Month: April 2016

Asia lower; ASX down 0.6%, Nikkei drops 0.3%, Kospi loses 0.4%

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asia markets opened lower on the final trading day of the week, following losses in US stocks overnight as telecoms led declines amid the latest batch of earnings.

The Australian ASX 200 was down 0.64 percent, led by steep declines in the energy, materials and financials subindexes. In Japan, the Nikkei 225 halted its three-day advances to trade down 0.28 percent. Across the Korean Strait, the Kospi was down 0.38 percent.

Analysts reckoned there might be some profit-taking at play in the markets today. Evan Lucas, a market strategist at IG, said ASX market internals “show glaring profits, and possible buyer exhaustion,” with 84 percent of ASX 200 companies above their 50-day moving average.

Early trade declines in Asia followed a lower finish stateside, where the Dow Jones industrial average closed down 0.63 percent, the S&P 500 down 0.52 percent and the Nasdaq composite off by 0.05 percent.

Major indexes reacted negatively to earnings from United, Travelers and Verizon – the latter closed 3.3 percent lower as one of the greatest contributors to declines in the Dow.

Oil prices advanced in Asian hours, following a drop overnight on renewed concerns of oversupply.

Global benchmark Brent futures were up 0.99 percent at USD 44.97 a barrel as of 8:15 a.m. HK/SIN, after dropping 2.8 percent during US hours. US crude futures were up 0.97 percent at USD 43.60, after dropping 2.26 percent overnight.

The decline in oil overnight came as Reuters reported market intelligence firm Genscape suggested a build-up of more than 840,000 barrels in U.S. crude at the Cushing, Oklahoma, delivery point in the four days to April 19.

In the currency market, the dollar held on to the 94 handle against a basket of currencies, with the dollar index at 94.583 as of 8:25 a.m. HK/SIN.

The Japanese yen remained at the 109 handle to the dollar, with the pair trading at 109.37, following an overnight finish at 109.44. Major Japanese exporters were mixed, with shares of Toyota up 0.1 percent, Nissan down 0.14 percent and Honda shedding 0.22 percent. Usually a relatively weaker yen is a positive for exporters as it increases their overseas profits when converted into local currency.

Shares of Mitsubishi Motors were down 14 percent, following a 20 percent drop on Thursday after the company’s executives admitted the company cheated on fuel economy tests.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

After Doha talks fail, Russia set to push oil output to new high

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Russia said on Wednesday it was prepared to push oil production to historic highs, just days after a global deal to freeze output levels collapsed and Saudi Arabia threatened to flood markets with more crude.

Venezuela predicted prices could crash in the next few weeks if producers failed to resume dialogue and urged that non-OPEC participants be observers at a June OPEC meeting, as the specter of oversupply loomed once more.

OPEC member Venezuela and top non-OPEC producer Russia had been the main proponents of the output freeze deal, in the making since February, until it collapsed on Sunday in Doha after Riyadh said it would not sign unless Iran took part.

The deal had been meant to help the market rebalance by removing a large chunk of oversupply and a stockpile glut.

But Saudi Arabia said it could jack up output instead – by as much as 2 million barrels a day to over 12 million, which would allow it to overtake Russia as the world’s largest producer.

“They (Saudis) have the ability to raise output significantly. But so do we,” Russian Energy Minister Alexander Novak told journalists on the sidelines of an international energy conference in Moscow.

He said Russia was “in theory” able to raise production to 12 million or even 13 million bpd from current record levels of close to 11 million bpd.

Russian oil output has repeatedly surprised on the upside over the past decade, rising from as low as 6 million bpd at the turn of the millennium. Oil experts have repeatedly predicted an unavoidable decline but it has yet to happen.

Oil prices crashed to below $30 per barrel in January from as high as $115 in mid-2014 after Saudi Arabia decided to raise output to drive higher-cost producers such as the United States out of the market.

The kingdom, OPEC’s de facto leader and the world’s top exporter, has been pumping unprecedented volumes above 10 million bpd for a year.

Saudi Arabia says it has enough spare capacity to push output to more than 12 million bpd. It has never tested such levels, however, hence the market has little insight about its ability to do so.

“Of course they (Saudis) can increase output. They have been steeply raising drilling volumes recently,” said Lukoil Chief Executive Vagit Alekperov, whose firm has been drilling for gas in Saudi Arabia.

Adding to the glut, Iran said it was determined to raise output to regain market share after the lifting of Western sanctions on the Islamic Republic in January.

