Asia-pacific stocks retreat as corona virus Delta-strain casts shadow over growth

06/08/2021 Equities markets in Asia dipped on Friday, failing to catch lead from Wall Street as the spread of the Delta variant of the coronavirus across the region heightened worries about the its economic recovery. The Nasdaq and S&P 500 closed at record levels on Thursday after a spate of strong corporate earnings and a further decline in U.S. unemployment claims. Eyes are now on the jobs report for July due later today. Shares fell in Hong Kong and China. Japan fluctuated, with Nintendo Co. weighing after a profit miss. U.S. futures remained steady. The dollar was supported on Friday in the lead up to the release of U.S. employment data; the Euro lost about 0.41% on the dollar this week, and was last seen drifting around $1.1821. The rand dipped, from R14.3820, to R14.7500 levels after the announcement of the new South African parliamentary executive – cabinet reshuffle. The local currency is currently on the backfoot 0.93% to the dollar at R14.5200.

Gold headed for a weekly drop as investors awaited a key U.S. jobs report on Friday for clues on the Federal Reserve’s monetary policy path. The bullion has been trading in a narrow range this week, currently keeping head above $1800 level mark.
Crude oil headed for its biggest weekly loss on demand risks from Covid-19; Brent crude dropped 6.46% this week, while U.S. WTI slipped 6.6% for the comparative period. Currently, brent is drifting around $71.39%, while WTI is hovering below $70 a barrel.

The JSE dipped 0.76% to 68,371.23 points and the Top-40 0.88%, on Thursday. Banks and financially rallied, cushioning the loss of miners and Naspers on the local bourse. Banks rose 4.55% and financials 3.42%. Industrial metals dropped 3.79%, resources 3.63% and precious metals 3.59%. Nedbank led the gains in its sector, rising the most since May 2020, up 9.33% to R188.40. Absa added 8.28% to R148.92, FirstRand 4.55% to R57.50, Standard Bank 4.19% to R131.65, Investec 2.30% to R58.19 and Capitec 1.07% to R1,703.06. Markets now await US nonfarm payroll data on Friday. Top-40 futures marginally up 70points, IG makerts.

NEWS:
• Platinum Slumps to Seven-Month Low as Virus Spread Saps Demand
• Eskom Is Seeking $2.3 Billion From Development Institutions
• China Imposes Restrictions; Melbourne in Lockdown: Virus Update
• Tencent Resumes WeChat Signups As Gaming Concerns Persist
EQUITY PREVIEW:
• S. Africa Locally Focused Stocks Rally After Nedbank, Woolworths
• Sibanye Sees 1H Income More Than Doubling as Output Recovers
• Bid Corp Cut to Hold at Investec; PT 350 rand
• JSE 1H Net Income 347.6M Rand Vs. 485.3M Rand Y/y
• Arrowhead Estimates Its Damage From S. Africa Riots at 15m Rand
• Nedbank’s Earnings Jump Bodes Well for S. African Banks Sector
• Glencore Results ‘Strong’; Citi Sees Bigger Buybacks Ahead
• Mondi Shares Rise; Analysts Say 2Q Shows Good Momentum
• Sappi Reports 9-Month Loss $22m Vs Loss $47m; Shares Slump
• Nedbank Soars to Feb. 2020 High as Lender Sees 1H Earnings Jump
• Woolworths Sees FY EPS Up More Than Sevenfold; Shares Jump
• Iron Ore Miners to Ship 5.1% More in 3Q Than Prior Q: Bernstein
• Oil Climbs, Iron Down, Glencore Profit: EMEA Resources Premarket
• Aspen Names Sean Capazorio as Group CFO and Executive Director
• Glencore Announces $0.04/Share Special Dividend, $650M Buyback
• Mondi 1H Net Income EU348M Vs. EU349M Y/y
• Follow Glencore First-Half Earnings in TOPLive
• Richemont Nominates Jasmine Whitbread, Patrick Thomas to Board
MEDIA SUMMARIES:
• Business Day.za: Transnet websites still down two weeks after cyber attack
• Business Day.za: ANC wants municipal polls postponed to April 2022
• Daily Maverick: ANC’s Jessie Duarte puts out red alert against calls for ‘second wave’ of unrest
• Fin24: MTN staff get extra week of leave amid burnout fears
• Daily Maverick: Good party sends explosive evidence to Hawks unit of 26 individuals directly implicated in SA’s July unrest
• Business Day.za: SAA a step closer to taking to skies again
EARNINGS:
• AngloGold Ashanti Ltd. (ANG SJ)
ECONOMIC DATA:
• 8am: July Gross Reserves, est. $54.6b, prior $54.5b
• 8am: July Net Reserves, est. $52.1b, prior $51.4b
GOVERNMENT:
• 7:30am: Acting Health Minister Mmamoloko Kubayi briefs reporters on the fight against Covid-19 and the national vaccination rollout program
CORPORATE EVENTS:
• Earnings Calls: JSE SJ

EU/UK/US
European stocks ended at record highs on Thursday, as strong results from Novo Nordisk and Siemens helped outweigh weak mining stocks and losses in major German retailers whose earnings were hurt by COVID-related disruptions. The pan-European STOXX 600 ended 0.4% higher at a record high of 469.96 points, its fourth consecutive peak this week. France’s Cac-40 gained 0.52 and Germany’s DAX was 0.33% stronger. The UK’s FTSE 100 was 0.05% flat. BoE voted unanimously to leave interest rates at their record low of 0.1% and voted 7-1 to maintain the £875bn target for government bond purchases. European futures remained flat.

Wall Street stocks closed higher on Thursday over this week’s jobless claims report from the Labor Department. At the close, the Dow was up 0.78%, while the S&P 500 gained 0.60% and the Nasdaq Composite saw out the session 0.78% firmer.
U.S. jobless claims declined for a second week, falling 14,000 from the prior week to 385,000. U.S contracts remain pretty unchanged on Friday morning.

Here are some key events to watch this week:
• Reserve Bank of India monetary policy decision, briefing Friday
• The U.S. jobs report is expected to show another robust month of hiring Friday

ASIA
MSCI’s broadest index of Asia-Pacific ex. Japan lost 0.35%, dragged down by Chinese blue chips CSI 300 which fell 0.73% and Hong Kong flat 0.01%. The Nikkei225 inched higher on Friday, up 0.38%, as traders adjusted positions ahead of key U.S. jobs data later in the day and a long weekend in Japan. Strong earnings that has lifted the Nikkei this week continued, with Fujikura surging 14.80%, Nikon Corp rallying 8.35% and video game developer Konami Holdings up 5.90%. Australian shares were little changed on Friday as losses in heavyweight miners were countered by strong gains in the tech sector. The S&P/ASX 200 edged up 0.06%.