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Fed signals help FTSE 100 brush off Italy woes, buyout spurs Acacia

LONDON, July 20 ― London's FTSE 100 ended higher yesterday as bolstered hopes of a US interest rate cut stoked risk appetite, though the index's advances were reined in after political turmoil in Italy triggered a broad sell-off in bank stocks….


Australian shares jump on rising chance of Fed cuts; NZ touches record

Australian shares surged on Friday with gains across the board after comments from a top Federal Reserve official virtually confirmed there will be a U.S. rate cut late this month.

At 0204 GMT, the S&P/ASX 200 index was up 0.8% or 49.8 points to 6,698.9.

If the midday gains stands, Friday will be the benchmark’s best day since June 19.

The benchmark was on track to finish the week in the black, despite losing 0.4% on Thursday.

New York Fed President John Williams on Thursday emphasized the importance of acting quickly to arrest any weakness in the U.S. economy and said policymakers cannot afford to keep their “powder dry” and wait for potential economic problems to materialize.

Stephen Innes, managing partner at Vanguard Markets in Bangkok, said the Fed “looks primed to deliver on market wishes of 75 basis points in cuts for 2019 while not ruling out a policy bazooka 50 bp cut in July as Fed speakers one by one stick to the script unwavering from the current dovish guidance.”

The dovish remarks were welcomed by investors who have been hoping for aggressive policy easing by the Fed and prompted heavy buying across the sectors, with advancing issues nearly double the decliners.

Heavyweight financials were on track for their best day in more than two weeks, with the Big Four banks gaining between 1% and 2.2%.

Among them, National Australia Bank was the biggest mover as traders cheered its hire of Ross McEwan, credited with turning around Royal Bank of Scotland, as its new chief executive.

The Fed officials’ remarks also boosted gold, sending Australian miners of the precious metal to their highest in nearly eight years.

Northern Star Resources Ltd reached a record high and was among the top performers on the benchmark, while Resolute Mining Ltd hit a more than two-year peak.

The broader mining sector also advanced, with Rio Tinto rising 0.9%.

New Zealand’s benchmark S&P/NZX 50 index rose 0.2% or 23.5 points to an all-time high of 10,764.59.

The benchmark was headed for its sixth consecutive week of gains.

The biggest gainers were local-listings of Westpac Banking Corp and Australia and New Zealand Banking Group Ltd , which rose 0.6% and 1%. – Reuters


Asia stocks gain, dollar slumps as Fed reinforces rate cut expectations

TOKYO, July 19 ― Asian stocks gained and the dollar sagged today after a top Federal Reserve official all but cemented expectations of a US interest rate cut later this month. New York Fed President John Williams said yesterday that policymakers…


Stocks wobble on trade, earnings unease; US Treasury yields fall

TOKYO: Asian shares edged lower on Thursday as Wall Street stocks dropped on early signs that the U.S.-China trade war could hurt corporate earnings, which helped underpin solid demand for safe-haven U.S. Treasuries.

MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.2%, while Japan’s benchmark Nikkei shed 1.7% and Australian shares fell 0.3%.

Chinese shares followed the suit, with the benchmark Shanghai Composite and the blue-chip CSI 300 down 0.7% and 0.6%, respectively, while Hong Kong’s Hang Seng retreated 0.5%.

South Korea’s market was off 0.4% after the Bank of Korea unexpectedly cut its policy interest rate for the first time in three years, as uncertainties from a trade dispute with Japan added to anxiety about the economy’s outlook.

On Wall Street, all three major indexes fell on Wednesday as weak results from trade-related CSX Corp stoked concerns that the protracted trade standoff between the United States and China could hurt U.S. corporate earnings.

Earlier in the week, U.S. President Donald Trump kept up pressure on Beijing with a threat to put tariffs on another $325 billion of Chinese goods, amid market nervousness over when face-to-face talks will resume.

The Wall Street Journal reported that progress toward a U.S.-China trade deal has stalled while the Trump administration determines how to address Beijing’s demands that it ease restrictions on Huawei Technologies.

The Dow Jones Industrial Average fell 0.4%, the S&P 500 lost 0.7% and the Nasdaq Composite dropped 0.5%.

Netflix Inc shares tumbled in after-market trade after the world’s dominant subscription video service lost U.S. streaming customers for the first time in eight years and missed targets for new subscribers overseas, raising worries in an already nervous the market.

Treasury yields slid as concerns about the U.S.-China trade war boosted demand for safe haven debt and after data showed weakness in the U.S. housing market.

Yields on benchmark 10-year and 30-year bonds climbed more than seven basis points each, to 2.06% and 2.57%, respectively.

U.S. homebuilding fell for a second straight month in June and permits dropped to a two-year low, suggesting the housing market continued to struggle despite declining mortgage rates.

