Asian markets mostly up as vaccine, data add to recovery hopes

HONG KONG – Asian markets mostly edged up Wednesday but gains were tempered as investors took a breather following a recent run-up, though another round of healthy data provided cause for continued optimism for the global recovery.

President Joe Biden gave cause to cheer by saying all adults in the United States would be eligible for a vaccine by April 19, almost two weeks earlier than previously pledged, reinforcing hope that the world’s top economy will get back on its feet more quickly.

That came as California’s governor said he aims to fully reopen the most populous US state by the middle of June if the current pace of inoculations continues.

In a further sign the United States was bouncing back, officials said job openings had surged to a two-year high in February, well above the level expected by most analysts.

That followed last week’s forecast-busting employment report and data showing a strong pick-up in the manufacturing and key services sector.

The string of healthy data — along with Biden’s $1.9 trillion stimulus and $2.25 trillion infrastructure proposal — have helped world markets climb to record or multi-month highs.

Recent concerns that the recovery and expected spending splurge will fan inflation and force central banks to lift interest rates have eased for now, with benchmark 10-year US Treasury yields dipping.

The International Monetary Fund backed up the view of a strong rebound by hiking its 2021 growth forecast for the second time in three months, predicting a 6.0 percent expansion, from its 5.5 percent prior estimate.

Toshiba set to surge

“Early signs show the recovery is accelerating, suggesting a faster return to ‘normal’ than many had dared to hope a few months ago,” said JP Morgan Asset Management’s David Kelly.

“While this is very good news in general, it brings with it challenges for investors in making sure their portfolios are positioned for the very different financial landscape of a post-pandemic world.”

Wall Street was unable to maintain the momentum Tuesday, however, and all three main indexes retreated slightly.

But observers were confident the gains will continue.

“Central banks are continuing to keep interest rates so low so people are looking for some place to put their money where they can get a return,” Sarah Hunt of Alpine Woods Capital Investors told Bloomberg TV.

“I think that’s also why you have stocks priced somewhat for perfection.”

In early trade, Hong Kong dipped as it reopened after an extended holiday weekend, while Shanghai and Tokyo also dropped.

Analysts said buying was dampened by the Chinese central bank’s move to slow loan growth owing to concerns about the development of bubbles.

Elsewhere in Asia, Sydney, Singapore, Seoul, Taipei, Manila, Jakarta and Wellington were in positive territory.

Shares in Japanese giant Toshiba were set to soar Wednesday after it confirmed it had received a buyout offer from a British private equity firm that a report said could be worth $20 billion.

The Nikkei newspaper said CVC Capital Partners was considering a 30 percent premium over the industrial group’s current share price. A flood of buy offers that outweighed sell orders meant the stock could not be traded in early business.

Toshiba said it would “request detailed information and carefully discuss” the offer.

Key figures around 0245 GMT

Tokyo – Nikkei 225: FLAT at 29,685.77 (break)  

Hong Kong – Hang Seng Index: DOWN 0.5 percent at 28,790.62

Shanghai – Composite: DOWN 0.6 percent at 3,460.87

Euro/dollar: DOWN at $1.1869 from $1.1876 at 2100 GMT

Pound/dollar: DOWN at $1.3821 from $1.3823

Euro/pound: DOWN at 85.87 pence from 85.89 pence

Dollar/yen: UP at 109.80 yen from 109.73 yen

West Texas Intermediate: DOWN 0.2 percent at $59.24 per barrel

Brent North Sea crude: DOWN 0.1 percent at $62.65 per barrel

New York – Dow: DOWN 0.3 percent at 33,430.24 (close)

London – FTSE 100: UP 1.3 percent at 6,823.55 (close)

Agence France-Presse 

Wall Street tilts higher again on economic recovery hopes

NEW YORK (AP) — Wall Street’s rally is spilling into a new week as most stocks continue to ride the high supplied by Friday’s surprisingly encouraging report on the U.S. jobs market.

The S&P 500 was up 0.5% in midday trading on Monday, bringing it back within 5.3% of its record set in February, as optimism strengthens that the worst of the coronavirus-induced recession may have already passed. Stocks that would benefit most from an economy that’s growing again were rising the most, but pullbacks for a handful of big tech stalwarts were keeping the market’s overall gains in check.

The Dow Jones Industrial Average was up 248 points, or 0.9%, at 27,359, as of 11:53 a.m. Eastern time, and the Nasdaq composite was up 0.2%.

Stocks have been rising since late March, at first on relief after the Federal Reserve and Capitol Hill pledged to support the economy and more recently on hopes that the recovery may happen more quickly than forecast.

