Asian Markets Retreat; Alibaba Group Fined

12/04/2021 Equities markets in Asia faltered on Monday as corona virus surge in many places worries investors, while some market participants wait to see if U.S. earnings can justify sky-high valuations. China’s technology giants are expecting increased scrutiny and penalties after Alibaba’s record $2.8bn fine on Saturday for antitrust violations. Shares in China and Hong Kong underperformed, even though Alibaba Group skyrocketed over 8.0% as the fine was lower than feared. Tencent is 1.50% down in Hong Kong. Global stocks hit record highs on Friday as tech shares on Wall Street cheered receding US inflation fears with the lack of inflation pressure keeping bond yields near two-week lows.

JSE closed firmer 0.20% on Friday, while global markets were mixed as investors weighed the US Federal Reserve’s dovish stance against the ongoing battle with the pandemic. Top-40 gained 0.25% and the banks rose 1.02%, with Investec leading the gains up 1.63%. In the mining sector, Impala Platinum fell the most, down 2.56% to R282.62. Concerns over the sluggish vaccine rollout in Europe and its impact on the region’s economic recovery are dragging on risk sentiment, overshadowing the dovish Fed.

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European markets finished the week mixed: the pan-European Stoxx 600 was up 0.08%, alongside a 0.21% advance for the German Dax, while the London’s FTSE100 slipped 0.38% at the close. British American Tobacco was knocked 2.54% lower by a downgrade to ‘neutral’ at JPMorgan.

U.S. equities rose to a fresh all-time high on Friday as mixed economic data and commentary from the Federal Reserve strengthened the case for continued policy support from the central bank. The Dow advanced 0.87% at the close, whit the S&P500 striding 0.77% and the Nasdaq marching along to gain 0.51% at the end of the day. U.S futures pulled back on Monday:- Dow futures off 0.34%, S&P500 futures doen 0.29%, while the Nasdaq futures are 0.15% in the red.

Some key events to watch this week:
• Banks and financial firms begin reporting first-quarter earnings, including JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp., Morgan Stanley, Goldman Sachs Group Inc.
• U.S. officials and company executives are due to discuss the global shortage of computer chips on Monday.
• The U.S. releases inflation data Tuesday.
• Chinese trade data are scheduled for Tuesday.
• U.S. Federal Reserve releases Beige Book on Wednesday.
• U.S. data including initial jobless claims, industrial production and retail sales come Thursday.
• China economic growth, industrial production and retail sales figures are on Friday.

MSCI’s broadest index of Asia-Pacific shares outside Japan was off 0.6% in slow trade. Tokyo’s Nikkei edged down 0.57%, Hang Seng on the backfoot 0.87%, China’s Shanghai index unperforming at 1.57%, while Australia’s ASX200 is sitting with moderate losses of 0.37% on Monday. The declines in Asia followed a strong end last week on Wall Street, where gains in technology and healthcare stocks pushed the S&P 500 and Dow Jones Industrial Average to fresh record highs.

Oil down as covid-19 remains a threat to fuel demand recovery. Brent futures off 0.29% at $62.77, while U.S. WTI futures are down 0.25% at $59.16. Gold futures were down 0.28% at $1738.93, stronger-than-expected data (U.S. March’s PPI) suggests that inflation will be picking up faster-than expected in the months to come – leading to a rise in real yields, exerting pressure on gold.