New price crash

Alekperov said Russia’s government needed to approve new legislation to ease the tax burden on mature fields in Western Siberia and encourage exploration of other regions, otherwise raising production would be impossible.

“Our industry is at a very mature stage of development. We haven’t launched a single new oil province since the end of the Soviet Union except for Northern Caspian,” Alekperov told a panel with Novak.
Saudi Arabia has one of the lowest costs of oil extraction and its oil minister, Ali al-Naimi, has long argued that Russian output would soon fall because of ageing fields.

Alekperov said he believed oil prices had bottomed and should hover at around $50 a barrel this year, rising from 2017, because of a looming deficit as investment in crude production had fallen too steeply and too fast.

But Venezuelan Oil Minister Eulogio Del Pino said prices could crash and that discussions needed to restart.

The country’s proposal “for now” is that non-OPEC producers who participated in the Doha meeting attend a June OPEC meeting as observers.

“And we can renew discussions,” Del Pino told Reuters. “I anticipate that, without a deal, prices from now to OPEC will drop and it’s not the same to sit down at the table with Brent at $43 per barrel as it is when it’s below $30.”

“We are close to 90 percent of inventory levels already. We could see a steep fall in oil prices in the next few weeks,” Del Pino told the same panel with Novak.

With global supply still exceeding demand by 1.5 million to 2 million bpd, producers in and outside the Organization of the Petroleum Exporting Countries have no other option but to resume dialogue, Del Pino said.

Novak said he was unsure whether OPEC could reach a consensus before its next meeting in about six weeks’ time. “This is a hard task which the countries undertook – to agree by June”.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Saudis threaten $750 bn asset sale, but experts question it

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

China’s steel rally: False dawn or market shift?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asia higher; ASX up 1.1%, Nikkei up 2%, Kospi gains 0.5%

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asia markets advanced in early trade on Thursday, following overnight gains in US equities.

Australia’s ASX 200 was up 1.08 percent, led by a gain of 3.48 percent in the energy subindex. Japan’s Nikkei 225 added 1.99 percent, extending gains from the previous two sessions on the back of a relatively weaker yen. Across the Korean Strait, the Kospi climbed 0.52 percent.

Overnight, an advance in oil prices sent US stocks higher, with the Dow Jones industrial average adding 0.24 percent, the S&P 500 higher by 0.08 percent and Nasdaq composite up 0.16 percent.

“Oil prices remain the main driver for markets,” Rodrigo Catril, a currency strategist at the National Australia Bank, said in a note, “It has been the case this week, [and] the assessment of good news continue to prevail over bad ones.”

Global benchmark Brent settled up 4 percent at USD 45.80 a barrel during US hours, while the May front-month contract for US futures, which expired Wednesday, finished up 3.8 percent at USD 42.63.

Reuters reported that data from the US Energy Information Administration showed crude stocks rose 2.1 million barrels last week, lower than a forecast for a 2.4 million-barrel rise. Oil prices had retreated during Asian hours Wednesday after reports said the strike in Kuwait, which affected the OPEC producer’s daily production numbers, had ended.

Energy plays in Asia advanced in morning trade, with shares of Santos jumping 5.7 percent, Woodside Petroleum up 3.75 percent, Inpex gaining 3.68 percent and South Korea’s S-Oil up 1.69 percent.

In the currency market, the dollar strengthened against a basket of currencies overnight, with the dollar index finishing at 94.492, compared to the 93 handle it briefly touched in the previous session.

“The strength in the dollar has not only been aided by the jump in US yields, euro and yen weakness have also played a hand,” said Catril.

The euro traded at USD 1.1295 overnight, while the yen was at 109.83 to the dollar after touching the 107 level earlier this week.

The relative weakness in the yen sent export stocks in Japan higher, with shares of Toyota advancing 2.09 percent, Nissan up 2.17 percent and Honda higher by 2.69 percent.

There was a flood of sell orders on Mitsubishi Motors on Thursday morning, according to Reuters. This follows the Japanese automaker’s admission on Wednesday that it falsified fuel economy test data to make emissions levels look more favorable.

Elsewhere, the Australian dollar traded at USD 0.7790 as of 8:25 a.m. HK/SIN, compared to USD 0.78 reached briefly during Asian hours on Wednesday. The overnight decline in the Aussie came despite advances in commodities.

