Month: May 2017

Asian markets fall as safe-haven yen climbs

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

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Equities in Asia lost ground on Wednesday, with Dow futures tumbling and the safe-haven yen climbing amid political and legal turmoil surrounding US President Donald Trump.

“Investors are deeply concerned that all the political noise will morph into economic risk as the political back-fence talk, speculation and dirty laundry could detract from Trump’s key agenda: Tax reform,” Stephen Innes, senior trader at OANDA, said in a note on Wednesday.

The Dow Jones industrial average futures for June tumbled 121 points to 20,813 by 8:40 a.m. HK/SIN, compared with the index’s close at 20,979.75 as risk-off sentiment struck the market.

The Nikkei fell 0.62 percent by 8:36 a.m. as the safe-haven yen strengthened in the wake of renewed political risk. The dollar was fetching just 112.57 yen at 8:02 a.m. HK/SIN, an around two-week low.

Across the Korean Strait in South Korea, the Kospi was down 0.35 percent. Australia’s S&P/ASX 200 dropped 0.81 percent.

The euro rose to a six-month high as political event risk receded from the continent. The common currency last traded against the dollar at $1.1088, compared with levels under USD 1.09 last week.

In the US, Trump defended his actions, saying on Twitter that he had “the absolute right” to share classified intelligence with Russian officials. The President’s tweets came after his national security adviser told the media that the incident reported by the Washington Post did not take place.

Additionally, a New York Times report on Tuesday, later confirmed by NBC News, Trump allegedly asked then-FBI Director James Comey, who Trump later fired, to stop investigating now-fired national security adviser Michael Flynn.

Elsewhere, calls grew for a wider investigation as a key House Republican asked the FBI on Tuesday for any records it has on communications between former FBI Director James Comey and President Donald Trump.

Chinese tech stocks are also likely to be in the spotlight, with the Hong Kong-listed Tencent expected to report earnings today. Nasdaq-listed Weibo and Sina released their earnings for the first quarter in the US on Tuesday. Sina rose sharply after earnings per share came in at USD 0.50 per share, well above FactSet estimates of USD 0.17.

In currency news, the dollar continued to sag. The dollar index, which measures the greenback against a basket of rival currencies, was down at 98.087 at 8:38 a.m. HK/SIN, compared with levels above 99 last week.

“While there is no particular headline behind the move, a likely combination of slipping US yields, softer oil prices and heightened political uncertainty in Washington are providing traders with this morning’s toxic dollar elixir. While the market is fishing for a base this morning, momentum does suggest there is the potential for a deeper US dollar selloff,” OANDA’s Innes said.

The Aussie strengthened against the dollar for a sixth straight session to trade at USD 0.7412.

Overnight in the US, the Dow Jones industrial average fell 2.19 points, or 0.01 percent to close at 20,979.75 and the S&P 500 slipped 1.65 points, or 0.07 percent, to end at 2,400.67, while the Nasdaq advanced 20.20 points, or 0.33 percent, to close at 6,169.87 after touching an intraday record high.

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 mixed following 2% jump in oil prices; dollar softer

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

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Asian markets were mixed in Tuesday trade, following the bounce in oil prices after the energy ministers of Russia and Saudi Arabia announced output cuts should be extended till March 2018 and as investors largely shrugged off US political news on President Donald Trump.

US West Texas Intermediate crude jumped more than 3 percent during the session yesterday following the news. Saudi Arabia and Russia are the world’s top two oil producers.

US crude gained 0.55 percent to trade at USD 49.12 a barrel while Brent crude added 0.44 percent to trade at USD 52.05.

“An extension of OPEC and Russia’s oil production cuts for another nine months should put a floor under the oil price in the mid-USD 40 range as the market inches gradually towards balance,” CMC Markets Chief Market Analyst Ric Spooner said in a Tuesday morning note.

“While the threat of increased shale oil production may mean that the markets also struggles to achieve traction above the mid-USD 50 range … the likely limitation to downside risk will serve as a confidence booster for the oil and gas producers.”

The Nikkei 225 gained 0.52 percent and traded at its highest levels since December 2015. In an exclusive interview with CNBC, Japanese Prime Minister Shinzo Abe said Monday that his country would continue pushing for a trans-Pacific trade deal, but he hoped the US would rejoin the pact.

The Kospi added 0.3 percent. Australia’s S&P/ASX 200 rose 0.38 percent, due largely to gains in its energy sub-index, which was up 0.9 percent.

