European shares rise for third day, boosted by BP

June 12, 2010 By Leave a Comment

LONDON, June 11 (Reuters) – European shares edged higher on Friday, rising for the third day on optimism over global growth, while BP (BP.L) recovered on hopes it dividend might be deferred rather than cut as it continued battling an oil spill.

By 0845 GMT, the pan-European FTSEurofirst 300 .FTEU3 index of top shares was up 0.4 percent at 1,017.93 points. The index is down around 8.6 percent from a mid-April peak on concerns about the euro zone debt crisis.

British energy group BP gained 5.9 percent following recent sharp losses on hopes its dividend might be deferred rather than cut.

The Wall Street Journal reported the British oil company was considering deferring or reducing its second quarter dividend to help quell the political uproar in the United States over the environmental disaster caused by the massive spill.

British newspapers also rounded on U.S. President Barack Obama over his criticism of the company.

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Graphic on the Gulf oil spill.

r.reuters.com/qam39k

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However, analysts suggested rises in BP shares could be limited. U.S. government scientists doubled their estimate of the amount of oil gushing out of its ruptured Gulf of Mexico well. The stock is still down 43 percent since the oil spill started mid-April.

“BP is just a high beta trade and if investors want to take more risk then they will invest in the stock as it will go higher than the rest,” said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels.

“European shares are modestly higher given a strong rebound in Asia. I think it is a bear market rally as the sovereign debt problems can not be solved in a couple of days.”

Banks added to the previous session gains on the global growth optimism. Banco Santander (SAN.MC), BNP Paribas (BNPP.PA) and UBS (UBSN.VX) rose 1.6 to 2.6 percent.

NOVARTIS GAINS

Drugmakers featured among the top performers. Novartis (NOVN.VX) gained 2.3 percent after its multiple sclerosis pill Gilenia won strong backing from a U.S. advisory panel.

On the downside, the mining sector featured among the worse performers. Australian Prime Minister Kevin Rudd denied on Friday talk of a swift deal with miners over his controversial mining tax, as global miner BHP Billiton rejected a rumoured compromise affecting the nation’s top export sector.

Anglo American (AAL.L) and Rio Tinto (RIO.L) fell 0.6 and 1.1 percent respectively.

Across Europe, the FTSE 100 .FTSE index was up 0.1 percent, Germany’s DAX .GDAXI was down 0.2 percent and France’s CAC 40 .FCHI was up 0.3 percent.

Spain’s IBEX 35 .IBEX gained 1.8 percent, Portugal’s PSI 20 .PSI20 rose 0.4 percent and Italy’s benchmark was up 0.3 percent. (Editing by Hans Peters)

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China stocks close at 3-mth high, HK inches up

April 15, 2010 By Leave a Comment

HONG KONG/SHANGHAI, April 14 (Reuters) – China’s main stock index edged up 0.16 percent on Wednesday to its highest close in three months for a second straight session as investors bought large-cap shares in preparation for the launch of China’s first index futures on Friday.

Afternoon gains in Shanghai helped Hong Kong shares reverse early losses to end flat. Lenovo Group (0992.HK) ended higher after a bullish forecast from Intel Corp (INTC.O) slightly offsetting profit-taking in airlines on fading optimism for a one-time revaluation for the yuan.

The Shanghai Composite Index .SSEC finished at 3,166.183 points after Tuesday’s 1.02 percent rise, as institutional investors increased their holdings in index heavyweights to have a bigger say in pricing index futures.

The CSI300 Index .CSI300, which covers the 300 largest companies by daily turnover and market capitalisation on the Shanghai and Shenzhen stock exchanges, outperformed the broader market with a 0.35 percent gain.

Large-cap Zijin Mining (601899.SS) was Wednesday’s most actively traded stock, closing up 2.91 percent, boosted by a rise in global gold prices. [ID:nSGE63D03E]

“The market is now testing the waters for a shift in focus to large caps from small caps,” said Cheng Yi, stock analyst at Xiangcai Securities in Shanghai.

Cheng and other analysts expect the launch of index futures to spark a market rally led by blue chips, allowing the index to test the psychologically important barrier at 3,200 points, which has not been reached since mid-January.

“As the launch of index futures draws near, large caps will become increasingly active, pushing the index gradually higher,” said Guodu Securities analyst Zhang Xiang.