Australian banking stocks advanced on Thursday, with the ASX 200’s heavily weighted financials subindex adding 0.69 percent. The country’s so-called Big Four banks – ANZ, Commonwealth Bank of Australia, Westpac and NAB – were up between 0.55 and 1.34 percent.

In the previous session, the Big Four saw some sell-off in the afternoon. Angus Nicholson, a market analyst at IG, said if the banks “begin to fall out of favor again, it will make it very difficult for the ASX to hit [the] 5,300 given their heavy market capitalization weighting.”

On Wednesday, the benchmark index closed above the 5,200 level for the first time since January.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Japan exports fall in March for sixth straight month

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Japan’s exports fell 6.8 percent in March from a year earlier, down for the sixth straight month, Ministry of Finance data showed on Wednesday, as a slowdown in China and emerging markets hurts external demand.

The fall compares with a 6.9 percent decrease expected by economists in a Reuters poll. It followed a 4.0 percent drop in February.

Imports fell 14.9 percent in March, versus the median estimate for a 16.2 percent decrease from the year earlier.

The trade balance came to a surplus of 755.0 billion yen (USD 6.91 billion), versus the median estimate for a surplus of 834.6 billion yen.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asian markets rise; Nikkei up 0.8%, Kospi up 0.4%, ASX up 0.5%

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asia markets advanced on Wednesday morning, supported by broad dollar weakness and higher oil prices overnight, with Japanese stocks extending gains from the previous session on the back of a relatively weaker yen.

The benchmark Nikkei 225 was up 0.77 percent in early trade. Across the Korean Strait, the Kospi was higher by 0.44 percent, while Australia’s ASX 200 added 0.54 percent, led by a 2 percent gain in the energy subindex.

Rodrigo Catril, a currency strategist with the National Australia Bank, wrote in an early morning note, “Commodities are higher across the board while commodity related currencies sit at the top of the G10 leader board, with the yen the only currency weaker against the dollar.”

As of 8:22 a.m. HK/SIN time, the dollar/yen pair traded at 109.07, a 0.11 percent drop from its overnight close at 109.17. That compares with the 108 level it traded at on Tuesday during Asian hours.

Major Japanese exporters were mixed, with shares of Toyota down 0.07 percent, Nissan up 0.19 percent, Honda lower by 0.23 percent and Sony adding 2.97 percent. While a weaker yen is a positive for exporters, as it boosts their overseas profits when converted to local currency, many of these exporters were recently affected by the multiple earthquakes that hit the south of Japan late last week.

The likes of Sony, Toyota and Honda have all had to suspend plants in the affected region, with Toyota announcing on Sunday it would suspend production on its vehicle assembly lines in stages, between April 18 and April 23, due to supply shortages resulting from the quakes.

The dollar index, which measures the dollar against a basket of currencies, advanced during Asian hours, up 0.15 percent at 94.121, compared with its overnight close at 93.976.

Oil prices advanced during US hours, with global benchmark Brent futures settling up USD 1.12 at USD 44.03 a barrel, while US crude was up USD 1.30 at USD 41.08.
Reuters reported that thousands of Kuwaiti oil workers remained on strike for a third day on Tuesday to protest planned public sector pay reform. Citing news agency KUNA, Reuters said the action cut crude output to 1.5 million barrels per day – a little more than half of Kuwait’s average output of 2.8 million barrels per day in March.

Down Under, the Australian dollar retreated from its last close at $0.7811, boosted by overnight advances in oil, to trade down 0.27 percent at USD 0.7790 as of 8:30 a.m. HK/SIN time.

Australian banking stocks were mostly higher, with the country’s so-called Big Four banks – ANZ, Commonwealth Bank of Australia, Westpac and NAB – trading up between 0.21 and 0.4 percent.

“The hunt for yield evident in the currency markets is likely to see investors keen to pick up the big banks,” said Angus Nicholson, a market analyst at IG, in a morning note.

The country’s resources producers advanced broadly, with major miners Rio Tinto up 4.18 percent, Fortescue higher by 7.08 percent and BHP Billiton adding 2.24 percent.

Overnight, base metal prices on the London Metal Exchange mostly advanced according to Reuters data. Three-month copper prices ended up 2.3 percent, zinc was up 2.3 percent, aluminum gained 1.1 percent and lead was up 2.7 percent.

Investors mostly shrugged off BHP’s guidance before market open; the miner cut its guidance for fiscal 2016 iron ore production by 10 million tonnes to 260 million tonnes, pointing to adverse weather and the initiation of an accelerated rail network maintenance program. BHP’s guidance comes just a day after Rio Tinto cut its 2017 production guidance from its Australian iron ore mines.

