As rest of Asia rises on Friday, Japan solidifies first annual decline since 2011
The Nikkei 225 and Topix index both struggled for gains on the day: The former slipped 0.31 percent to close at 20,014.77 while the latter shed 0.5 percent to finish its trading week at 1,494.09. The declines came on the back of two straight days of gains for both indexes.
Those losses saw the Nikkei 225 post its first annual loss since 2011. The Topix also booked its largest annual loss since 2011, according to Reuters. The Japanese markets are closed next Monday, making Friday their final trading day of 2018.
The moves in Japan came after the country’s central bank released its summary of opinions from its December monetary policy meeting, where it noted the “heightening” of downside risks to economic activity.
“Regarding the outlook for the global economy, risks have been tilted to the downside on the whole amid heightening uncertainties and a prevailing view that such situation will be protracted,” said the note from the Bank of Japan.
Japan’s industrial output also declined in November, registering a 1.1 percent fall as compared with the previous month. The country’s jobless rate also increased to 2.5 percent in November, as compared to 2.4 percent in October, according to data from the Ministry of Internal Affairs and Communications.
The mainland Chinese markets, closely watched in relation to the Sino-U.S. trade war, were higher on the day. The Shanghai composite rose approximately 0.44 percent to close at about 2,493.90. The Shenzhen composite gained 0.288 percent to finish its trading week at around 1,267.87 while the Shenzhen component added 0.339 percent to close at about 7,239.79.
Meanwhile, Hong Kong’s Hang Seng index fractionally lower during its final hour of trade.
The ASX 200 in Australia gained about 1.02 percent to close at 5,654.3, with most of its sectors higher. The heavily weighted financial subindex rose 2.34 percent as shares of Australia’s so-called Big Four banks saw gains. Australia and New Zealand Banking Group climbed up by 2.70 percent, Commonwealth Bank of Australia rose 2.25 percent, Westpac gained 2.98 percent and National Australia Bank advanced 2.66 percent.
South Korea’s Kospi gained 0.62 percent to close at 2,041.04.
Asia-Pacific Market Indexes Chart
|NIKKEI||Nikkei 225 Index||NIKKEI||20014.77||-62.85||-0.31|
|HSI||Hang Seng Index||HSI||25504.20||25.32||0.10|
|ASX 200||S&P/ASX 200||ASX 200||5654.30||57.10||1.02|
|CNBC 100||CNBC 100 ASIA IDX||CNBC 100||7271.23||33.98||0.47|
The Dow rose 260.37 points, or 1.1 percent, to close at 23,138.82. The S&P 500 advanced 0.86 percent to end the day at 2,488.83 while the Nasdaq Composite gained 0.4 percent to close at 6,579.49.
At its lows of the day, the Dow had fallen 611 points. The S&P 500 and Nasdaq fell as much as 2.8 percent and 3.3 percent, respectively.
Futures also pointed to a slightly higher open for stocks stateside, during the afternoon of Asian trading hours on Friday.
Reuters reported, citing three sources familiar with the situation, that U.S. President Donald Trump is considering an executive order to ban American companies from using telecommunications equipment made by China’s Huawei and ZTE.
Hong Kong-listed shares of ZTE gained around 0.8 percent on Friday, as of their final hour of trade, after seeing declines the previous day. Its Shenzhen-listed counterpart, however, fell 1.56 percent on the day.
The report comes amid efforts by officials from China and the U.S. to strike a permanent trade deal. Earlier in December, the two countries agreed to a 90-day grace period on implementing additional tariffs in order to come up with an agreement.
Following that development, the British newspaper The Times also reported that Britain’s defense minister said he has “grave, very deep concerns about Huawei providing the 5G network in Britain. ”
A spokesperson for the Ministry of Defence confirmed Williamson’s comments to CNBC over the phone.
The next-generation 5G wireless standard is expected to be a significant leap over the current generation, enabling technologies such as the internet of things and autonomous vehicles through higher data transfer speeds and reduced communication time between devices. The U.S., China and even Finland are jostling for supremacy over the nascent technology.
The Japanese yen, widely viewed as a safe-haven currency, traded at 110.48 against the greenback after touching lows around 111.3 yesterday. The Australian dollar was at $0.7048 after touching highs above $0.707 in the previous session.
