Wednesday. The 10-year yield pulled back slightly on Thursday, standing at 2.98 percent in Asia afternoon trade.
In corporate news, Hong Kong tycoon Li Ka-shing stepped down as chairman of CK Hutchison Holdings on Thursday as the company held its annual general meeting. Li had announced earlier this year his son, Victor Li, would take over the position.
Elsewhere, the head of South Korea's antitrust watchdog told the media that Samsung Group's ownership structure was "not sustainable," Reuters said. Samsung Electronics closed up 1.38 percent despite the comments


European markets close lower Thursday after BOE rate decision

Alexandra Gibbs, Sam Meredith, David Reid

European stock markets endured mixed fortunes Thursday, as investors reacted to a monetary policy meeting by the U.K.'s central bank.


FTSE FTSE 7700.97
38.45 0.50% 905952738
DAX DAX 13022.87
79.81 0.62% 74386962
CAC CAC 5545.95
11.32 0.21% 50487434
IBEX 35 --- --- --- --- --- ---
The pan-European Stoxx 600 ended provisionally 0.12 percent lower than its previous closing price, with major bourses and sectors pointing in opposite directions.
Europe's telecoms stocks were among those to lead the losses, down 0.94 percent amid earnings news. BT posted weaker-than-anticipated figures over the first three months of the year and announced plans to cut 13,000 managerial and back-office jobs. Britain's largest telecoms group also said it would leave its London headquarters in its latest attempt to regroup after an accounting scandal. Shares of the company were 7.5 percent lower for the day.
Meanwhile, media stocks rose 0.3 percent on average after Britain's free-to-air commercial broadcaster, ITV, projected net advertising revenue would jump approximately 15 percent in June as viewers tune in for the soccer World Cup. The London-listed stock also reported earnings largely in line with expectations on Thursday. Shares of ITV were up 5.8 percent.
In banking, RBS rallied nearly 4 percent after it agreed to pay a smaller-than-anticipated $4.9 billion to resolve a long-running investigation into its sale of mortgage-backed securities.
Elsewhere, Randgold Resources shares slumped after the gold producer reported a 24 percent quarter-on-quarter fall in profit. The company cited rising costs and disappointing production levels over the first three months of the year. Its shares were off 6.8 percent on the news.


The yield on Italian government 10-year bonds rose to a seven-week high Thursday, while stocks sold off, following news that former Prime Minister Silvio Berlusconi will not stand in the way of a new coalition government.
The anti-establishment Five Star (M5S) and right-wing Lega parties are said to be closing in on an agreement to form a ruling coalition for the euro zone's third-largest economy.
Benchmark 10-year Italian yields jumped to 1.94 percent in early trading and the spread between Italian debt and its German counterpart stretched to its widest in six weeks. The FTSE MIB equity index in Milan closed around 1 percent lower.


Politics has been a major focus over the course of this week, from an election result in Asia and the easing of geopolitical tensions to the news that President Donald Trump would be pulling the U.S. out of the Iran nuclear accord.
After the news broke about Iran on Tuesday, oil prices have been on the rise but gains were checked on Thursday, with Brent hovering around $77.01 per barrel and U.S. crude fluctuating around $71.04. Following the U.S. announcement, allies in Europe have been trying to salvage the Iran deal, and preserve their trade relations with the Middle Eastern nation.
Back in Europe, the Bank of England (BOE)held interest rates steady, after a first-quarter slowdown in economic growth tarnished the case for higher borrowing costs. The decision marked a sharp contrast to widespread expectations just a few weeks ago, as Threadneedle Street voted 7-2 to keep rates on hold at 0.5 percent.
—CNBC's Joumanna Bercetche contributed to this report


Dow rallies nearly 200 points, notches 6-day winning streak

Fred Imbert, Alexandra Gibbs

The Dow Jones industrial average rose sharply on Thursday, posting its sixth straight day of gains, following the release of weaker-than-expected U.S. inflation data.
Exxon Mobil and UnitedHealth were the best-performing stocks in the 30- stock index, which closed positive for 2018. The Dow rose 196.99 points to close at 24,739.53.
Meanwhile, the S&P 500 gained 0.9 percent to 2,723.07, with utilities and telecom both rising more than 1 percent. The Nasdaq composite advanced 0.9 percent to close at 7,404.97 as Apple reached an all-time high.
Technology shares also aided the broader indexes. The sector rose about 1.3 percent, as shares of Apple, Facebook, Amazon and Google-parent Alphabet all closed higher.
"Inflation is gradually rising, but it's less likely to feed into the volatility we've seen recently," said Mike Bailey, director of research at FBB Capital Partners. "I also think investors are looking at valuations and realize they are pretty reasonable."
The Labor Department said before the open its consumer price index rose 0.2 percent in April, with economists polled by Reuters expecting a 0.3 percent bump. The lighter-than-forecast number eased concerns about the Federal Reserve tightening monetary policy at a faster rate than the market is expecting.
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., November 30, 2017. Brendan McDermid | Reuters
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., November 30, 2017.
"This was a far cry from the great leap many inflation alarmists have been fearing. We're still well within the Fed's 2% comfort level, so some will say we're right where we need to be," said Mike Loewengart, vice president of investment strategy at E-Trade, in an email. "Within the context of a strong economy that has been gaining momentum, this type of modest inflation growth is likely to be a crowd pleaser."
As of Thursday, market expectations for rate hikes in June and September are 100 percent and 76 percent, respectively, according to the CME Group's FedWatch tool. This is in line with the Fed's interest-rate projections released in March, when the central bank last raised rates.
The Labor Department also reported Thursday that weekly jobless claims remained near a 48-year low at 211,000.
Treasury yields slipped from multiyear highs following the data releases. The 10-year note yield fell to 2.966 percent after breaking above 3 percent on Wednesday.
The moves Thursday after U.S. stocks posted strong gains in the previous session, boosted by a strong uptick in crude futures. Oil prices have been on the rise since Tuesday, when the U.S. announced that it would be withdrawing from the Iran nuclear accord set in place in 2015.
Energy stocks have been rising along with oil. The sector is up more than 9 percent in the past month. But Derek Green, wealth adviser at Titus Wealth Management, said he would "fade" the rally at this point. "We're in the seasonal period where energy starts to peak," he said. "Moving forward, you want to get more defensive as we get closer to the midterm elections."
In corporate news, Booking Holdings dropped more than 4.5 percent after giving weaker-than-expected quarterly guidance. The company reported better-than-forecast earnings and revenue for the previous quarter, however.

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