IMPACT ON THE ECONOMY:

– Survey: Business economists expect worst slump since 1940s
– BP to cut 10,000 jobs worldwide amid virus pandemic
– Left out: More workers now losing hope of getting back jobs

Such hopes got a huge boost Friday when the U.S. government said that employers added 2.5 million jobs to their payrolls last month. Economists were expecting to see 8 million more lost.

States across the country are slowly relaxing restrictions on businesses meant to slow the spread of the coronavirus outbreak, which is raising expectations that the economy can pull out of its coma. New York City began reopening on Monday, for example, allowing construction and “nonessential” retailers to start operating again with some restrictions.

That puts more pressure on economic reports this week to confirm that Friday’s jobs report was a true inflection point and not just an aberration.

Even if the economy did hit its bottom a month or two, economists warn that many risks are still looming over a very long road back to full recovery, such as a flareup in U.S.-China tensions. Critics are also still saying the stock market may have risen too quickly and may be setting investors up for disappointment, with the biggest risk being another wave of infections that leads to more lockdowns.

It’s still unclear whether the economy can recover anywhere near as quickly as the stock market, which has rallied sharply after earlier being down nearly 34% from its February record.

“There’s a lot of risk that businesses and the economy don’t recover as fast,” said Tom Martin, senior portfolio manager at Globalt Investments. “When money starts running out in July, are we enough on a path to getting people employed and businesses open?”

Among this week’s economic highlights are reports on inflation and the number of workers applying for jobless benefits. The headliner, though, is likely the Federal Reserve’s meeting on interest rates in the middle of the week.

Full Coverage: Financial markets
The Fed has already promised unprecedented amounts of support to keep markets running smoothly, but will the recent upturn in job growth mean it will pull back at all?

Treasury yields have been climbing in recent days, reflecting rising expectations in the market for the economy and inflation. The 10-year Treasury yield dipped to 0.86% from 0.90% late Friday, but it’s up sharply from 0.66% a week earlier.

Too quick a rise in yields could slow spending and the anticipated economic recovery, though. It can also be a heavy weight on the stock market.

Higher yields make bonds more attractive as investments, which would pull some investors’ dollars away from stocks. High-dividend stocks would likely get hurt in particular, because some income investors had turned to them instead of bonds when yields were lower.

Stocks that would benefit most from a growing economy, meanwhile, were leading the market on Monday to continue their recent trend.

Energy producers, banks and industrial companies were leading the S&P 500, and more than 70% of the stocks in the index were higher.

Travel-related stocks were again notable standouts as investors raised expectations for a reopening economy. Norwegian Cruise Line, Carnival, Alaska Air Group and United Airlines all rose more than 8.5%.

Smaller company stocks also climbed more than the rest of the market, which often happens when expectations for the economy are rising. The Russell 2000 index of small-cap stocks was up 1.4%.

But several titans were giving back a portion of their gains made earlier this year, when investors were piling into the few companies that could hold up in a weak, stay-at-home economy. Microsoft slipped 0.4%, Apple slipped 0.3% and Netflix lost 2.1%. These are some of the biggest companies in the market, which gives their movements more sway over the S&P 500 and other indexes.

In global markets, Japan’s Nikkei 225 index jumped 1.4% after the government reported the economy contracted at a 2.2% annual rate in the January-March quarter, better than the initially estimated minus 3.4%.

Indexes in other countries were more subdued. The Kospi in South Korea was up 0.1%, while the Hang Seng in Hong Kong was virtually flat.

France’s CAC 40 was down 0.4%, Germany’s DAX lost 0.2% and the FTSE 100 in London was down 0.2%.

Oil was down, even after major oil producing nations agreed over the weekend to extend a production cut of nearly 10 million barrels of oil a day through the end of July to counter the blow to demand from the coronavirus pandemic.

Oil had already climbed last week on anticipation of the move, and OPEC officials did not commit to extending the cuts past July or establishing a way to enforce the production limits.

U.S. crude for July delivery fell 3.6% to $38.13 per barrel. Brent crude, the international standard, fell 3.3% to $40.90 per barrel.

___

AP Business Writer Elaine Kurtenbach contributed.

The Associated Press

Stock markets mixed as China-US tensions return to fore

Equities were mixed Wednesday as profit-taking and worries about deteriorating China-US relations were weighed against optimism over the gradual reopening of economies around the world.

Hong Kong extended losses as police fired pepper-ball rounds as anti-China protesters took to the city's streets, with investors fearing the demonstrations could erupt into the worst unrest since last summer.

The broad trend across global markets has been upward for weeks as virus deaths and infections ease in most countries and governments begin to reopen their battered economies, fanning hopes for a recovery in the second half of the year.

Confidence has also come from mind-boggling amounts of stimulus and central bank pledges of support, with the latest coming from the eurozone, where European Commission President Ursula von der Leyen is due to unveil a trillion-euro revival plan for the bloc.