Greater Chinese markets were lower in early trade. The benchmark Hang Seng Index was down 0.14 percent. The Shanghai Composite fell 0.66 percent and the Shenzhen Composite dropped 0.699 percent.

Meanwhile, Moody’s downgraded the corporate rating of Singapore-listed Noble Group. The reasons for the downgrade was Noble’s “weak operating cashflow and large debt maturities over the next twelve months,” Moody’s Senior Analyst Gloria Tsuen said in a note.

Noble Group shares gained 2.54 percent after slumping more than 20 percent last week.

Investors were also mulling the potential economic policy impact of a Washington Post report that Trump divulged highly classified information during his meeting with Russian officials last week.

Officials told the Post that the information was sensitive and that its exposure endangered the relationship with an ally. This ally, officials told the Post, “has access to the inner workings of the Islamic State.”

The White House through National Security Adviser H.R. McMaster later denied the report. “At no time were any intelligence sources or methods discussed and no military operations were disclosed that were not already known publicly.”

The dollar index, which measures the dollar against a basket of foreign currencies, sank to trade at 98.842. It had traded at levels around the 99 handle last week.

This was due to strength in the euro, which rose for a fourth consecutive session to trade at $1.0986. The greenback gained against the yen for a second straight session, last trading at 113.61.

Meanwhile, the Aussie strengthened against the dollar to trade at USD 0.7432. The Aussie had touched a near four-month low last week due to weaker commodity prices. The New Zealand dollar also climbed against the dollar, last trading at USD 0.6906.

Prices of other commodities, including copper and aluminium, tracked the moves in oil, National Australia Bank Currency Strategist Rodrigo Catril said in note, adding that this “helped commodity-linked currencies outperform.” He added that the Kiwi and Aussie had given up some gains as oil prices eased overnight.

In economic news, minutes of the Reserve Bank of Australia’s (RBA) May meeting are expected at 9:30 am HK/SIN. A deluge of data from Europe is also expected during the European trading day, with the UK reporting CPI and PPI figures and Europe releasing Q1 GDP data at 4:30 pm and 5:00 pm respectively.

Over in the US, equities rose more than 0.4 percent across the board, with energy stocks contributing to the gains. The S&P 500 finished the session 0.48 percent higher while gains in tech and cybersecurity stocks caused the Nasdaq to rise 0.46 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

Asia gain despite protectionism concerns, North Korean missile launch, cyberattacks

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

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Asian markets were mostly in the money on Monday despite concerns over trade protectionism during the G7 meeting in Italy and North Korea’s latest missile launch at the weekend.

G7 finance ministers and central bankers highlighted the risks US trade policies could pose to global growth during their meeting in Italy. This follows an earlier meeting in March this year, when G20 leaders failed to endorse free trade in their joint communique.

Meanwhile, concerns over North Korea’s nuclear program grew after the hermit state launched a new missile over the weekend. The missile landed in the sea close to Russia, Reuters reported.

Markets were also jittery that the extent of a global cyberattack could escalate as people return to work on Monday. Called “WannaCry,” the malware infects affected devices with a ransomware program. It hobbled the U.K.’s National Health Service (NHS) record systems last week.

Japan’s benchmark Nikkei 225 index sank declined 0.18 percent. The Kospi shrugged off North Korea’s latest missile launch and reversed earlier losses to trade 0.39 percent higher. The S&P/AX 200 did likewise and was up 0.08 percent.

Markets in greater China were also in the green. The Hang Seng Index gained 0.56 percent. The Shanghai Composite added 0.26 percent and the Shenzhen Composite was higher by 0.461 percent.

Miner BHP Billiton is expected to unveil plans to unlock greater value from its shale assets after hedge fund Elliott Management urged the company to restructure last month, Reuters said. The company also dropped the “Billiton” in its name as part of a rebranding exercise. BHP shares fell 0.36 percent.

Also in Australia, Fairfax Media was reportedly offered AUSD 2.76 billion (USD 2.04 billion) by TPG Capital Management for the entire company. An earlier bid by TPG had only targeted Fairfax’s main newspapers and property listings arm. Fairfax shares surged 7.24 percent on the news.

Troubled Japanese conglomerate Toshiba said it was contemplating the release of provisional results even if it does not receive approval from auditors. The Tokyo Stock Exchange’s deadline for reporting earnings for the year ending March is May 15. Toshiba shares jumped 3.83 percent.