In the foreign exchange market, the dollar nursed light losses on Thursday, weighed down by lower U.S. yields and a rebound by the pound from 27-month lows.

The International Monetary Fund (IMF) on Wednesday said the dollar was overvalued by 6% to 12%, based on near-term economic fundamentals.

The dollar index versus a basket of six major currencies was not much changed at 97.099 after shedding 0.2% the previous day.

The euro also was nearly flat at $1.1238 after crawling up marginally 0.1% on Wednesday. The greenback fell 0.2% to 107.72 yen, extending an overnight loss of 0.3%.

Sterling was steady at $1.2437. It had stumbled to $1.2382 overnight, its lowest level since April 2017 on concerns of a no-deal Brexit.

“Risks of a no-deal Brexit have increased to worryingly high levels. Investors should be concerned,” said Seema Shah, London-based chief strategist at Principal Global Investors.

“In the scenario where a no-deal Brexit becomes a realistic prospect, the continued decline in sterling will be just a drop in the ocean.”

Britain’s fiscal watchdog is expected to say on Thursday the country’s economy will fall into a recession next year and that its economy will be 3% smaller in the event of a “no-deal” Brexit, The Times newspaper reported.

Precious metals were in demand, with gold prices hitting their highest in two weeks on Thursday, as weaker-than-expected U.S. data reinforced expectations for an interest rate cut by the U.S. Federal Reserve later this month, dragging the dollar lower.

Spot gold gained as much as 0.2% to hit $1,429.10 per ounce, its highest level since July 3. Silver climbed as much as 1.0% to 16.12, its highest level since February, extending gains for a fourth straight session.

Oil prices steadied on Thursday after falling in the previous session when official data showed U.S. stockpiles of products like gasoline rose sharply last week, suggesting weak demand during the peak driving season.

Brent crude futures were up 0.3% to $63.86 a barrel, while U.S West Texas Intermediate (WTI) crude futures edged up 0.1% to $56.84 a barrel.


Asian stocks wobble, bond yields fall on earnings woes, trade worries

TOKYO, July 18 — Asian shares wobbled in early trading today as Wall Street stocks dropped on early signs that the US-China trade war could hurt corporate earnings, helping to underpin solid demand for safe-haven US Treasuries. MSCI's broadest…


PChem drags Bursa Malaysia to end lower, CI down 0.68%

KUALA LUMPUR: Bursa Malaysia finished 0.68% lower today, dragged down by Petronas Chemicals (PChem), amid profit-taking in the second and third liners.

PChem, which contributed 4.46 points to the loss in the composite index, fell 32 sen to close at RM7.92.

At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) shrank 11.41 points to 1,657.53 compared with 1,668.94 yesterday.

The benchmark index opened 1.44 points easier at 1,667.50 today and moved between 1,656.76 and 1,667.79 throughout the day.

Losers trounced gainers by 618 to 226, while 400 counters were unchanged, 612 untraded and 21 others suspended.

Citigroup Investment Research has downgraded PChem yesterday to “sell” from “neutral” with a revised target price of RM7.20 from RM9.00.

The research house noted the de-rating was due to lower return on equity of 11% and weaker earnings uplift from the Refinery and Petrochemical Integrated Development (Rapid) expansion versus consensus.

It also said that PChem’s monoethylene glycol plant would be a key drag as it will be barely profitable due to massive glut, as well as weak China buying sentiment.

Meanwhile, Maybank IB research analyst Nik Ihsan Raja Abdullah told Bernama that profit-taking was actively seen in the second and third liner stocks.

“We can see that the small capital index hit 12,319.91 in May 25 and it now has reached 13,808.89 … it went up significantly and now investors are raking in the profits,” he told Bernama.

Among heavyweights Tenaga Nasional and Malaysian Airports both shed 22 sen to RM13.56 and RM8.56 respectively, Maxis was down six sen to RM5.64, while Sime Darby and Digi were five sen easier to RM2.20 and RM4.93 respectively.

As for the actives, market debutant i-Stone was 8.5 sen higher to 24.5 sen, Sumatec Resources added half-a-sen to 3.5 sen, Sapura Energy slid half-a-sen to 30.5 sen and its warrant was flat at 13 sen, while NETX was unchanged at 1.5 sen.

The FBM Emas Index was down 79.70 points to 11,777.58 and the FBMT 100 Index slipped 78.94 points to 11,601.55, while the FBM Emas Shariah Index dipped 109.83 points to 12,148.86.

The FBM Ace declined 31.22 points to 4,669.51 and the FBM 70 shed 97.39 points to 14,853.28.

Sector-wise, the Financial Services Index fell 23.66 points to 16,591.56, the Plantation Index shed 9.62 points to 6,876.03 and the Industrial Products and Services Index eased 2.64 points to 157.57.

Turnover rose to 3.82 billion units worth RM1.96 billion compared with 3.32 billion units worth RM2.09 billion yesterday.