However, there was little fresh desire for risk assets with eyes on the simmering row between the world's top two economies, fuelled by Donald Trump's barracking of China over its role in the pandemic, and made worse this week by Beijing looking to tighten its grip on Hong Kong.

The financial hub was thrown back into the spotlight Friday when Chinese officials proposed a controversial security law that many fear could ring the death knell for the city.

And Trump appeared to agree, with his press secretary Kayleigh McEnany telling a briefing he had said it is "hard to see how Hong Kong can remain a financial hub if China takes over".

Washington has already said it could terminate its preferential trading status over the issue.

Markets are also fretting over reports that the US has warned it will impose sanctions on Chinese entities and officials if it goes ahead with the law.

While China and Hong Kong leader Carrie Lam have sought to ease worries about the extent of the law plans, Jeffrey Halley at OANDA warned that no matter how they try to dress it up "the passage of the security legislation from Beijing will have consequences for the beleaguered (city) and will further darken relations between the US and China."

Concerns about the growing crisis have weighed on the yuan, losing almost three percent this year, with observers suggesting it could hit a record low.

- Hong Kong protest worries -

Meanwhile, there are concerns about another flare-up in the city as lawmakers prepare to discuss a law that bans insulting China's national anthem.

Seven months of sometimes violent demonstrations last year hammered the local economy and raised questions about its future.

Hong Kong fell 0.4 percent, Shanghai lost 0.3 percent and Sydney fell 0.1 percent, while Kuala Lumpur dropped more than one percent as Malaysia struggled to contain its virus. There were also losses in Jakarta, Bangkok and Singapore.

But Tokyo, Mumbai, Manila, Seoul, Taipei and Wellington saw gains.

In early trade, London, Paris and Frankfurt were all higher. The gains in Paris as dealers brushed off a warning from officials that France's economy could contract 20 percent in the second quarter.

Still, National Australia Bank's Tapas Strickland, said in a note: "Risk sentiment continues to surge as activity lifts following the gradual easing of containment restrictions around the world, while vaccine hopes remain high with 10 different vaccines currently at the human trial stage."

He also cited comments from Federal Reserve official James Bullard that the third quarter "very likely, right behind the worst quarter, will be the best quarter of all time on the growth perspective".

Wall Street, where the New York Stock Exchange trading floor reopened after two months of closure, finished higher, with the Dow gaining 2.2 percent.

Oil markets slipped on China-US tensions, and after reports said Russia could begin easing up on its supply cuts in July.

Massive reductions by Moscow and other major producers including Saudi Arabia have helped fuel a surge in prices over the past month, with WTI doubling since the end of April.

But analysts said the commodity will likely continue to win support from the easing of lockdowns, which is expected to boost demand as people get back on the road.

- Key figures at around 0810 GMT -

Tokyo - Nikkei 225: UP 0.7 at 21,419.23 (close)

Hong Kong - Hang Seng: DOWN 0.4 percent at 23,301.36 (close)

Shanghai - Composite: DOWN 0.3 percent at 2,836.80 (close)

London - FTSE 100: UP 0.7 percent at 6,112.97

Euro/dollar: DOWN at $1.0954 from $1.0984 at 2040 GMT Friday

Dollar/yen: UP at 107.51 yen from 107.54 yen

Pound/dollar: DOWN at $1.2292 from $1.2335

Euro/pound: DOWN at 89.11 pence from 89.04 pence

West Texas Intermediate: DOWN 2.3 percent at $33.55 per barrel

Brent North Sea crude: DOWN 2.2 percent at $35.37 per barrel

New York - Dow: UP 2.2 percent at 24,995.11 (close)

Agence France-Presse

US stocks edge mostly lower after China virus cases spike

Stocks closed lower on Wall Street Thursday as investors turned cautious following a surge in cases of a new virus in China that threatens to crimp economic growth and hurt businesses worldwide.

The modest losses snapped a three-day streak of record highs for the S&P 500 and Nasdaq composite. The selling marked only the second day this month that the market has declined.

Investors largely set aside worries about the economic impact of the virus outbreak the past two weeks. Markets rallied this week partly due to reports that the number of new cases of the new virus in China had declined.

Hopes that the spread of the virus had peaked were dashed Thursday, when China reported a sharp rise in cases and deaths after the hardest-hit province of Hubei took a new approach to classifying and diagnosing the virus.

“We’re in a data-dearth period in the sense that we’re not really going to know fully the effects of the impact of that on Asian and Chinese growth, as well as global growth, for at least several weeks,” said Lisa Erickson, head of traditional investments at U.S. Bank Wealth Management. “You’re just going to see some back-and-forth movement (in the market) until that time.”