Over in Singapore, shares of Genting Singapore soared 6.02 percent after the company reported that Q1 profits were 16.7 times higher on year. Nomura analysts Tushar Mohata and Alpa Aggarwal reiterated their “Buy” call on the stock in a note, adding that they expected Genting shares to re-rate before companies begin tendering bids to open integrated resorts in Japan.

Oil prices were steady after settling higher in the last session on renewed OPEC output cut hopes. Brent crude futures were up 0.04 percent at USD 50.86 a barrel and US crude gained 0.08 percent to trade at USD 47.88.

In currency news, the dollar gained slightly against a basket of rival currencies at 99.256 after slipping last Friday. Weakness in the dollar was a result of weaker-than-expected economic data out of the US last week. The dollar was also stronger against the yen, with the greenback fetching 113.39. Dollar/yen had breached the 114 level last week.

Economic data expected today includes April industrial production and retail sales out of China at 10:00 am HK/SIN. India will also report trade numbers for April at 8:30 pm.

Stateside, equities closed mixed last Friday after economic data proved to be a mixed bag, and on the back of the drop in retails stocks.

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

Bank of England leaves rates unchanged, lowers 2017 growth forecast

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

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The Bank of England (BOE) held interest rates steady at 0.25 percent, as expected, on Thursday while implementing some widely anticipated modifications to its growth and inflation assumptions over the three-year forecast horizon.

Meantime, the Bank maintained stock levels of government bonds and corporate bonds at £435 billion and £10 billion, respectively, also as expected.

While the BOE was widely seen holding rates steady at 0.25 percent, speculation had centered on whether committee member Kristin Forbes would maintain her dissenting vote for a 25 basis point rise in interest rates as per her stance at the March meeting – and if so, whether she would be joined by one or two more policymakers, most likely seen to be Michael Saunders or Ian McCafferty.

In the end, Forbes remained the sole dissenter with a resulting 7-1 split among policymakers (the committee is currently one member short as Charlotte Hogg’s seat has not been filled since her recent resignation).

Sterling dropped lower on the news with the 7-1 split seen as fairly dovish by the market. The currency slipped to 1.288 against the dollar after trading near 1.292 before the announcement.

Growth downgrade

Despite first-quarter gross domestic product (GDP) coming in at 0.3 percent and undershooting the BOE’s February estimate that the figure would hit 0.5 percent, the central bank’s forecasters have only reduced the outlook for 2017 growth to 1.9 percent from 2.0 percent.

Looking ahead, the Bank has made further tweaks to estimates, upping GDP projections for 2018 and 2019 by 0.1 percentage points each, to 1.7 percent and 1.8 percent, respectively.

Behind the headline figures, however, the BOE’s perception of the balance of growth has altered, partly in light of a consumer slowdown hitting growth earlier and more substantively than previously expected.

This negative development has been largely offset, according to the BOE, by more optimistic prospects for global growth – and therefore U.K. exports – and the appetite of U.K. businesses to continue investing, despite headwinds posed by uncertainty over the U.K.’s impending departure from the European Union (EU).

Inflation forecasts have also been mildly adjusted with the BOE bringing forward its expectations for consumer price inflation (CPI) to peak over the forecast period in the final quarter of this year at around 2.8 percent, as opposed to its earlier estimate that the highest point would be reached in the second quarter of 2018.

Further out, the Bank has adjusted downwards its CPI expectations versus its February estimations by 0.2 percent in both 2018 and 2019 to 2.4 percent and 2.2 percent, respectively.

The BOE’s press release attributes the more rapid than anticipated uptick in inflation to its most recent level of 2.3 percent as of March – squarely above the Bank’s 2 percent inflation target – to weakness in the U.K. currency, noting, “The projected overshoot (of the inflation target) entirely reflects the effects of the falls in sterling since late November 2015 on import prices.”

Yet, the BOE’s forecast inflation trajectory assumes that the current dynamic – whereby weak wage growth keeps domestic cost inflation in check while imported inflation overshoots – is set to normalize as the jobless rate moves towards its estimated long-term equilibrium rate of 4.5 percent by 2020.

“With unemployment falling to its estimated rate, wage growth is expected to recover significantly, and the drag from domestic costs to lessen over the same period,” says the BOE’s press release.

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

OPEC oil output falls in April, but production from top exporter Saudi Arabia rises

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

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OPEC continued to reduce production in April, but output from top exporter Saudi Arabia ticked up last month.