Major US indexes finished mixed, with the Dow Jones industrial average closing up 0.27 percent and the S&P 500 adding 0.31 percent, while the Nasdaq composite fell 0.4 percent.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Most Asia markets advance; Nikkei jumps 3.5% as yen weakens

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Most Asian markets gained on Tuesday, led by a jump in Japan shares, as oil prices steadied after Monday’s drop on producers’ failure to reach a production-freeze deal over the weekend.

The benchmark Nikkei 225 jumped 3.51 percent, retracing its 3.4 percent loss in the previous session, boosted by a relatively weaker yen against the dollar and as market players digested the extent of damage from last week’s earthquakes.

Australia’s ASX 200 added 1.13 percent, with the energy and materials subindexes leading gains. In South Korea, the Kospi advanced 0.15 percent. Hong Kong’s Hang Seng index was up 0.84 percent. Chinese mainland markets fell behind slightly, with the Shanghai composite down 0.1 percent and the Shenzhen composite slipped 0.12 percent.

Oil prices retreated a tad during Asian hours, after paring most losses overnight. Global benchmark Brent was down 0.19 percent at USD 42.83 a barrel as of 10:28 a.m. HK/SIN time, after settling down 0.4 percent. US crude futures were flat at USD 39.77 a barrel, after finishing lower by 1.4 percent overnight.

On Sunday, the world’s largest oil exporting countries failed to reach an agreement in Doha, Qatar, to freeze output at January levels in order to tackle the global supply glut.

The deal’s failure initially sent oil prices tumbling over 5 percent. The reversal came after reports said that a workers’ strike in Kuwait had hit the gulf country’s daily oil output. Reuters reported that the strike cut the OPEC producer’s crude output by more than 60 percent, from about 3 million barrels per day to about 1.1 million.

Analysts said Kuwait’s reduction in output remains supportive for crude for the time being.

Energy stocks in the region rebounded Tuesday morning, with shares of Santos up 2.84 percent, Oil Search advancing 4.66 percent and Woodside Petroleum up 3.41 percent. Japan’s Inpex advanced 2 percent, while Chinese mainland shares of China Petroleum were up 0.62 percent.

The reversal in oil prices gave an overnight boost to commodity currencies such as the Australian dollar.

The Aussie traded at USD 0.7770 as of 9:56 a.m. HK/SIN time, compared with around USD 0.76 during Asian hours in the previous session.

“Investors were relieved that oil did not fall 10 percent on the back of the Doha meeting and they were quick to reward risk currencies like the Australian and New Zealand dollars with gains,” said Kathy Lien, managing director of foreign exchange strategy at BK Asset Management, in a morning note.

In the minutes of its most recent meeting, released Tuesday, the Reserve Bank of Australia said it was concerned about the impact of a rising currency, but noted that low inflation could allow it to cut interest rates further. At the April 5 meeting, the RBA had kept rates steady at a record-low 2 percent.

The Japanese yen also pulled back, with the dollar/yen pair trading at 109.03 in the morning after touching levels under 108 in the previous session.

Major Japanese exporters saw a rebound in their stock prices, with automakers Toyota, Nissan and Honda adding between 3.02 and 4.09 percent. Shares of Sony rebounded 6.3 percent. Shares of exporters, which typically benefit from a weaker yen, had tumbled in the previous session after reports that some manufacturers were affected by the earthquakes that struck Kyushu island in the south of Japan last week, causing sizable damage.

Reuters reported that Sony and Honda have said their affected production plants in the region will remain suspended for the time being. Toyota said it would suspend production at plants across the country, following the disruption in its supply chain due to the quakes, said Reuters.

Analysts didn’t expect broader damage to Japan’s economy.

Marcel Thieliant from Capital Economics said in a morning note, “the scale of damage does not appear huge and production shutdowns by major manufacturers should be reversed before long.”

But Thieliant added that in the short term, the impact of the disaster would be felt outside of the Kumamoto prefecture. In particular, he said the “shutdown at Toyota could reduce industrial output by up to 1.8 percent in April,” adding the impact will be larger if the shutdown persisted for longer.

Major US indexes closed up overnight, with the Dow Jones industrial average adding 0.6 percent, the S&P 500 gaining 0.65 percent and the Nasdaq composite up by 0.44 percent.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Why Doha no-deal is actually great for oil prices

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow