China’s stock market was the world’s second-worst over the past year. Analysts covering it didn’t do much better.
The rout in the Shanghai Composite Index, which has lost more than a third of its value since the end of April 2015, followed one of the benchmark’s best rallies ever and shocked global markets as indicated by how badly the analysts covering Chinese equities performed. Their predictions were off by bigger margins than those of analysts researching stocks in the rest of the world’s 20 largest markets.
Amazon.com Inc (AMZN.O) on Thursday reported profit and revenue that blew past analysts' expectations, sending its shares soaring in after-hours trading and demonstrating the growing market power of its core retail business and new cloud services division.
Asian share markets rose to five-month highs on Tuesday, taking their cue from gains on Wall Street after a strike in Kuwait helped pull crude oil prices above their prior-session lows.
A businessman is reflected in an electronic board
displaying Japan's Nikkei share average outside a
brokerage in Tokyo, Japan, April 18, 2016.
REUTERS/TORU HANAI
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 0.7 percent, after touching its highest intraday levels since November. The Dow Jones industrial average .DJI climbed to its highest level since July overnight.
Crude futures slipped on Tuesday on a persistent global glut and the failure of a producer meeting at the weekend to rein in the ballooning oversupply, although a sharp drop in output in Kuwait due to an oil worker strike underpinned prices briefly.
A pump jack is seen near sunflowers in Guthrie, Oklahoma
in a September 15, 2015 file photo.
REUTERS/NICK OXFORD/FILES
Kuwait's output has dropped to 1.1 million barrels per day (bpd) from 2.8 million bpd due to the worker strike. However, analysts expect the disruption to be brief and markets to soon refocus on the global glut given the failure of major exporters to agree on an output freeze at their Sunday meet.
Asian share prices won some reprieve on Wednesday after a sharp fall in the previous session, but gains were modest as soft economic data from the United States and Europe cast a shadow on the global economic outlook.
A man walks past an electronic board displaying the Nikkei average outside a brokerage in Tokyo, Japan, April 1, 2016.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 0.1 percent in the early trade, a day after it fell 1.6 percent, its biggest fall in almost two months.
Japan's Nikkei .N225 was flat after Tuesday's 2.4 percent fall.
On Wall Street, the S&P 500 .SPX lost 1.01 percent on Tuesday as investors took profits on recent gains ahead of a quarterly reporting season that is expected to reveal sharply lower earnings.
Asian shares and other riskier assets skidded on Tuesday, pressured by slumping crude oil prices and mixed messages from Federal Reserve policymakers on the outlook for U.S. interest rate rises.
Men walk past an electronic board showing market indices outside a brokerage in Tokyo, Japan, March 2, 2016
Oil prices continued to drop after shedding more than 2 percent overnight, as investors doubted that oil producing countries would freeze output to address a global glut.
Brent lost 0.6 percent to $37.48 a barrel after losing 2.5 percent on Monday. U.S. crude lost nearly 3 percent overnight, and on Tuesday was down about 0.8 percent at $35.40.
MSCI's broadest index of Asia-Pacific shares outside Japan was down 1.3 percent. Japan's Nikkei stock index dropped 2.1 percent to six-week lows, as the perceived safe-haven yen rallied.
A little-known Russian businessman from St Petersburg has provided properties to multiple women who share one common theme: President Vladimir Putin.
Russian
President Vladimir Putin (L) smiles next to Russian gymnast Alina Kabaeva
during a meeting with the Russian Olympic team at the Kremlin in Moscow, Russia
in this November 4, 2004
One of the women is Putin's younger daughter; two are close relatives of a woman Russian media have reported to be Putin's girlfriend – though the president has strongly denied any relationship. And a fourth is a student who posed for a calendar celebrating the president's birthday. All of the properties are in upmarket gated complexes in and around Moscow.
Takata Corp (7312.T) on Thursday denied that it had
calculated the estimated costs of a global recall of its potentially faulty air
bag parts, after a Bloomberg News report that it could face $24 billion in
costs in a worst-case scenario.
"We have not announced anything to the
effect of the report, and it is untrue that we have calculated the estimated
costs (of the recall)," the Tokyo-based company said in a statement.
It added that given that investigations into
the cause of its exploding airbag inflators were still underway, it was
difficult to determine the recall costs at the moment.
Asian shares rose on Thursday, taking early cues from Wall Street gains overnight, as receding worries of near-term U.S. interest rate hikes continued to buoy risk sentiment.
The dollar hovered near seven-week lows versus the euro as cautious comments from Federal Reserve Chair Janet Yellen earlier in the week on monetary tightening continued to resonate.
A pedestrian stands to look at an electronic board showing the stock market in Tokyo, Japan 26 Feb 2016
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.4 percent. Australian stocks added 1.3 percent. Japan's Nikkei .N225 rose 0.7 percent.
World oil prices retreated on Tuesday as worries about global oversupply returned to the forefront ahead of a US petroleum inventory report.
NEW YORK: World oil prices retreated on Tuesday (Mar 29) as worries about global oversupply returned to the forefront ahead of a US petroleum inventory report.
US benchmark West Texas Intermediate for May delivery lost US$1.11 at US$38.28 a barrel on the New York Mercantile Exchange. Brent North Sea oil for May delivery fell US$1.13 to US$39.14 a barrel in London.
The losses came ahead of a Wednesday US petroleum inventory report that many analysts believe will show another build in supplies.
Analysts also cited rising doubts about a potential deal of major producers to limit output, with those questions underscored by an agreement on Tuesday between Saudi Arabia and Kuwait to resume pumping oil at the offshore Khafji field.
Production at Khafji, which pumped over 300,000 barrels per day and was jointly operated by the two countries, was halted in October 2014. Riyadh cited environmental issues for the shutdown. But the two sides plan to ramp up output "gradually," said Kuwait acting oil minister Anas al-Saleh.
However, analysts questioned how the Khafji deal fits into a promise by Saudi Arabia and Kuwait to abide by a potential agreement of major producers to cap output. Major producers are set to convene in Qatar in April.
"A freeze may be tested" by Khafji, said Tim Evans, analyst at Citi Futures. "Without some clarification to the effect that overall output won't be increased, even the freeze idea may not hold," Evans said.
Gary Cunningham, manager of market research at Tradition Energy, said even if a deal among major producers is enacted and respected, "you're still going to have considerable overproduction."
Oil prices rallied a bit following a speech by Federal Reserve Chair Janet Yellen that signalled a cautious approach to further US interest rate hikes, depressing the dollar. A weaker dollar is supportive of oil prices, but analysts said the impact was not enough to offset concerns about oversupply in the oil market.
Investing in Asia’s worst-performing currency is all about the interest rate.
While the rupee fell 0.6 percent versus the dollar this year, flows from stock investors turned positive in March amid slower inflation, an improved current account and budgetary discipline. Including interest, investing in rupees will earn 3.2 percent from now until Dec. 31, according to strategists’ forecasts compiled by Bloomberg, the most in emerging Asia.
“The rupee remains a very attractive play over a one-year horizon,” said Viraj Patel, a London-based strategist at ING Groep NV, among the most-accurate rupee forecasters in Bloomberg’s rankings. “Lower inflation, a subdued current-account deficit, high growth and carry will all pay dividends in the future as the global economy turns the corner.”
Interest rates below zero in Europe and Japan are attracting investors to a nation that has the second-highest yield among key Asian markets and the fastest growth among major economies. The rupee’s allure has been burnished by central bank Governor Raghuram Rajan’s success in replenishing foreign-exchange reserves and taming consumer prices and the trade deficit.
Prime Minister Narendra Modi’s Feb. 29 budget sparked a rally in India’s rupee, bonds and stocks as the government’s resolve to narrow the fiscal deficit to a nine-year low boosted investor sentiment. Data showing inflation eased to a four-month low in February also increased odds of interest-rate cuts by Rajan, while demand for emerging-market assets has picked up amid global central bank stimulus.
‘Quite Alluring’
Ten-year bonds in India pay 7.51 percent even after the yield has slumped 27 basis points from Feb. 26, the last trading day before the budget. Similar-maturity notes offer 7.76 percent in Indonesia and 2.83 percent in China. Foreign holdings of rupee-denominated government and corporate debt rose 44.9 billion rupees ($677 million) in the last two weeks, the most for such a period since October.
“We are in a very-low interest rate world,” said Vishnu Varathan, a Singapore-based economist at Mizuho Bank Ltd. “India’s superior growth versus rest of the region alongside the central bank’s commitment to inflation stability means that on a risk-adjusted basis, the carry proposition of the rupee will look quite alluring.”
The rupee has surged 2.8 percent in March to head for its biggest monthly advance in two years. The jump follows a 3.3 percent decline in the first two months of 2016, during which it fell to the brink of its record low of 68.845 a dollar seen in August 2013. The rebound provided the RBI an opportunity to accumulate foreign-exchange reserves, which reached a record $355.95 billion in the week through March 18.
Mizuho forecasts the rupee to end 2016 at 64.50 a dollar, a level that is 3.2 percent stronger than the currency’s close of 66.54 in Mumbai on Tuesday. ING has an year-end projection of 66. These predictions are at odds with Barclays Plc and Morgan Stanley, which say a strengthening dollar and weak global risk appetite will bring more pain for the Indian currency, with Morgan Stanley estimating a drop to 73 by Dec. 31.
India has eclipsed China as the world’s fastest-growing major economy with gross domestic product projected to expand 7.6 percent in the fiscal year through March. The slump in Brent crude prices has benefited the net oil importer, with the trade deficit for Asia’s third-largest economy shrinking in February to the smallest since September 2013. The current-account deficit in the three months through December narrowed to $7.1 billion, from $8.7 billion in the previous quarter.
‘In Vogue’
The Federal Reserve’s decision this month to scale back expectations for the path of interest-rate increases came as a shot in the arm for developing-nation assets. Fed Chair Janet Yellen on Tuesday reasserted the central bank’s gradual approach to raising borrowing costs, prompting gains in shares from Sydney to Seoul on Wednesday.
Global funds have poured a net $3.1 billion into Indian stocks in March, taking inflows for the year to $209 million, data compiled by Bloomberg show. Investing in rupees returned 3 percent, including interest, in the past four quarters, data compiled by Bloomberg show, the highest in Asia. The rupee weakened 4.7 percent in the period.
“With the Fed now taking the foot off the pedal in terms of rate hikes, high-yield emerging-market currencies will be back in vogue and the rupee will be among those in demand,” said Patel of ING. “Oil prices remain the key. If we start to get a sharp rebound, then both the current account and monetary policy could come under scrutiny.”
The rout in the Shanghai Composite Index, which has lost more than a third of its value since the end of April 2015, followed one of the benchmark’s best rallies ever and shocked global markets as indicated by how badly the analysts covering Chinese equities performed. Their predictions were off by bigger margins than those of analysts researching stocks in the rest of the world’s 20 largest markets.