The S&P 500 index dropped 5.51 points, or 0.2%, to 3,373.94. The Dow Jones Industrial Average slid 128.11 points, or 0.4%, to 29,423.31. It was down as much as 205 points earlier.

The Nasdaq fell 13.99 points, or 0.1%, to 9,711.97. The Russell 2000 index of smaller company stocks rose 4.36 points, or 0.3%, to 1,693.74.

Markets in Europe and Asia finished mostly lower. The yield on the 10-year Treasury held steady at 1.62%.

The major U.S. indexes wobbled for much of the day as investors weighed company earnings reports and the latest news on the virus outbreak in China.

The change in how Hubei determines and reports cases of the new virus pushed the number of cases worldwide to more than 60,000.

The spike came after two days in which the number of new cases dropped, complicating efforts to understand the trajectory of the outbreak.


Businesses have already been hurting due to the outbreak and more of them are warning that the effects will linger through the year. Organizers of the world’s biggest mobile technology fair cancelled the event, set to take place in Spain, because of health and safety concerns over the outbreak.

Travel-related companies fell broadly Thursday, shedding some of their gains from earlier in the week. Airlines helped pull industrial sector stocks lower. United Airlines fell 1.5%.

MGM Resorts International, which gets about 20% of its revenue from the gambling haven of Macau, pulled its profit forecast for 2020. The stock lost 5.5%. Cruise line operator Carnival slid 2%.

Technology and health care stocks were among the biggest decliners, along with companies that rely on consumer spending. Cisco Systems fell 5.2%, Mylan slid 2.3% and Hanesbrands dropped 2.6%.

Household goods makers, utilities, real estate companies and communication services stocks notched gains.

Fashion company Ralph Lauren warned that the viral outbreak cut into fourth-quarter sales by an estimated $55 million to $70 million. The stock fell 0.6%.

Alaska Air Group bucked the trend, adding 1.5% after the airline said it will cooperate more closely with American Airlines on West Coast service. The airlines asked for government permission to expand revenue-sharing to cover international flights in Seattle and Los Angeles.

Benchmark crude oil rose 25 cents to settle at $51.42 a barrel. Brent crude oil, the international standard, gained 55 cents to close at $56.34 a barrel. Wholesale gasoline was unchanged at $1.58 per gallon. Heating oil was also unchanged at $1.68 per gallon. Natural gas fell 1 cent to $1.83 per 1,000 cubic feet.

Gold rose $7.70 to $1,575.10 per ounce, silver rose 12 cents to $17.60 per ounce and copper rose 1 cent to $2.62 per pound.
The dollar fell to 109.79 Japanese yen from 110.08 yen on Wednesday. The euro weakened to $1.0843 from $1.086.

source: business.inquirer.net

Asian shares mixed amid uncertainties on Brexit, China trade

TOKYO –  Asian shares were mixed Monday amid uncertainties about Britain’s exit from the European Union and the ongoing trade conflict between the U.S. and China

Japan’s benchmark Nikkei 225 gained nearly 0.3% in early trading to 22,548.07. South Korea’s Kospi picked up 0.2% to 2,065.68, while Hong Kong’s Hang Seng added 0.2% to 26,778.99. The S&P/ASX 200 in Australia lost 0.1% to 6,640.40, while the Shanghai Composite slipped 0.1% to 2,934.30.

Shares fell in Taiwan and were mixed in Southeast Asia.

British Prime Minister Boris Johnson is trying to win over rebellious lawmakers in time to meet the Oct. 31 Brexit deadline for the UK’s exit from the 28-nation European Union.

A vote over the weekend ended with an amendment that delays the proposed deal, leaving the situation uncertain. And EU officials have not yet responded to Johnson’s reluctant request for an extension of the month’s end deadline.

“The can is not kicked far down the road with UK Prime Minister Boris Johnson expected to seek a new ‘meaningful vote’ on his deal as soon as Monday with the countdown to the Brexit deadline,” Jingyi Pan of IG said in a commentary.


Meanwhile, Japan reported that its exports fell 5.2% from a year earlier in September while imports slipped 1.5%. The resulting deficit of 123 billion yen ($1.1 billion) reflected weak exports to China, South Korea and other Asian countries, customs data showed.

The mixed performance to start the week is a continuation of the wobbles that ended last week, when the S&P 500 index logged its second straight weekly gain even though stock indexes ended lower on Friday.

Technology companies led the slide, which erased the major U.S. indexes’ gains from the day before. Communication services, industrials and health care stocks also fell, outweighing gains in real estate companies, banks and elsewhere in the market.

Investors are focusing on company earnings reports, searching for a clearer picture on the impact that the trade war between the U.S. and China is having on corporate profits and the broader economy.