Gaining Shanghai A shares outnumbered losers by 631 to 255, while Wednesday’s Shanghai A-share turnover fell to 138 billion yuan ($20.22 billion) from Tuesday’s 184 billion.

Nearly all 14 banks listed on the Shanghai and Shenzhen stock exchanges fell. Top lender Industrial and Commercial Bank of China (601398.SS) dropped 0.8 percent, hit by profit-taking after outperforming the market during the previous day’s rally.

Precious metals producer Shijiazhuang Baoshi Electronic Glass Co (000413.SZ) was the day’s biggest gainer, surging its 10 percent daily limit on the back of rising global precious metals prices.

HONG KONG INCHES HIGHER

The benchmark Hang Seng Index .HSI ended up 0.08 percent or 17.9 points at 22,121.43, after falling 0.06 percent in morning trade.

The China Enterprises Index .HSCE of top locally listed mainland Chinese stocks closed up 0.02 percent at 12,842.47.

Turnover fell sharply to a near three-week low of HK$58 billion ($7.47 billion) from Tuesday’s HK$73.7 billion.

“Most investors have a wait-and-see attitude,” said Peter Lai, director at DBS Vickers. “In the past few days, funds were flowing into Hong Kong on hopes of an appreciation of the renminbi … but after Hu Jintao’s visit to the United States there seems to be nothing concrete disclosed.”

During a meeting with U.S. President Barack Obama, President Hu said on Tuesday that China would stick to its own path for yuan CNY=CNFX reform, sending Hong Kong stocks lower.

Lenovo Group (0992.HK), the world’s No.4 PC brand, bucked the downward trend, soaring 5.3 percent to a near three-month high, after sector bellwether Intel (INTC.O) issued sales and margin forecasts that trounced Wall Street expectations, reinforcing hopes for an acceleration in the technology sector’s recovery. [ID:nN1382801]

Airlines were among the worst-hit after the sector’s rapid rise in the last week on hopes that a one-time revaluation of the yuan would boost their outlooks as airlines usually buy aircraft and fuel in dollars.

China Eastern (0670.HK) fell 3.8 percent, while Air China (0753.HK) lost 2.4 percent.

Hong Kong’s benchmark stock index has gained 4 percent since the start of April, driven by hopes of an appreciation of the yuan, and is up 13 percent from the 2010 low on Feb. 8.

“Investors are waiting for economic data tomorrow,” said Castor Pang, research head at Cinda International. “If the data indicates China’s economic growth will continue with smaller-than-expected inflationary pressure, we see a chance of breaking through the current resistance level of 22,400.”

The Chinese economy is likely to have grown 11.5 percent in the first quarter, a Reuters poll of 25 analysts showed, its fastest year-on-year growth since the third quarter of 2007. [ID:nSGE6380C6]

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China stocks edge up to fresh 3-month closing high

April 15, 2010 By Leave a Comment

SHANGHAI, April 14 (Reuters) – China’s main stock index edged up 0.16 percent on Wednesday to its highest close in three months for a second straight day as investors bought large-cap shares in preparation for the launch of China’s first index futures on Friday.

The Shanghai Composite Index .SSEC finished at 3,166.183 points after Tuesday’s 1.02 percent rise, as institutional investors increased their holdings in index heavyweights to have a bigger say in pricing index futures.

The CSI300 Index .CSI300, which covers the 300 largest companies by daily turnover and market capitalisation on the Shanghai and Shenzhen stock exchanges, outperformed the broader market with a 0.35 percent gain.

Large-cap Zijin Mining (601899.SS) was Wednesday’s most actively traded stock, closing up 2.91 percent, boosted by a rise in global gold prices. [ID:nSGE63D03E]

“The market is now testing the waters for a shift in focus to large caps from small caps,” said Cheng Yi, stock analyst at Xiangcai Securities in Shanghai.

Cheng and other analysts expected the launch of the index futures would spark a market rally led by blue-chips, allowing the index to rise to test the psychologically important barrier at 3,200 points, which has not been reached since mid-January. ($1 = 6.83 yuan) (Reporting by Lu Jianxin and Edmund Klamann)

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Rupee may strengthen sharply

May 26, 2009 By Leave a Comment

Mumbai:

The election outcome could be bad news for exporters at a time when exports have been tumbling on a monthly basis. The rupee is set to strengthen sharply against the dollar in the coming weeks and could even touch 46 by December this year.