Main Market volume was slightly higher at 2.59 billion shares worth RM1.71 billion against 2.54 billion shares worth RM1.94 billion on Tuesday.

Warrants turnover declined to 389.17 million units worth RM74.17 million from 399.41 million units worth RM82.62 million yesterday.

Volume on the ACE Market soared to 843.76 million shares worth RM178.39 million from Tuesday’s 380.0 million shares worth RM65.76 million.

Consumer products and services accounted for 346.06 million shares traded on the Main Market, industrial products and services (202.66 million), construction (144.23 million), technology (174.88 million), SPAC (nil), financial services (37.30 million), property (98.99 million), plantation (9.94 million), REITs (16.34 million), closed/fund (2,000), energy (1.37 billion), healthcare (15.54 million), telecommunications and media (118.85 million), transportation and logistics (24.32 million) and utilities (24.89 million).

The physical price of gold as at 5.00pm stood at RM179.41 per gramme, down RM1.32 from RM180.73 at 5.00pm yesterday. — Bernama


Asia shares subdued, dollar benefits as sterling suffers

SYDNEY: Asian shares drifted off on Wednesday as anxious investors awaited more earnings reports from corporate America, while the dollar held firm in the wake of robust U.S. retail data and a Brexit-driven dive in the pound.

Oil prices also nursed losses on hints U.S. tensions with Iran could be easing and as data showed stockpiles fell by less than expected last week.

Not helping the mood was Tuesday’s threat from U.S. President Donald Trump to put tariffs on another $325 billion of Chinese goods, amid market nervousness over when face-to-face trade negotiations will resume.

The fallout of the year-long trade dispute was apparent in data from Singapore, where exports sank by the most in six years in June led by a steep drop in electronics.

In stock markets trade was generally muted with MSCI’s broadest index of Asia-Pacific shares outside Japan off 0.3%.

Japan’s Nikkei eased 0.5% and South Korea 1%, while Chinese blue chips dipped into the red.

E-Mini futures for the S&P 500 were a fraction firmer.

A surprisingly strong reading on U.S. retail sales released overnight had outweighed weakness in industrial production for the June quarter and boosted the dollar.

Yet, it barely budged market wagers on a Federal Reserve rate cut this month, with Chicago Fed President Charles Evans touting 50 basis points of easing.

Futures are 100% priced for a cut of 25 basis points, and imply a 25% chance of 50 basis points.

“We do not expect these solid (retail) results to impact the Fed’s decision to cut rates at the end of the month,” said Michelle Girard, chief U.S. economist at NatWest Markets.

“The Fed knows the U.S. consumer is strong; policymakers are worried about the downside risks associated with global growth and weak manufacturing/business investment, which is why they believe a rate cut is appropriate.”

Analysts at Barclays were even more dovish, arguing persistent uncertainty and soft inflation warranted quarter-point cuts in July, September, and December.

STERLING STRICKEN

Expectations of policy stimulus, and the resulting drop in bond yields, helped counter concerns about corporate profits.

JPMorgan Chase & Co and Wells Fargo & Co beat quarterly profit estimates but reported weaker net interest income. Bank of America and Netflix report on Wednesday.

The Dow eased 0.09% on Tuesday, while the S&P 500 lost 0.34% and the Nasdaq 0.43%.

In currency markets, sterling was the star for all the wrong reasons. It slid 0.9% overnight to 27-month lows amid fears the UK could tumble out of the European Union with no trade deal to soften the blow.

The pound was last at $1.2412, a big come-down from its March peaks of $1.3383.

The dollar was a major beneficiary at 97.351 on a basket of currencies, having risen 0.5% overnight. The euro settled at $1.1210, after a loss of 0.4% on Tuesday, while the dollar held at 108.18 yen.

The dollar’s gains tarnished gold a little, with the precious metal easing to $1,405.45 per ounce from a high above $1,418 on Tuesday.

Oil prices were mixed after falling more than 3% overnight. Brent crude futures edged up 14 cents to $64.49, while U.S. crude dipped 5 cents to $57.57 a barrel.


US big banks beat profit expectations but warning signs grow

NEW YORK, July 17 — Three big US banks reported strong earnings yesterday even as warning signs emerged that the playing field is beginning to tilt against the financial industry. While the biggest risk ahead is that lower interest rates will…


Asia shares slip, US dollar gains as sterling slides

SYDNEY, July 17 — Asian shares drifted lower today after a lacklustre performance by Wall Street, while the US dollar got a lift from robust US retail data and a Brexit-driven dive in the pound. Oil prices also took a spill on hints US tensions…


US retail sales data dents stocks, lifts Treasury yields

NEW YORK, July 17 — A gauge of global equities lost ground yesterday and US Treasury yields moved higher as a stronger-than-anticipated report on retail sales raised the possibility the Federal Reserve could adopt a less dovish stance. US retail…