Saudi crude oil production rose by nearly 50,000 barrels a day, according to figures from the kingdom and secondary sources. OPEC took about 18,000 barrels a day off the market in April, according to secondary sources listed in an OPEC report that was released Thursday.

Saudi Arabia is still pumping well below the level it agreed to in November, when OPEC agreed to reduce its combined oil output by 1.2 million barrels a day in order to shrink huge global stockpiles and balance an oversupplied market.

But the market closely watches Riyadh’s production because it has delivered the lion’s share of OPEC’s cuts during the first four months of the six-month deal. Oil prices pared gains after OPEC released the report.

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

Satya Nadella explains how Microsoft will succeed in a world of rising nationalism

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

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Microsoft is successful around the world in large part because it gives back to local communities and creates lots of businesses there, CEO Satya Nadella told financial analysts on Wednesday.

Microsoft operates in more than 190 countries, and Nadella said the ability to compete in so many places is vital to the company’s “overall long-term growth.” But you can’t just set up shop and give nothing back — you have to “create local opportunity.”

This is especially true in the current age, as politicians and citizens in many countries are turning against the decades-long trend of globalization.

“Every head of state only cares about one thing: it’s about their country first,” said Nadella. “In the U.S. it’s about America first, and in Britain it’s about Britain first.”

When talking to these heads of state, a company must to be able to show them what you’ve done for their countries “in terms of local taxes, in terms of local small business productivity, local large business competitiveness, their educational outcomes, their entrepreneurial work, that’s what matters,” he said.

“Any company that just collects rent internationally,” Nadella added, “will be in trouble.”

Microsoft booked more revenue from outside the United States than from within it in each of its last two fiscal years. In the fiscal year ended June 30, 2016, it generated $44.7 billion in international sales, versus $40.6 billion domestically.

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 open cautiously higher following mixed close stateside

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

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Asian indexes were cautiously higher in early Thursday trade, following a mixed close stateside as investors noted Snap’s USD 2.2 billion loss, and monitored potential fallout on President Donald Trump’s policies after FBI Director James Comey was fired.

Comey was dismissed by US President Donald Trump yesterday reportedly to increase public trust. The search for Comey’s replacement is underway.

The Nikkei 225 edged up 0.2 percent while South Korea’s benchmark Kospi index added 0.55 percent on Thursday. The ASX 200 was slightly higher, gaining 0.04 percent in early trade.

Markets in Indonesia are closed for a public holiday.

In the New Zealand, the central bank announced Thursday morning it stood pat on interest rates. The Reserve Bank of New Zealand’s comments on policy were regarded as dovish by the market.

The Kiwi traded lower against the dollar at USD 0.683, compared to the USD 0.69 handle seen just ahead of the news.

Stateside, shares of the social media company Snap tumbled almost 24 percent after hours on news that the company had missed earnings and growth projections.

Over in Asia, shares of Toyota and SoftBank are expected to move. Japanese automaker Toyota forecast yesterday that profits for this year would fall by 20 percent due to increased marketing costs. Toyota shares were down 0.46 percent in early trade.

Meanwhile, telecommunications giant SoftBank said annual profits increased by 13 percent on year but that it had incurred USD 2.2 billion in derivative losses. Shares of the company jumped 1.11 percent.

The dollar gained against a basket of rivals, with the dollar index strengthening for the fourth straight session to trade at 99.657. The dollar/yen edged higher, with the greenback fetching 114.33, compared to levels around 112 seen last week.

The Australian dollar had some respite after falling for three straight sessions against the dollar, strengthening slightly to trade at USD 0.7358.

Oil prices bounced more than 3 percent in the previous session after US inventories recorded their largest one-week drop this year. US West Texas International crude was up by 0.19 percent to trade at USD 47.41 a barrel while Brent crude gained 0.18 percent to trade at USD 50.31.

In economic news, the Bank of England will announce its interest rate decision at 7:00 pm HK/SIN. The European Central Bank will also be releasing its economic bulletin during European hours.

US equities closed mixed after shrugging off the dismissal of Comey. The Dow Jones industrial average declined 0.16 percent or 32.67 points to trade at 20,943.11. Both the S&P 500 and Nasdaq notched record closes.

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

Tesla begins taking orders for its glass solar roof tiles with a roll out in the US this year, Elon Musk says

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

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Tesla will begin taking orders for its solar roof tiles on Wednesday which will be rolled out in the U.S. this year, Chief Executive Elon Musk said in the early hours of Wednesday morning.

Tesla solar glass roof orders open this afternoon. I think it will be great. More in about 10 hours …

— Elon Musk (@elonmusk) May 10, 2017

The glass roof panels were announced last year and come in four styles: smooth, textured, slate and Tuscan. Black glass smooth and textured will be the first two styles to be installed this year, followed by Tuscan and French slate in about six months Musk said.

The Tesla CEO also said that people can order the solar roof tiles from “almost any country” with deployment happening in the U.S. first this year, followed by overseas in 2018. 

Solar roof can be ordered for almost any country. Deployment this year in the US and overseas next year.

— Elon Musk (@elonmusk) May 10, 2017

In March, Musk tweeted that Tesla would begin taking orders for the roof tiles in April, so the announcement seems to be a few days behind schedule.

@HolsMichael Start taking orders in April

— Elon Musk (@elonmusk) March 24, 2017

Tesla has been branching out beyond just its electric cars to other sustainable energy products. It acquired SolarCity last year, another company founded by Musk, which focused on solar power and energy storage. Tesla makes a product called Powerwall as well as commercial solar panels.

In a video on Tesla’s website, Musk said global warming is a “serious crisis” and his efforts are a big to improve the situation. But to date, solar panels hadn’t looked very appealing. That’s why the company unveiled the solar roof tiles which look like real slates but are made from glass.

“Just like with electric cars where electric cars originally didn’t look good, they had low range … they were like a golf cart, so people had a real hard time buying electric cars. And I think something similar needs to happen to solar. We really need to make solar panels as appealing as electric cars have become,” Musk said.

“The goal is to have … solar roofs that look better than normal roof, generate electricity, last longer, have better insulation and actually have a cost, an installed cost that is less than a normal roof plus the cost of electricity.”

Musk said that he would give more information in 10 hours, and did not reveal a price for the solar roof tiles.

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 in the green with Comey’s FBI dismissal, new South Korean president in focus

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

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Equities in Asia were in the green on Wednesday as investors digest the dramatic dismissal of FBI Director James Comey in the US and follow the inauguration of liberal candidate Moon Jae-in after his win in the South Korean presidential election.

Official results reflected that Moon, a candidate from the Democratic Party of Korea, had won 41.1 percent of the vote, according to Reuters. Moon will take on the presidency after the ouster of former South Korean President Park Geun-hye was removed from office on corruption charges.

Political developments in the U.S. are also likely to weigh. FBI Director James Comey was fired by U.S. President Donald Trump on the recommendation of Attorney General Jeff Sessions and Deputy Attorney General Rod Rosenstein. The reason for the dismissal cited was to mend “public trust and confidence” in the FBI.

Japan’s benchmark Nikkei 225 index was up 0.45 percent while the Kospi edged up by 0.24 percent. The ASX 200 was reversed earlier losses to gain 0.34 percent as investors in digested the release of the federal budget yesterday after the market close.

Markets in greater China were also in the green, with Hong Kong’s Hang Seng Index up 0.42 percent. The Shanghai Composite was marginally higher, trading higher by 0.04 percent, while the Shenzhen Composite added 0.195 percent.

Markets in Singapore, Thailand and Malaysia were closed for the Vesak Day public holiday.

In currency news, the dollar weakened against a basket of rivals after three consecutive sessions of gains to trade at 99.422. The move lower came after Trump’s surprise dismissal of FBI Director Comey. The dollar also softened against the yen, trading at 113.88 at 9:32 am HK/SIN. Dollar/yen breached the 114 level earlier in the session.

The Aussie dollar strengthened slightly against the dollar to trade at USD 0.7355, off levels around USD 0.74 seen last week.

“With iron ore, (Australia’s) chief export, having shed an astonishing 47.3 percent over 36 sessions then the Australian dollar has done well to remain above USD 0.73 until now,” ThinkMarkets Senior Market Analyst Matt Simpson said in a note.

With the Federal Reserve likely to raise interest rates in June, the Aussie could break below USD 0.70 if traders realize a third rate hike is on the cards, Simpson told CNBC.

The Australian government forecast an AUSD 7.4 billion (USD 5.4 billion) surplus for fiscal year 2020/21 and announced it would be raising taxes on banks in its bid to “re-set” the Australian budget yesterday.

