02/09/2021 Asian stocks were mixed Thursday as Chinese technology shares pared a climb following a fresh regulatory assault from Beijing. Traders were also cautious as they await U.S. jobs data to gauge the stimulus outlook. Chinese tech shares listed in Hong Kong came off their highs after criticism of ride-hailing firms highlighted risks from the nation’s ongoing crackdown on private industries. China’s overall market was steady, with traders assessing a central bank step to cushion the economy by helping smaller firms. Commodity-reliant Australia slid on weakness in materials like iron ore. U.S. equity and European futures fluctuated. Overnight, the Nasdaq 100 edged up to a record and the S&P 500 was little changed. The defensive flavor to trading came amid data suggesting a slower U.S. labor market recovery. Ten-year U.S. Treasury yields hovered around 1.30%. U.S. Oil declined after OPEC+ stuck with a plan to boost crude production.
Tencent trades 1.4% higher in HK. The Rand remains firm around the 14.38 level vs the USD, with the FTSE JSE Top 40 futures indicating a lower start down 190 points or 0.31%.
Here are some key events to watch this week:
- U.S. factory orders, durable goods, trade balance, initial jobless claims Today
- U.S. jobs report Friday
Yesterday the FTSE/JSE Africa All-Share Index closed down 0.7% to 66,976, mostly weighed down by lower commodity prices, with the resource sector shedding 3.8%. BHP lost the most giving up a massive 8.6% after the counter traded ex div. The bank and retail sectors were both softer giving up 1.2% and 1.3% respectively. Old Mutual rallied a healthy 7.4% as results encourage a rerating, with Naspers and Prosus of the few other names that closed positive with both counters that gained just over 4%, after the JSE has set it’s combined index weighting cap at 12% (6% each) in the SWIX40, which is very close to the current combined weightings of between 11-13%. The Rand was up 0.9% to 14.40 per US$, with the Yield on 10-year govt rand bonds that rose 0.40 bps to 9.12%.
Impala Platinum is scheduled to announce full-year results. The company said on Aug. 16 it expects headline earnings per share for the period to more than double.
- South African Emergency Power Program Threatened With Delay
- Aspen in Talks With J&J to Increase Africa Vaccine Production
- South Africa Backs GDP Data Despite Missing Mine Statistics
- South African Banks Need Better Offerings to Help Drive Equality
- Buyout Firm Actis Is Said to Plan Sale of Lekela Power Stake
- Old Mutual Rises to 18-Month High as Results Encourage Rerating
- Luxury Stocks Rise; Bernstein Says China Tax Risk Is Priced In
- Truworths to Report Results; Shares Up 77.3% YTD
- S. Africa’s CashBuild Soars After Dividend, Earnings Climb
- Impala Platinum Holdings Ltd. (IMP SJ)
- Discovery Ltd. (DSY SJ)
- Santam Ltd. (SNT SJ)
- Truworths International Ltd. (TRU SJ)
- 1pm: July Electricity Production YoY, prior 3.2%
- 1pm: July Electricity Consumption YoY, prior 2.1%
- Minister in the Presidency Mondli Gungubele to address media briefing on the outcome of the latest cabinet meeting
- Annual General Meetings: TFG SJ
- Earnings Calls: APN SJ, DSY SJ, IMP SJ, SNT SJ
European stocks closed higher on Wednesday as investors shrugged off hotter-than-expected euro zone inflation data. The pan-European Stoxx 600 ended Wednesday’s session up by 0.5% provisionally, with retail shares jumping 1.9% to lead gains while basic resources slid 0.6%. The benchmark closed lower Tuesday — but still marked its seventh straight month of gains — following the release of euro zone inflation data for August which showed consumer prices increased by 3% this month from a year ago. This was far above expectations and the European Central Bank’s 2% target. The data will put pressure on the central bank to address inflation concerns at a key meeting next week. German retail sales slipped by more than expected in July, the Federal Statistics Office said Wednesday, dropping 5.1% month-on-month in real terms against a Reuters forecast for a 0.9% fall. This followed gains of 4.5% in June and 4.6% in May. The final August manufacturing PMI (purchasing managers’ index) reading for the euro zone came in at 61.4, slightly below an initial flash estimate of 61.5, as factory growth and price rises remained strong. The U.K. suffered contrasting fortunes as supply chain problems pulled the manufacturing PMI down to 60.3 from July’s 60.4. IHS Markit’s gauge of U.K. factory production slid to its lowest level since February. Spain’s manufacturing PMI came in at 59.5, an acceleration from 59.0 in July. However, supply chain disruptions and raw material supply and demand discrepancies mean manufacturing confidence dropped off. On the earnings front, Swedish airline SAS posted a 1.36 billion Swedish krone ($160 million) net loss for the third quarter as travel restrictions continued to cause headwinds for air travel. Shares edged 2.4% higher. French alcoholic beverage company Pernod Ricard beat full-year 2020/21 operating profit expectations and announced the restart of a 500 million euro ($590 million) share buyback program. The company’s shares gained 3.8%. Food delivery shares were the top individual gainers Wednesday, with Just Eat Takeaway.com and Deliveroo both rising over 6%. At the bottom of the index, Carrefour dropped 5.5% after LVMH Chairman and CEO Bernard Arnault sold his 5.7% stake in the French retailer. British retailer WH Smith, meanwhile, fell 3.8% after forecasting that profits for the year ending August 2022 will be toward the lower end of market expectations.