— Reuters and CNBC’s Fred Imbert and Chloe Taylor contributed to this report.
European markets close higher; tech, banks and oil record big gains
European Markets: FTSE, GDAXI, FCHI, IBEX
Tech and bank stocks led the charge. Among the former, AMS, Sitronic Nam, Infineon and Logitech were big gainers while in the banking sector Banco BPM and Metro Bank attracted buyers.
Basic Resources stocks were also among those leading the gains after a rise in Chinese stocks overnight and as fears over a US-China trade war subsided.The ongoing fight between the two largest economies in the world has rattled global stock markets for much of 2018.
Rio Tinto, Evraz, Anglo-American, Glencore, Antofagasta and Randgold Resources were all bid up following a rise in metal prices.
Other sectors enjoying substantial gains on Friday morning trade include Construction & Material, Chemicals and Oil & Gas.
Friday’s gains come after heavy selling in the region on Thursday, when the DAX had closed down 2.4 percent. The German bourse is still in bear market territory, around 20 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.
U.S. stocks fell and then rose sharply in Friday morning trade.
Dow closes lower, ending a volatile week on Wall Street
Stocks gyrated in yet another volatile session on Friday as Wall Street concluded a roller-coaster week.
The Dow Jones Industrial Average traded 54 points lower in the final hour of trading. The S&P 500 was down 0.16 percent while the Nasdaq Composite climbed 0.2 percent. Gains in Apple, Amazon and Netflix lifted the tech-heavy Nasdaq. Both the Nasdaq and S&P 500 were also lower earlier on Friday.
Friday’s moves took place after the Dow closed 260 points higher on Thursday, erasing a 611-point loss. That reversal marked the 30-stock index’s biggest intraday turnaround in eight years. The S&P 500 also posted solid gains after declining more than 2 percent while the Nasdaq erased a 3 percent loss.
“We’re in the year-end period where there are a lot of folks that have stepped away from the market and therefore some significant changes in buy or sells have a more profound impact on the market,” said Gibson Smith, founder of Smith Capital Investors. “There’s another big component: A lot of focus-driven issues are being driven to a head. Some of it is on trade, some of it on the government shutdown, the Federal Reserve versus Donald Trump, they are all coming to a head at a time when there is a lot of illiquidity in the market. ”
“I think the market is growing tired of some of the uncertainty and some of the erratic nature of communication that has come out. That’s causing some of the volatility,” Smith added. “The volatility is going to continue and it’s going to continue into the New Year. There are still a lot of unresolved issues that sit on the horizon.”
Thursday’s gains added to Wednesday’s historic rally in which the major indexes had their best day in nearly 10 years.
“We all know that 2017 was an outlier - historically calm by multiple measurements. Volatility - on the other hand - is ‘normal.’ While very true, that tune can’t be used to describe what’s happened this week,” Frank Cappelleri, executive director at Instinet, wrote in a note to clients. “In just two and a half days, the SPX has witnessed its worst Christmas Eve showing ever, its biggest gain since 2009 and now the largest intra-day positive reversal since 2010.”
For the week, the major indexes are all up at least 3.5 percent and were all on pace to post their biggest weekly gain since late November.
Stocks are still, however, on track for their worst December performance since 1931. The S&P 500 was down 9.8 percent for the month through Thursday’s close while the Dow has lost 9.4 percent.
Investors have fretted over fears of a monetary policy mistake by the Federal Reserve, an ongoing government shutdown in Washington and potential signals the global economy may be slowing down. Wall Street is also watching developments on the trade front as China and the U.S. try to strike a deal on trade — and the clock ticks down on the two nations’ tariff ceasefire.
“When you look at more economically sensitive stocks in the United States today, they’re priced as if a recession is a forgone conclusion,” Sean Stannard-Stockton, president and chief investment officer at Ensemble Capital Management, told CNBC’s “Squawk Box. ” That, he said, “might happen, but it also might not.”
“We definitely think that investors in kind of more economically sensitive, high-quality businesses are going to be well rewarded for buying stocks at these prices,” Stannard-Stockton said.
The recent moves in stocks also put the Dow and S&P 500 on track for their first yearly loss since 2015. The Nasdaq, meanwhile, was on pace to log its first yearly decline since 2011.