“We think that the positive impact on capital inflows will help buoy the INR and we reiterate our three, six and 12-month USD/INR targets of 49.2, 47.3, and 46.0,” said Tushar Poddar of Goldman Sachs. When the rupee strengthens, exporters would get lesser amount in rupees after conversion. Exports had fallen 33 per cent in April in the wake of the global economic slowdown.

Although trade was cautious ahead of the weekend release of election results, the rupee closed at 49.41/42 per dollar as against 49.28/29 in the previous week. With the UPA coalition winning the election, the rupee is likely to move up. “The rupee is likely to track the stock market rally. Inflows are likely to increase in the coming months following the decisive victory of the UPA government said a dealer.

The rupee has rebounded from its March lows, mainly powered by a revival in global risk appetite. Foreign funds have moved $1.9 billion in to Indian stocks so far this month, after net buying of $1.5 billion in April. Those inflows have helped lift the rupee 5.6 per cent from a record low of 52.2 in early March.

Meanwhile, corporate bond spreads have fallen to pre-September 2008 levels, and the banking system is awash with liquidity as deposit growth has outpaced credit growth. Indeed, banks deposited a record $25 billion on average last week at the reverse repo window of the Reserve Bank of India. The heavily hit real estate sector has in recent weeks been able to raise large amounts of funding from capital markets, Goldman Sachs said.

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Wall Street soars on tech bets and JPMorgan

April 18, 2009 By Leave a Comment

NEW YORK (Reuters) – Stocks surged on Thursday as expectations of reassuring results from bellwethers, including Google, lifted technology shares, while JPMorgan’s better-than-expected profit added to bank stabilization hopes.

Investors, encouraged by recent signs the economic slump may be abating, bet that technology earnings would show upside surprises, driving Google’s stock up 2.4 percent to $388.74 ahead of the Web search leader’s results after the close.

And indeed, Google delivered by reporting a stronger-than-expected first-quarter profit. Its stock popped up 5 percent to $408.00 in after-hours trading following the results and then slipped to $385.41.

During the regular session, Hewlett-Packard (HPQ.N) rose 5 percent to $36.60, while International Business Machines Corp (IBM.N) gained 2.6 percent to $101.43. On Nasdaq, Apple Inc (AAPL.O) shares climbed 3.2 percent to $121.45. The semiconductor index .SOXX rose 3.4 percent.

“People are starting to feel that maybe there’s a slight chance this is not just a bear market rally,” said John O’Brien, senior vice president at MKM Partners LLC in Cleveland, referring to the market’s 28 percent rebound since the 12-year closing low of March 9.

“People are anticipating a pretty good number from Google,” O’Brien told Reuters ahead of Google’s earnings report. “They seem to like to under-promise and over-deliver.”

The Dow Jones industrial average .DJI rose 95.81 points, or 1.19 percent, to 8,125.43. The Standard and Poor’s 500 Index .SPX gained 13.24 points, or 1.55 percent, to 865.30. The Nasdaq Composite Index .IXIC jumped 43.64 points, or 2.68 percent, to 1,670.44.

Before the bell, JPMorgan’s results beat analysts’ expectations as debt trading and underwriting revenue surged. For details, see [ID:nN16542451] The news got Wall Street’s day off to a solid start, adding to a string of encouraging results from other banks, including Wells Fargo’s (WFC.N) strong preliminary figures last week.

Regions Financial (RF.N) said it will post a first- quarter profit, pushing the regional banking company’s shares up 34 percent to $6.70.

Shares of JPMorgan climbed 2.1 percent to $33.24, while Citigroup (C.N) , due to post quarterly results on Friday, rose 1.01 percent to $4.01. The KBW Bank index .BKX rose 2.1 percent.

In a sign that investor fear may be receding, the CBOE Volatility Index .VIX, or VIX, dropped for a third straight day, hitting its lowest close since late September.

ROSETTA JUMPS AND ‘HOG’ FLIES

Additionally, Rosetta Stone Inc’s (RST.N) strong debut suggested equity investors were becoming more willing to take on risk. Rosetta Stone’s initial public offering was only the third to price this month, making April the best month since last July.

