Asian Shares Steady As Traders Await Earnings; Turtkish Lira Hits Record Low

25/10/2021 Equities markets in Asia-pacific region remained steady on Monday ahead of a week packed with major quarterly earnings announcements. News of trials of a property tax in China weighed on Hong Kong and mainland Chinese markets. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.16%. Futures for Japan and Hong Kong fell, while Australia’s rose. U.S. equities and 10-year U.S. Treasury yields declined on Friday. U.S. Fed. Chair Jerome Powell, on Frida, flagged inflation could stay higher for longer, making clear the central bank will begin tapering its bond purchases shortly but stay patient on raising interest rates. The Turkish Lira slid after President Erdogan’s weekend threats to expel 10 ambassadors of foreign countries, including of U.S. and Germany. The dollar was steady against major peers in early Asian trading.

Gold futures edged up 0.35% to $1,798.17. The dollar, which usually moves inversely to gold, edged down on Monday.

Oil prices extended pre-weekend gains to hit multi-year highs as global supply remained tight amid solid fuel demand in the U.S. and elsewhere in the world as economies pick up from coronavirus pandemic-induced slumps. Brent crude futures increased 68 cents, or 0.81%, to $86.24 a barrel. U.S. WTI crude futures rose 81 cents, or 0.99%, to $84.59 at the writing, after gaining 1.5% on Friday.

Here are some events to watch this week:
• Earnings: Amazon, Apple, Facebook, Microsoft, Twitter, Samsung Electronics, HSBC Holdings, China Vanke, PetroChina, Ping An Insurance Group
• Australia CPI, Wednesday
• U.S. wholesale inventories, U.S. durable goods, Wednesday
• Bank of Japan monetary policy decision, briefing, Thursday
• ECB rates decision, President Christine Lagarde briefing, Thursday
• U.S. GDP, initial jobless claims, Thursday
• G-20 joint finance and health ministers meeting ahead of the weekend leaders’ summit, Friday

On Friday the local market ended on a positive note as China’s Evergrande avoided a credit default. The JSE gained 1.5% to 67,050 points, volumes were tiny – R12.9bn on the day. The All-share index ended the week 0.03%, while remaining almost 13% firm YTD. Top-40 gained 1.66%, precious metals rose 3.61%, resources 2.5%, industrial metals 1.99% and industrials 1.33%. Gold Fields led the gains in the precious metals sector on the JSE, closing 7.65% higher at R148.44. AngloGold Ashanti added 5.89% to R292.26. African Rainbow Minerals led the industrial metals sector, climbing 3.64% to R217.09. Kumba Iron Ore firmed 2.55% to R495.05. Local inflation data, on the producer side, coming out on Thursday. Top-40 futures on the backfoot -26points, IG markets. The rand recouping 0.30% against the greenback this morning at R14.7860, having to drift as far down as R14.8350 on Friday as the Lira slid. Tencent, in Hong Kong, on the backfoot 0.88%.

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European equities markets finished higher on Friday, traders cheering news of an interest payment by debt-ridden Evergrande Group and strong earnings from France’s L’Oreal. The pan-European Stoxx 600 was up by 0.46%, alongside a 0.46% gain for the German Dax while the London’s FSTE100 gained 0.20%. France’s blue-chip CAC 40 rose 0.7% and outperformed its European peers, riding on a 5.1% surge in L’Oreal shares following the cosmetics company’s strong results. Euro zone inflation expectations hit their highest levels in years, putting additional pressure on the European Central Bank over its insistence on maintaining crisis-era stimulus. The central bank is set to mee this coming Thursday. European futures at the moment: FTSE + 15 points, the DAX + 16.5 points

Wall Street stocks were mixed early on Friday as losses in the tech sector weighed on the Nasdaq early in the session. Snap shares slumped more than 20% after missing revenues expectations with its third-quarter earnings, impact stemming from privacy changes at Apple. Twitter and Facebook shares also slipped back on similar concerns, dragging the Nasdaq into the red. At the closing bell, S&P500 retreated 0.11%, Nasdaq dipped 0.82%, while the Dow gained 0.21%. The Federal Reserve is on track to start tapering its asset purchases, Powell said in remarks at a virtual event, and inflation should come down as supply-chain challenges ease. Three main U.S. futures benchmarks steady across the board: Dow + 0.01%, S&P500 +0.06%, Nasdaq 0.07%.

Asian stock markets were mixed after China tightened travel controls in some areas in response to coronavirus infections. In Gansu province, northwest of China, tourist sites were closed Monday after coronavirus cases were found and the capital, Beijing, banned visitors from areas with infections in the past 14 days. Shanghai shares rose led by environmental protection stocks on China’s measures to achieve carbon neutrality, while property firms fell after a report said the government would roll out a pilot real estate tax in some regions. The Shanghai Composite Index gained 0.4%, The Hang Seng index rose 0.1% . Australian shares extended three weeks of gains as Victoria state looked to further ease COVID-19 curbs on hopes of attaining an 80% vaccination rate during the week. S&P/ ASX200 advanced 0.35%, with materials and communications services sectors leading the gains.