The S&P 500 index fell 0.4% to 2,986.20. The index is just 1.3% below its all-time high set in late July.

The Dow Jones Industrial Average dropped 1% to 26,770.20 and the Nasdaq lost 0.8%, to 8,089.54. The Russell 2000 index of smaller stocks gave up 0.4% to 1,535.48.

Uncertainty over the standoff between Beijing and Washington has been roiling markets. Negotiators reached a truce last week that kept the conflict over trade and technology from escalating further, but both sides still have many issues to work out before reaching a substantive deal.

ENERGY: Benchmark crude oil dipped 10 cents to $53.68 a barrel in electronic trading on the New York Mercantile Exchange. It fell 15 cents to $53.78 a barrel Friday. Brent crude oil, the international standard, dropped 20 cents to $59.22 a barrel.

CURRENCIES: The dollar rose to 108.50 Japanese yen from 108.38 yen on Friday. The euro slipped to $1.1158 from $1.1174./gsg

source: business.inquirer.net

Stocks climb as markets cap turbulent quarter with calm end

NEW YORK – U.S. stocks climbed on Monday and gave one last nudge to ensure the S&P 500 emerged from yet another tumultuous quarter with a modest gain.

As has been the case throughout the quarter, movements in President Donald Trump’s trade war with China helped drive the market on Monday. Investors found encouragement after China said that its top trade negotiator will lead talks with the United States that are expected to take place next week. The Trump administration also calmed some worries that it may limit U.S. investment in Chinese companies.

The developments helped push technology stocks higher in particular. Those companies often move along with news about trade because of how reliant they are on China as both a customer and a supplier. The S&P 500 climbed 14.95 points, or

0.5%, to 2,976.74.

The Dow Jones Industrial Average rose 96.58, or 0.4%, to 26,916.83, and the Nasdaq composite added 59.71, or 0.8%, to 7,999.34.

The moves left the S&P 500 with a 1.2% gain for the quarter. While that was its smallest quarterly gain this year, the index had been on track for a much worse performance just a month ago.


Trump shocked markets in August when he said he’d raise tariffs on Chinese goods, and the announcement sent stocks and bond yields reeling. The S&P 500 dropped more than 6% in the weeks following July 26, when it set its last record. But stocks began climbing again in September as both sides made conciliatory moves to ease tensions.

Yields, meanwhile, remained lower for the quarter after the Federal Reserve cut short-term rates twice. They were the first rate cuts for the Fed since the financial crisis was swamping the economy in 2008. Across the Atlantic, the European Central Bank was likewise working to keep rates low in hopes of shoring up a slowing global economy.

The yield on the 10-year Treasury dipped to 1.65% from 1.67% late Friday. At the end of the last quarter, it was at 2%.

Like the S&P 500, the Dow also ended the quarter with a gain of 1.2%. The technology-heavy Nasdaq was a touch lower, with a loss of 0.1%.

Small companies took on more damage, as they typically do when investors are worried about the threat of a recession. The Russell 2000 lost 2.8% during the quarter.

Don’t expect the tumult to end with the close of the quarter.

Aside from the U.S.-China talks, the next three months have plenty of events on the schedule to keep markets on edge. Beyond the United Kingdom’s pending exit from the European Union, investors are also waiting to see whether Germany will enter a recession and how the new incoming head of the European Central Bank performs.

Closer to home, the impeachment inquiry into Trump could create even more uncertainty. That puts more pressure on the consumer, the bulwark of the U.S. economy recently, particularly when businesses have become reluctant to spend due to the trade war.

“The consumer’s been enough to keep the economy moving, but things like consumer confidence seem to be plateauing,” said Emily Roland, co-chief investment strategist at John Hancock Investment Management.

In the next few weeks, companies are scheduled to tell investors how much profit they made during the third quarter. Expectations are generally low again, with analysts forecasting a drop of nearly 4% from a year ago. The results, plus what CEOs say about their spending and revenue forecasts, should give a better picture of the economy’s potential direction.

“We need that earnings engine to kick in to drive markets higher,” Roland said.

Last year, the S&P 500 slumped 14% in the fourth quarter for its worst performance in seven years when fear spiked that the Federal Reserve’s plans to keep raising interest rates and a slowing global economy would knock the United States into a recession.

This time around, the Federal Reserve has shifted gears, and many investors expect the central bank to cut rates at least one more time this year. That could help support markets, even with all the potential flashpoints on the calendar.

Benchmark U.S. crude fell $1.84 to settle at $54.07 per barrel Monday. Brent crude, the international standard, fell $1.13 to $60.78 a barrel.

Natural gas dropped 7 cents to $2.33 per 1,000 cubic feet, heating oil lost 4 cents to $1.91 per gallon and wholesale gasoline fell 5 cents to $1.60 per gallon.