The S&P 500 closed the first trading day of September near the flatline as the strength in technology shares faded, while investors digested a disappointing employment report. The broad equity index gained just 1.41 points on Wednesday to 4,524.09 as losses in energy offset gains in utilities and real estate. The tech-heavy Nasdaq Composite advanced 0.3% to 15,309.38 to eke out a record close after trading 0.8% higher earlier in the day. Apple jumped as much as 2% to an all-time high, but pared gains to about 0.5%. The Dow Jones Industrial Average dipped 48.20 points, or 0.1%, to 35,312.53. U.S. companies created far fewer jobs than expected in August, with private payrolls rising just 374,000, according to payroll services firm ADP. That was well below the Dow Jones estimate of 600,000. Among individual equities, solar stock Sunrun surged more than 6% after JPMorgan predicted a comeback that would take the shares 90% higher. Zoom Video shares rebounded slightly following a 16% plunge Tuesday after Cathie Wood revealed she bought nearly 200,000 shares on the dip.
Shares in Asia-Pacific were mixed in Thursday trade as Australia reported a higher-than-expected trade surplus in July. The S&P/ASX 200 in Australia shed 0.72%. Australia recorded a trade surplus of 12.117 billion Australian dollars (about $8.93 billion) in July, according to data released Thursday by the country’s Bureau of Statistics. That was much higher than the 10.2 billion Australian dollars surplus projected in a Reuters poll. Elsewhere, mainland Chinese stocks were mixed, with the Shanghai composite up 0.55% while the Shenzhen component shed 0.316%. Hong Kong’s Hang Seng index hovered fractionally higher. Chinese regulators summoned and interviewed 11 ride-hailing firms asking them to rectify non-compliant behavior. Companies that were interviewed by the Ministry of Transport and other regulators included Didi and Meituan. Meituan shares in Hong Kong were 0.63% higher by Thursday afternoon in the city. Shares of other Chinese tech firms in Hong Kong were also largely in positive territory: Tencent jumped 1.68% and Alibaba rose 2.3%. The Hang Seng Tech index advanced 1.33%. In Japan, the Nikkei 225 gained 0.32% while the Topix index was fractionally higher. South Korea’s Kospi dipped 0.76%. MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.13%.
Gold was steady as investors awaited U.S. payrolls data due Friday for more clues on labor-market strength, which could provide an indication on when the Federal Reserve will start to taper bond purchases. Spot gold was steady at $1,814.34 an ounce, after ending little changed on Wednesday. Silver rose, while palladium and platinum fell.
Oil declined after OPEC+ stuck with a plan to boost crude production, with the cartel wagering that the global market can absorb the additional supply as demand improves and stockpiles get drawn down. West Texas Intermediate was 0.4% lower after closing little changed on Wednesday. Following a swift midweek meeting, ministers from the Organization of Petroleum Exporting Countries and its allies ratified the 400,000 barrel-a-day rise scheduled for October. In the U.S., a government report showed a further contraction in nationwide crude inventories.
Aluminum reached a fresh decade high, rallying with other metals after China ramped up support for the economy and pledged more action to keep growth intact. The central bank will boost funding for small- and medium- sized businesses among other measures to cushion the economy, the State Council, or government cabinet, said in a statement after meeting on Wednesday. That follows data earlier this week showing a bigger-than-expected drop in economic activity in August. Aluminum rose as much as 1.6% to reach $2,732.50 a ton, its highest since May 2011. Investors have flocked to the metal as energy-intensive output in China is pressured by power rationing and government policies to reduce emissions.
Iron ore futures also rose, trimming some of Wednesday’s 7.2% decline in Singapore. The steelmaking material has swung sharply in recent weeks, as investors weigh expectations for intensifying curbs on steel output, with hopes for a seasonal up-tick in Chinese demand and signs of more seaborne supply. Exports from Brazil reached the highest for any August on record.