Rosetta Stone jumped to $25.12 on the New York Stock Exchange — up 40 percent from its IPO price of $18. Also boosting sentiment were stronger-than-expected quarterly results from Harley-Davidson Inc (HOG.N), which boosted consumer spending hopes.

The motorcycle maker’s shares rose 5.7 percent to $18.11.

Optimism about the technology sector also received a boost from cell phone maker Nokia’s (NOK1V.HE)(NOK.N) after its announcement that a drop in demand for its products was stabilizing, driving its shares up 11.4 percent to $14.88 on the NYSE.

But in one sign of the recession’s impact on consumers, General Growth Properties Inc GGP.N, the second-largest U.S. mall owner, on Thursday filed for Chapter 11 bankruptcy protection, making it one of the biggest victims of the credit crisis yet.

The day’s economic data provided a mixed picture. The Philadelphia Federal Reserve’s survey of regional manufacturing showed a less drastic contraction, while the Commerce Department data showed March housing starts fell 10.8 percent to a seasonally adjusted annual rate of 510,000 units, the second lowest on record dating back to 1959.

Trading was active on the New York Stock Exchange, where about 1.61 billion shares changed hands, above last year’s average daily volume of 1.49 billion. On the Nasdaq, about 2.37 billion shares traded, above last year’s average daily volume of 2.28 billion.

Advancers outnumbered decliners on the NYSE by a ratio of about 4 to 1, while on the Nasdaq, more than two stocks rose for every one that fell.

(Editing by Jan Paschal)

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NYSE CEO says “real money” investors sat out March rally: report

April 17, 2009 By Leave a Comment

LONDON (Reuters) – “Real money” investors sat out the March stock market rally and are probably waiting for a second one around June or July, the head of the world’s biggest stock exchange, NYSE Euronext (NYX.N), said in a newspaper interview.

“The real money investors are still waiting. I think they’re waiting, they’re watching. They want to make sure that what we saw in March is real,” NYSE Chief Executive Duncan Niederauer was cited as saying by the Financial Times newspaper on Thursday.

“And I think once they are convinced, you will know it. The market will have a totally different tone to it.”

Niederauer’s comments came after the U.S. benchmark Standard and Poor’s 500 index .SPX rose 8.5 percent in March, its best month since October 2002.

According to the FT, he said the rally was driven by short-term traders trying to take advantage of high volatility and that he sensed that volumes were below the level that would indicate that investors had regained confidence in the fundamentals of the market.

“I think we’re waiting for another rally, in my opinion, in around June or July,” the newspaper reported him saying.

(Reporting by Andrew Callus; Editing by Alison Williams, Leslie Gevirtz)

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US stocks fall as quarterly earnings season begins, oil falls

April 8, 2009 By Leave a Comment

New York – US stocks lost ground for a second day as oil prices fell and analysts on Tuesday suggested a rally that lasted through much of March was unsustainable in the current economy.

The selloff came as the first quarterly earnings reports for 2009 were due to be announced.

Company profits were expected to drop about 37 per cent, according to a survey of Wall Street analysts by the Bloomberg financial news agency. It would be the seventh straight quarter of falling earnings.

Aluminium giant Alcoa Inc reported a first-quarter loss of 497 million dollars late Tuesday, after posting a profit of 303 million dollars in the same quarter of 2008. The report marked Alcoa’s second-straight quarterly loss.

Crude oil prices dropped 3.7 per cent to 49.15 dollars per barrel in New York, driving down shares of Exxon Mobil Corp and ConocoPhillips Inc.

US stocks have rallied nearly 20 per cent since reaching 12-year lows in early March, as investors took some better-than-expected industry figures as a sign that the US economy may have hit bottom. But some investors are now suggesting the buy-up has been premature.

“It’s a bear-market rally because we have not yet turned the economy around,” billionaire George Soros told Bloomberg Television.

The United States is in the midst of one of its longest recessions since the Great Depression.

The blue-chip Dow Jones Industrial Average lost 186.29 points, or 2.34 per cent, to 7,789.56. The broader Standard and Poor’s 500 Index was down 19.93 points, or 2.39 per cent, to 815.55. The technology- heavy Nasdaq Composite Index tumbled 45.1 points, or 2.81 per cent, to 1,561.61.