Gold fell $33.40 to $1,465.70 per ounce, silver fell 65 cents to $16.90 per ounce and copper fell 2 cents to $2.56 per pound.

Stock markets around the world were mixed during the quarter, as European growth remained stubbornly weak and Hong Kong saw increasingly violent political protests. In Europe, France’s CAC 40 finished with a 2.5% gain for the quarter. Germany’s DAX rose 0.2%, and the FTSE 100 lost 0.2%.

In Asia, Japan’s Nikkei 225 index rose 2.3% for the quarter, while South Korea’s Kospi fell 3.2% and the Hang Seng in Hong Kong lost 8.6%.

The dollar rose to 108.07 Japanese yen from 107.81 yen on Friday. The euro weakened to $1.0902 from $1.0941. /gsg

source: business.inquirer.net

World shares extend losses ahead of US economic growth data

BANGKOK – Shares edged lower in Europe on Friday following a lackluster day in Asia ahead of the release of U.S. economic growth data later in the day.

Benchmarks fell Friday in Paris, London, Tokyo and Shanghai but rose in Hong Kong and Sydney.


Economists have been upgrading their estimates, with many forecasting that GDP expanded at an annual rate of close to 3% in the first three months of the year. That would be up a full percentage point from previous estimates.

Germany’s DAX was nearly unchanged early Friday at 12,280.80 while the CAC40 in Paris lost 2.33 points to 5,555.34.

Britain’s FTSE 100 fell 0.3% to 7,411.37.

Wall Street looked set for a weak open, with the future contract for the Dow down 0.1% and that for the S&P 500 also off 0.1%.

In Asian trading, concern that China may temper its economic stimulus pulled benchmarks lower for a second straight day.

The Shanghai Composite index fell 1.2% to 3,086.40 while Japan’s Nikkei 225 index slipped 0.2% to 22,258.73.

South Korea’s Kospi declined 0.5% to 2,179.31. Australia’s S&P ASX 200 edged 0.1% higher to 6,385.60, while the Hang Seng in Hong Kong added 0.2% to 29,605.01.

India’s Sensex jumped 0.9% to 39,066.97.

Shares fell in Taiwan, Singapore, Malaysia and Thailand but rose in Jakarta.

China-U.S. trade talks are again on the agenda, for next week in Beijing, with further talks in Washington slated for May 8.

President Donald Trump has said his Chinese counterpart, Xi Jinping, might be visiting the White House soon, but the timing remained unclear. Progress on a deal resolving a conflict over Beijing’s technology policies that has involved billions of dollars in tariffs being imposed on each other’s products would reassure investors who have been rattled by the uncertainty.

In the U.S., earnings reporting season is about a third of the way in, and investors are searching for clues about whether profit growth can accelerate later this year following a weak first quarter.

Analysts are forecasting a drop of 2.8% in earnings for S&P 500 companies this time around, not as bad as the 4% decline they were expecting a few weeks ago.

ENERGY: Benchmark U.S. crude gave up $1.07 to $64.14 per barrel in electronic trading on the New York Mercantile Exchange. It lost 68 cents to $65.21 per barrel on Thursday. Brent crude, the international standard, plunged $1.20 to $72.43 per barrel.

CURRENCIES: The dollar was trading at 111.74 Japanese yen, up from 111.63 yen on Thursday. The euro rose to $1.1141 from $1.1333.  /gsg

source: business.inquirer.net

China tries to reassure on economy, cuts growth target

BEIJING, China — China’s leadership tried to quell anxiety about its slowing economy following financial turmoil and rising labor unrest as it cut its growth target Saturday and promised to open the oil and telecom industries to private competitors in sweeping industrial reforms.

Premier Li Keqiang announced a growth target of 6.5 to 7 percent in a report to the national legislature on Beijing’s plans for the year. That was down from last year’s “about 7 percent” and reflects the ruling Communist Party’s marathon efforts to replace a worn-out model based on trade and investment with more self-sustaining growth driven by consumer spending.

Li, the country’s top economic official, warned that China faces “more and tougher problems,” including weak export demand. But he expressed confidence that communist leaders can maintain stable growth.

“China has laid a solid material foundation and its economy is hugely resilient,” the premier said in an address to nearly 3,000 delegates to the National People’s Congress, a 12-day affair that kicked off Saturday. “As long as we work together as one to surmount all difficulties, we will definitely achieve the targets for economic and social development in 2016.”

In a wide-ranging speech lasting nearly two hours, Li said Beijing will “oppose separatist activities” in Taiwan, the self-ruled island China claims as part of its territory. He announced no new initiatives following the recent election of Taiwanese President Tsai Ying-wen, who takes office in May.

A separate budget report released Saturday confirmed that military spending will rise 7.6 percent, which comes at a time of tensions with China’s neighbors over disputed portions of the South China Sea. The military budget of 954 billion yuan ($146.5 billion) keeps China in second place in global defense spending behind the United States.

The premier promised more measures to clean up China’s badly polluted air, water and soil, and more spending on science and industrial research and development to create technology and better-paying jobs.

Chinese leaders are struggling to reassure the public and global markets about their ability to steer the world’s second-largest economy following a plunge in stock prices and currency turmoil. Spreading protests by laid-off workers have fueled questions about whether Beijing can manage its ambitious economic transition.

The latest growth target is the minimum Chinese leaders say is required to achieve the official goal of doubling average incomes from 2010 levels by 2020. Economists warn anything higher could set back reforms by forcing Beijing to prop up growth with more wasteful investment.

Last year’s economic growth declined to a 25-year low of 6.9 percent. Private sector forecasts suggest even achieving Li’s lower target will be a challenge. The International Monetary Fund expects this year’s growth to drift down to 6.3 percent.

The party’s reform plans require it to cut the dominance of state companies that dominate industries from banking and telecommunications to oil and steel, and give entrepreneurs a bigger role.

Li promised to open electric power, telecommunications, transportation, oil, natural gas and municipal utilities to private competition, though he failed to say whether foreign companies might be allowed in. He said private companies would receive the same treatment as state-owned enterprises in project approval, finance and tax policy.

“We must deepen reform across the board,” the premier said. He said the market “must play a decisive role.”

Delegates to the ceremonial legislature, which routinely endorses ruling party plans in near-unanimous votes, praised the plans.

“If the 6.5 to 7 percent growth should be solid and real, I think it’s very acceptable,” said Liu Gexin, a delegate from Sichuan province in the southwest.

Others were more breathlessly enthusiastic.

“It’s an exhilarating report. It’s a mobilization order,” said delegate Zhu Liangyu from Beijing. “I completely agree with it.”

Li promised to open service and manufacturing industries wider to foreign investors, but gave no details. He promised that regulations would be made “more fair, transparent and predictable” to attract investment. Business groups have complained that Chinese regulators are hampering access to promising sectors in violation of free-trading pledges.

Much of China’s slowdown has been self-imposed as regulators clamped down on a building boom and nurtured retailing, tourism and other service industries. An unexpectedly sharp downturn over the past two years has raised the risk of politically dangerous job losses and prompted Beijing to shore up growth with mini-stimulus efforts.

Despite repeated official denials, widespread expectations that Beijing will weaken its yuan to boost exports that forecasters say shrank by as much as 20 percent in February has driven an outflow of capital that spiked to a record $135 billion in December.

This past week, Moody’s Investors Service cut its outlook on China’s government credit rating from stable to negative, citing rising debt, capital outflows and “uncertainty about the authorities’ capacity to implement reforms.”

In comments Friday reported by the government’s Xinhua News Agency, a Chinese deputy finance minister retorted that Moody’s was wrong and shortsighted.

Communist leaders have tried to shift public attention away from the growth target. They say their priority is jobs and so long as the economy generates enough, they will accept slower growth.

The downturn and Beijing’s reforms have wiped out jobs in mining, steelmaking and other industries.

Retailing, e-commerce and other service industries are growing and absorbing some idled workers, but others are struggling to find work. The government says the economy created 13 million new jobs last year, but has not said how many were lost.

The China Labor Bulletin, a research group in Hong Kong, reported 2,606 labor disputes last year, nearly twice as many as 2014’s 1,379.

The premier pledged to boost consumption in areas such as elder care and health services and to link traditional businesses to the Internet. China has the world’s biggest population of Internet users, and investors are pouring billions of dollars into developing online and smartphone-based ventures for food delivery, movie ticketing, travel and other services.

The government hopes such services can help propel consumption that grew to 44.5 percent of the economy last year from 2014’s 36.8 percent.

Li said the government hopes to generate at least 10 million new jobs this year as part of plans to create 50 million in the five years through 2020.

The premier pledged to accelerate “supply-side reform,” or the painful process of shrinking bloated industries from steel to cement and aluminum. That glut has led to price-cutting wars that are driving companies into bankruptcy. Steel producers have responded by exporting their surplus, prompting complaints by China’s trading partners.

Li said Beijing will promote mergers and shut down “zombie enterprises” — companies that are kept afloat by cheap loans from state banks.

The premier said targets will include the coal and steel industries, for which plans already were announced in February, but didn’t give details of other sectors that will be affected.

source: business.inquirer.net

Asian shares broadly higher on Wall Street lead

HONG KONG—Asian markets were mostly higher on Tuesday as Wall Street provided a positive lead following upbeat US data before a closely watched Federal Reserve meeting.