Shares of major Australian banks fell more than 1 percent in early trade following the news of the bank levy but later stabilized. Westpac was down 0.64 percent, Commonwealth Bank was off 0.6 percent and National Australia Bank was 0.48 percent lower.

Meanwhile, oil prices edged up after falling 1.2 percent in the previous session. Brent futures added 0.64 percent to trade at USD 49.03 a barrel and US crude was 0.74 percent higher at USD 46.22.

In economic news, China CPI data for the month of April rose 1.2 percent on year. This was higher than the 1.1 percent projected by analysts, Reuters reported. PPI gained 6.4 percent compared to the 6.9 percent forecast.

The Bank of Japan will also be releasing a summary of opinions at its most recent policy meeting later in the day.

Stateside, equities were lower on the back of comments from North Korea indicating the country would continue with its nuclear tests.

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 muted; South Korean election, Australia budget in focus

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

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Asian equities were mostly muted after soaring in the previous trading session with investors focused on key regional events unfolding in the day, including a presidential election in South Korea and the release of the Australian federal budget.

South Koreans take to the polls today to choose a new leader after the ouster of former President Park Geun-hye on bribery charges. The front-runner in the election is Moon Jae-in from the liberal Democratic Party of Korea. Polls show that Moon has secured 38 percent of support from voters among a total of 13 candidates, according to Reuters.

Markets in the country are closed today.

Japan’s Nikkei 225 was mostly flat, trading 0.11 percent lower after surging more than 2 percent in the previous session.

Hong Kong’s Hang Seng Index trader higher by 0.3 percent. Markets on the mainland were softer, with the Shanghai Composite sliding 0.2 percent and the Shenzhen Composite lower by 0.119 percent.

In Hong Kong, the suspension in the trade of China Huishan Dairy Holding shares was extended by regulators. Shares of the troubled company plunged 85 percent in March this year.

The S&P/ASX 200, Australia’s benchmark index, fell 0.47 percent, driven by the financials sub-index, which experienced a 1.9 percent drop.

Down Under, banks traded lower due to reports of a bank tax that could be included in the budget for the fiscal year starting July 1 that will be released at 5:30 pm HK/SIN today. Commonwealth Bank fell 2.75 percent, ANZ was off by 2.2 percent and Westpac was down 2.73 percent.

“(T)he market is likely to be nervous about this prospect until they get details of what might be involved and what capacity of banks might have to pass this cost on to customers,” CMC Markets Chief Market Analyst Ric Spooner said in a note.

Citibank analysts retained a “Sell” rating on Westpac, which reported solid half-year profits yesterday.

“(Westpac’s) current profitability trends are the same as we have seen for ANZ and National Australia Bank. Despite this, Westpac trades on a sizable PE and PB premium to these banks, which we think will be hard to maintain,” Citibank analysts Craig Williams, Brendan Sproules and Andrew P. Tam said in a note.

Over in Singapore, OCBC reported net profits for Q1 rose 14 percent on year. Net profits for Q1 stood at SUSD USD 973 million (USD 692.33 million). However, OCBC’s net interest income of SUSD 1.27 billion reflected a decline of 3 percent on year. Shares of the bank were higher by 1.07 percent.

The euro, which traded at a six-month high of USD 1.1023 early yesterday, was softer against the dollar and traded at USD 1.0929.

The dollar index, which measures the greenback against a basket of currencies, strengthened for a third consecutive session to trade at 99.159. Against the yen, the dollar traded at 113.31, its highest level it almost two months.

Meanwhile, the Aussie continued its slide against the dollar, off the USD 0.74 handle seen last week. The Aussie last traded at USD 0.7368.

“While the Japanese yen’s underperformance can be largely attributed to the move higher in US Treasury yields, the Australian dollar’s underperformance is also due to another soft night for key Australian commodities,” National Australia Bank Currency Strategist Rodrigo Catril said in a Tuesday morning note, highlighting the fall in iron ore, steam coal and aluminium prices.

The Korean won bucked a three-day losing streak against the dollar to trade at 1,133.88 at 9:30 am HK/SIN.

In energy news, oil prices rose on the back of renewed hopes that output cuts from OPEC and non-OPEC oil producers could potentially extend to 2018. US crude rose 0.39 percent to trade at USD 46.61 per barrel while Brent crude added 0.41 percent to trade at USD 49.54.

Overnight in the US, equities traded mostly flat while European stocks fell slightly in yesterday’s session following Emmanuel Macron’s win in the French presidential election on Sunday.

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