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Dec 27, 2018

Asia, Europe & US Markets at Close Report


Japanese stocks soar more than 3.5 percent, but China dragged lower by oil giant news
Eustance Huang

Shares in much of Asia rose on Thursday afternoon following an overnight surge in stocks on Wall Street.
Japan's Nikkei 225, which has veered in and then out of bear market territory this week, surged 3.88 percent on the day to close at 20,077.62 while the Topix jumped 4.90 percent to finish its trading day at 1,501.63 as the two indexes climbed for the second-straight day after their Christmas Day tumble.
Shares of Japan Display surged 5.88 percent on the back of a report that the iPhone XR comprised 32 percent of Apple's iPhone sales in the U.S. in the 30 days after its release. Japan Display supplies the liquid crystal display panels used in the iPhone XR.
In Australia, the ASX 200 rose 1.88 percent to close at 5,597.2, with all sectors seeing gains.
Of note, the energy sector Down Under jumped 3.2 percent, with shares of oil-related companies advancing. Santos rose 2.67 percent, Woodside Petroleum gained 4.16 percent and Beach Energy climbed up by 1.14 percent.
Similar gains were seen in Japan, where Inpex advanced 4.28 percent, JXTG jumped 8.06 percent, Fuji Oil gained 5.04 percent and Japan Petroleum Exploration soared 6.08 percent.
Those moves came on the back of a strong rebound in oil prices on Wednesday, which saw both U.S. and international benchmark Brent crude post their largest one-day increase since Nov. 30, 2016, when OPEC signed a landmark agreement to cut production.
However, both U.S. and Brent crude pared some of Wednesday's big gains in Thursday's afternoon Asian trading hours. The U.S. crude futures contract slipped 0.3 percent to $46.08 per barrel while the Brent crude futures contract also shed 0.18 percent to $54.37 per barrel.
South Korea's Kospi closed largely flat at 2,028.44.
Troubles in China over Sinopec
The mainland Chinese markets, which have been closely watched as a result of Beijing's trade war with Washington, bucked the overall positive trend to see losses on the day. The Shanghai composite fell around 0.61 percent to close at about 2,483.09 while the Shenzhen composite fell 1.216 percent to finish its trading day at approximately 1,264.23. The Shenzhen component also declined by 1.018 percent to close at about 7,215.34.
Hong Kong's Hang Seng Index also slipped about 0.4 percent, as of its final hour of trading.
The moves came after state-owned oil company China Petroleum & Chemical, also known as Sinopec, reportedly suspended two top officials at its trading arm after the company suffered losses.
Hong Kong-listed shares of Sinopec fell around 4.2 percent, as of its final hour of trading, while its Shanghai-listed counterpart plunged 6.75 percent on the day following the report.

Asia-Pacific Market Indexes Chart

NIKKEINikkei 225 IndexNIKKEI20077.62750.563.88
HSIHang Seng IndexHSI25478.88-172.50-0.67
ASX 200S&P/ASX 200ASX 2005597.200.000.00
KOSPIKOSPI IndexKOSPI2028.440.430.02
CNBC 100CNBC 100 ASIA IDXCNBC 1007226.11122.551.73
Wall Street jumps
In market action stateside, stocks saw major gains. The Dow Jones Industrial Average posted its largest single-day point gain in history, jumping 1,086.25 points, or 4.98 percent, to close at 22,878.45. Wednesday's gain also marked the biggest upside move on a percentage basis for the Dow since March 23, 2009, when it rose 5.8 percentage points.
The S&P 500 also catapulted 4.96 percent — its best day since March 2009 — to finish the trading day at 2,467.70. The Nasdaq Composite also had its best day since March 23, 2009, soaring 5.84 percent to close at 6,554.36.
Wednesday marked the biggest post-Christmas rally for U.S. stocks ever.
Because U.S. exchanges were closed Tuesday for the holiday, the moves on Wall Street followed Monday's sharp sell-off, which sent the major indexes down more than 2 percent and ended with the S&P 500 falling into a bear market. The S&P 500 was down 20.06 percent from an intraday record high set on Sept. 21 before Wednesday's sharp rebound.
On Wednesday afternoon, futures pointed to a slight decline for the Dow, S&P 500 and Nasdaq at the open on Thursday.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 96.862 after touching an earlier low of 96.770.
The Japanese yen, widely viewed as a safe-haven currency, traded at 111.01 after touching highs above 110 in the previous session. The Australian dollar was at $0.7045 after seeing lows around the $0.703 handle yesterday.
— CNBC's Fred Imbert and Reuters contributed to this report.


Europe markets close sharply lower as global sell-off continues; German DAX down 2.4%

Matt Clinch,Chloe Taylor

European markets erased early morning gains to close sharply lower Thursday afternoon, as market sentiment soured and a global sell-off in risk assets resumed.

European Markets: FTSE, GDAXI, FCHI, IBEX

FTSEFTSE 100FTSE6584.68-101.31-1.52608378280
The pan-European Euro Stoxx 600 index closed down 1.75 percent provisionally, after a slightly higher start with markets in the region reopening after the Christmas holidays. Germany’s DAX led the declines, down nearly 2.4 percent, and the Italian FTSE MIB slid 1.8 percent, as those markets missed out on heavy losses seen Monday when both were shut.
The Stoxx 600 is in correction territory and was around 17 percent off its most recent 52-week high as markets opened Thursday. The DAX is in bear market territory, around 22 percent off its most recent 52-week high. It’s also on track for its worst month since January 2016 and its worst year since 2008.
A dramatic surge in U.S. stocks provided some relief to global markets overnight, with the Dow Jones Industrial Average gaining more than 1,000 points in Wednesday’s trading session. However on Thursday, Wall Street traded sharply lower, giving back some of the strong gains from the previous day, amid renewed tensions between China and the United States.
Reuters reported, citing three sources familiar with the situation, that President Donald Trump is considering an executive order to ban U.S. companies from using equipment built by Chinese firms Huawei and ZTE.
Back in Europe, France’s Vinci Airports announced it will buy a majority stake in London Gatwick for $3.7 billion, sending Vinci stocks 1 percent higher in early deals. The stock closed the day up just 0.14 percent.
In Italy, banking stocks were lower after Banca Carige’s top investor blocked a vital 400 million euro share issue for the lender, Reuters reported.
—CNBC’s Eustance Huang and Fred Imbert contributed to this article.


Dow closes 250 points higher in wild session, erases 600-point drop

Fred Imbert,Eustance Huang

The Dow Jones Industrial Average traded higher on Thursday, erasing steep losses a day after posting a historic surge.
The 30-stock index traded 157 points higher after plunging 611 points earlier in the day. The S&P 500 held 0.5 percent higher after sliding more than 2 percent. The Nasdaq Composite traded 0.2 percent higher after dropping more than 3 percent.
“You went from $200 million to sell [at the close] which was less than expected. That started the early rally. Now there’s over $2 billion to buy, ” said Art Cashin, director of floor operations at UBS. “They thought were going to be huge sellers, now they’re huge buyers.”
Earlier in the day, stocks fell amid renewed tensions between China and the United States.
Reuters reported, citing three sources familiar with the situation, that President Donald Trump is considering an executive order to ban U.S. companies from using equipment built by Chinese firms Huawei and ZTE. This executive order would come at a time when the two largest world economies are trying to strike a permanent trade deal. Earlier this month, China and the U.S. agreed to a 90-day grace period to come up with an agreement.
“The uncertainty will continue to weigh on the market,” said Dave Campbell, principal at BOS. “I think that’s going to help drive the volatility as we roll forward because I don’t think it’s going to be a clean path to an agreement or some kind of resolution.”
“China has recognized they’re a little more vulnerable in this trade negotiation with the U.S. because they have more at stake than the U.S. does, from a bilateral stance,” Campbell said. “I think there will be a resolution, but it’s going to be a rocky path, which to me means a lot more volatility both up and down.”
Shares of trade bellwethers like Caterpillar, Boeing and Deere all fell more than 1.5 percent.
WATCH: Why you shouldn’t panic when stocks are getting slammed
This decline comes after a historic surge on Wall Street. On Wednesday, the Dow rallied to close more than 1,000 points higher, its biggest single-day point gain ever.
“Just when everyone had counted the market down, the market bounded back,” John Carey, a portfolio manager at Amundi Pioneer, told CNBC on Thursday. He described the Wednesday bounce on Wall Street as “very positive” and also “quite surprising.”
“I think it has to do with valuations, we got to a point where the market had sold off about 20 percent and price-to-earnings multiples had come down on the S&P from the low 20s to 15-16 times earnings and all of a sudden people looked around and thought stocks might be a good buy,” Carey said.
Wednesday’s gain also marked the biggest upside move on a percentage basis for the Dow since March 23, 2009, when it rose 5.8 percentage points. The S&P 500 and Nasdaq also notch their best gains since March 23, 2009.
However, investors remained hesitant to call Wednesday’s lows a bottom.
Benjamin Lau, chief investment officer of Apriem Advisors, said this market is “completely emotionally driven,” adding: “When the trend gets like this, it’s hard to say when it will end.”
The Cboe Volatility index, considered the best gauge of fear in the market, is trading at 32.33, even after Wednesday’s massive rally.
—CNBC’s Patti Domm contributed to this report.

Source: CNBC

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