The US currency rose against the euro to 75.37 euro cents from 74.52 euro cents on Monday. The dollar dropped against the Japanese currency to 100.47 yen from 101.04 yen. dpa

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GLOBAL MARKETS – World stocks rise after U.S. jobs data

April 5, 2009 By Leave a Comment

European stocks rose, Wall Street was set for a firmer opening and government bonds slipped on Friday after closely-watched data showed the U.S. economy lost 663,000 jobs, not so far from the forecast.

The unemployment rate rose to 8.5 percent, its highest since 1983.

While the data highlighted the growing distress in the labour market, investors were relieved the economy did not lose more jobs than they feared.

“It gives the market a sense that we dodged a bullet in the very, very near term. It’s positive in that it wasn’t a blowout number of more than 750,000,” said Peter Kenny, managing director of Knight Equity Markets in Jersey City, New Jersey.

“All the indexes are higher because the market is breathing a sigh of relief because it wasn’t a blowout of market psychology. It indicates a slackening of the rate of decline and leaves the bear market rally intact.”

The MSCI world equity index was up a quarter percent. The FTSEurofirst 300 index rose 0.15 percent on the day, while emerging stocks were up 0.6 percent.

U.S. stock futures were pointing to a firmer open on Wall Street later.

Broad gains in the equity market come a day after Group of 20 leaders presented a united front to combat the financial crisis, sending risky assets higher.

At their London summit, G20 leaders pledged $1.1 trillion of additional funds to the International Monetary Fund and other institutions and to boost trade finance.

World stocks have risen more than 20 percent since hitting a 5-1/2 year low in March and investors are closely watching if the rally could be sustainable this time even with some consolidation.

“There is still a lot of volatility and I think these ambiguous ups and downs are typically what happens when the market is starting to turn around,” said Bernard McAlinden, strategist at NCB Stockbrokers.

“We had a good day yesterday. The G20 was less vague than probably the market had been expecting and the IMF deal will be good for European equities. There has also been a lot of mixed economic data.”

U.S. crude oil fell 1 percent to $52.16 after surging 9 percent on Thursday.

The June bund futures fell 42 ticks.

The dollar was steady against a basket of major currencies while the low-yielding yen lost 0.4 percent to 100.07 per dollar .

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Oil jumps 8 pct as G20 deal boosts markets

April 3, 2009 By Leave a Comment

Oil rose 8 percent to $52 a barrel on Thursday, in line with a broad rally in global markets, on hopes actions agreed at the G20 summit in London would restore global growth.

World leaders agreed a trillion-dollar deal to combat the deepest economic downturn since the Great Depression, and signed off on plans to commission blacklists of tax havens and tighter rules for hedge funds.

U.S. stock markets surged more than 4 percent on news of the deal, which also gives banks more flexibility to value toxic assets.

U.S. crude traded up $4.01 to $52.40 a barrel by 2:23 p.m. EDT (1823 GMT), while London Brent crude gained $4.18 to trade at $52.62 a barrel.

“The current crude oil market rally is associated with some optimism and expectations emerging from the G20 meeting in London,” said Kyle Cooper, director of research at IAF Advisors in Houston.

“However, rising oil prices right now are not based on fundamentals as worldwide demand is still poor while inventories are high.”

The economic crisis has battered global oil demand, pushing prices off record highs over $147 a barrel hit in July and sending inventories in top consumer the United States to a 16-year high.

The head of the International Energy Agency said the energy advisor to 28 developed nations is likely to lower its global oil demand forecasts significantly as more bleak economic data emerges.

“We now have data from not only the IMF, but also the OECD. They all look gloomy,” Nobuo Tanaka, the agency’s executive director, told Reuters in an interview on the sidelines of a Paris conference.

“Inevitably, the possible downward revision could be significant, but I cannot say how big.”

OPEC kingpin Saudi Arabia expects demand from developed countries will continue to decline, although global demand may revive later this year if the economy improves, an oil official said.

“This pattern of decline within industrialized economies is expected to continue even after the global economic crisis is over,” said Ibrahim Muhanna, adviser to Saudi Arabia’s petroleum and mineral resources ministry.

OPEC Secretary General Abdullah al-Attiyah said the cartel may be able to live with oil prices around $50 a barrel in 2009, another sign the group has limited its price aspirations for now.

U.S. Labor Department data showed the number of U.S. workers filing new claims for jobless benefits unexpectedly rose to its highest level in over 26 years last week and so-called continued claims jumped to a record high in March.

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