The dollar eased against the yen but remained up from Monday’s levels in Asia, as investors wait to see whether the Fed will announce a cut in its massive stimulus program after a two-day meeting.

Tokyo rose 0.83 percent, or 125.72 points, to 15,278.63, Sydney closed up 0.27 percent, or 13.6 points, at 5,103.2 and Seoul ended 0.23 percent, or 4.59 points, higher at 1,965.74.

But Hong Kong lost 0.20 percent, or 45.43 points, to end at 23,069.23 and Shanghai fell 0.45 percent, or 9.78 points, to 2,151.08.

Global markets have mostly fallen over the past week as investors speculate about the future of the Fed’s $85 billion a month bond-buying program, which has helped fuel an equities rally since it was unveiled in September last year.

But as the US central bank prepares for a two-day meeting starting Tuesday, investors in most markets picked up cheap stocks after another set of positive US figures showing industrial output surged a solid 1.1 percent in November.

Also Monday, preliminary data indicated US manufacturing expanded for a fourth consecutive month in December.

On Wall Street the Dow rose 0.82 percent, the S&P 500 gained 0.63 percent and the Nasdaq picked up 0.71 percent.

Markit Economics also said business activity in the 17-nation eurozone ticked up in December, although there was still weakness in France.

Market-watchers said traders had priced in any reduction in the US stimulus following upbeat data, including on unemployment and economic growth, as well as the expected passage of a bipartisan budget deal through Congress that will avert another government shutdown.

“Over the past week or so, the implied probability of ‘tapering’ by the Fed has increased. The US budget deal and better retail sales for November were some of the catalysts for a change in sentiment toward tapering happening at the December (Fed) meeting,” said analysts at Nomura in a research note.

It added that 37 percent of polled clients expected the move this month, slightly more than those forecasting a January move.

“It has been priced with a very high probability for one of the next three meetings, and it may not matter greatly if the tapering starts in December, or in January or March.”

In the forex market the dollar dipped slightly against the yen but remained higher than its Monday levels in Tokyo. It had suffered a sell-off Friday after hitting a five-year high of 103.93 yen.

The greenback was at 102.98 yen in afternoon trade, against 103.02 yen late in New York after slipping to 102.62 yen at one point Monday. The euro was quoted at $1.3776 and 141.84 yen against $1.3761 and 141.77 yen.

Oil prices dipped, with New York’s main contract, West Texas Intermediate for January delivery, down 28 cents at $97.20 in afternoon trade. Brent North Sea crude for February eased 36 cents to $109.35.

Gold fetched $1,239.20 at 1135 GMT compared with $1,229.05 late Monday.

In other markets:

– Taipei rose 0.47 percent, or 39.06 points, to 8,352.93.

Taiwan Semiconductor Manufacturing Co. added 1.47 percent to Tw$103.5 while smartphone maker HTC was 0.34 percent higher at Tw$145.5.

– Wellington fell 0.16 percent, or 7.59 points, to 4,728.02.

Air New Zealand was down 0.61 percent at NZ$1.625, Telecom slipped 1.49 percent to NZ$2.32 while Warehouse Group added 1.66 percent to NZ$3.68.

– Singapore closed up 0.45 percent, or 13.80 points, at 3,067.57.

United Overseas Bank added 0.35 percent to Sg$20.13 while Asian Media group Singapore Press Holdings rose 0.75 percent to Sg$4.02.

– Manila climbed 2 percent, or 116.45 points, to 5,928.99.

Philippine Long Distance Telephone gained 0.46 percent at 2,646 pesos while Ayala Corp. added 2.10 percent at 536 pesos.

– Jakarta ended up 1.37 percent, or 56.39 points, at 4,182.35.

State miner Aneka Tambang gained 0.88 percent to 1,140 rupiah, while mobile phone operator Telekomunikasi Indonesia lost 1.20 percent to 2,050 rupiah.

– Bangkok edged up 0.66 percent, or 8.78 points, to 1,337.18.

Coal producer Banpu rose 3.94 percent to 33 baht, while Bangkok Bank gained 1.09 percent to 185 baht.
– Kuala Lumpur added 0.71 percent, or 13.02 points, to 1,850.90.

Axiata ended 1.8 percent higher at 6.87 ringgit while DiGi.com gained 1 percent to 4.92. Telekom Malaysia dropped 0.5 percent to 5.51 ringgit.

– Mumbai slid 0.23 percent, or 47.38 points, to 20,612.14, its sixth straight day of declines.

HDFC Bank fell 3.55 percent to 658.45 rupees while the world’s largest coal miner Coal India declined 2.89 percent to 278.6 rupees.—With Dow Jones Newswires

source: business.inquirer.net