Thursday, 21 May, 2015

Asian Stocks Pare Gain on China PMI; U.S. Futures, Dollar Weaken

(Bloomberg) — Asian stocks pared gains as a preliminary Chinese factory gauge missed estimates, reinforcing the need for further government stimulus. U.S. equity-index futures retreated and the dollar was weaker against most peers after a three-day rally. The MSCI Asia Pacific Index added 0.1 percent by 2:10 p.m. in Tokyo, as the Hang Seng China Enterprises Index fell 0.4 percent. Shares in Shanghai and Shenzhen advanced. Standard & Poor’s 500 Index futures slipped 0.2 percent. The dollar weakened 0.3 percent versus the euro and 0.2 percent against Japan’s yen. Oil in New York swung to a gain of 0.3 percent. The Bloomberg Commodity Index rose 0.3 percent. An early reading of HSBC Holdings Plc and Markit Economics’ May China factory gauge came in at 49.1, missing the 49.3 estimate of economists and below the 50 level that marks the threshold for expansion. Federal Reserve Chair Janet Yellen gives a speech Friday on the economic outlook after minutes from the central bank’s last meeting reinforced the message that borrowing costs could rise at any meeting. European leaders meet to discuss Greece’s debt situation. “The worse the data, the more speculation that more monetary stimulus will be coming,” said Wei Wei, an analyst at West China Securities Co. in Shanghai. “The market has a consensus that the economy won’t pick up any time soon so the impact of the economic data isn’t too big.” The China manufacturing index snapped a two-month decline while still signaling a contraction. Preliminary factory gauges for the euro area and the U.S. also due Thursday after a similar measure for Japan showed a quicker-than-estimated expansion. Hang Seng The Hang Seng Index was little changed after falling as much as 0.7 percent, and the gauge of Chinese companies listed in Hong Kong was lower for the first time in three days. The Shanghai Composite Index added 1.4 percent after gaining 3.8 percent in the previous two days. Goldin Properties Holdings Ltd., the builder of a luxury polo-themed estate near China’s Tianjin city, plunged as much as 61 percent in Hong Kong, while affiliated Goldin Financial Holdings Ltd. tumbled 62 percent. The companies controlled by billionaire Pan Sutong, which both surged more than 300 percent this year through yesterday, said they were unaware of any reasons for the price fluctuations. The drops follow Wednesday’s suspension of Hanergy Thin Film Power Group Ltd. after its stock plunged 47 percent, wiping out $19 billion in market value, as its chairman failed to appear at the annual general meeting. BHP Billiton Australia’s S&P/ASX 200 Index rose 0.9 percent after slipping Wednesday to its lowest close since the end of January. BHP Billiton Ltd., the world’s largest miner climbed 1.5 percent after a three-day slide following a spin-off. The Kospi index in Seoul fell 0.8 percent. Fed policy makers concluded that the first-quarter slowdown in the U.S. economy was unlikely to persist, the minutes showed. While “many” officials signaled a June liftoff would be unlikely, a “few” members said they anticipated the economy would be ready by then for the first rate increase since 2006. Futures on the Dow Jones Industrial Average and the Nasdaq 100 Index also declined. The Bloomberg Dollar Spot Index, a gauge of the currency versus 10 major peers, fell 0.1 percent Thursday after rallying almost 2 percent through the past three days. The yen strengthened to 121.05 per dollar, while the ringgit snapped a three-day drop to climb 0.4 percent. The euro climbed to $1.1124 after touching a three-week low Wednesday. Australia’s dollar gained 0.4 percent and the Swiss franc advanced 0.3 percent. Emergency Funds European Union leaders are due to meet with Greek Prime Minister Alexis Tsipras in Latvia’s capital Riga, amid continued wrangling over the indebted nation’s bailout. The European Central Bank’s Governing Council consented at a meeting in Frankfurt on Wednesday to a 200 million-euro ($222 million) increase in emergency funding for Greek banks, people familiar with the discussion said. July futures on West Texas Intermediate crude climbed 0.3 percent to $59.14 a barrel in New York after rising 1.7 percent on Wednesday, the most since May 12. Brent added 0.4 percent to $65.28 a barrel in London. U.S. crude inventories shrank by 2.67 million barrels through May 15, the Energy Information Administration reported Wednesday. Prices may fall further as drillers become more efficient and the Organization of Petroleum Exporting Countries refrains from cutting output, according to Deutsche Bank AG. Copper advanced as much as 0.6 percent, while zinc rose for the first time in seven days. London Metal Exchange copper stockpiles fell the most in almost a month Wednesday. The China “PMI indicates that physical demand may have started improving,” said Zhu Wenjun, a Shanghai-based analyst at Citic Futures Co. “Investors will also be looking for government policy support to get levels back above 50.” Archr LLP is Authorised and regulated by the Financial Conduct Authority (FCA reference 617163). Archr LLP is not covered by the Financial Services Compensation Scheme (FSCS). Archr is registered in England and Wales No. OC371018. Registered office Chancery House, 30 St Johns Road, Woking, Surrey, GU21 7SA This message may contain confidential or privileged information. If you are not the intended recipient, please advise us immediately and delete this message. The unauthorised use, disclosure, distribution and/or copying of this e-mail or any information it contains is prohibited. 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