International markets roundup
NEW YORK - Both the Dow and S&P 500 have edged higher while the Nasdaq has lost ground in choppy trading in the wake of comments by US Commerce Secretary Wilbur Ross that hinted at action against China in a trade war.
Speaking at the World Economic Forum in Davos, Ross said US trade authorities were investigating whether there is a case for taking action over China's infringements of intellectual property.
That was enough to erase early gains and send the S&P down as much as 0.5 per cent after equities were initially lifted by another round of solid earnings and a drop in the dollar, which supports large multinational companies.
The Dow and S&P were able to claw back to the upside as investors chose to wait for concrete action.
"It's a lot of bloviating that really doesn't matter to anyone," said Stephen Massocca, Senior Vice President at Wedbush Securities in San Francisco.
"It's only natural for markets from a technical perspective to rest after they have had this type of move, or even decline a little bit, that is just a valuation trade."
The dollar fell 1.01 per cent against a basket of currencies after US Treasury Secretary Steven Mnuchin welcomed the currency's weakness.
Worries about a protectionist stance have added to the dollar's woes after US President Donald Trump slapped steep tariffs on imported washing machines and solar panels on Monday.
Bank stocks were among the gainers, tracking a rise in US Treasury yields following the dip in dollar. JPMorgan and Goldman Sachs rose more than 1 per cent.
The Dow Jones Industrial Average rose 63.55 points, or 0.24 per cent, to 26,274.36, the S&P 500 gained 3.17 points, or 0.11 per cent, to 2,842.3 and the Nasdaq Composite dropped 24.34 points, or 0.33 per cent, to 7,435.95.
Earnings season continues to come in strong, with S&P 500 growth expected at 12.4 per cent, according to Thomson Reuters data through Wednesday morning.
Of the 88 companies in the index that have posted results, 78.4 per cent have topped expectations versus the 72 per cent beat rate for the past four quarters.
Among those posting results, General Electric fell 2.34 per cent after the company revealed a regulatory investigation of a multibillion-dollar insurance charge.
The company in its earnings report forecast further weakening of its troubled power business and reported a $10 billion loss and a 5-per cent fall in revenue.
Semiconductor stocks were off 2.07 per cent and pulled the Nasdaq lower as Texas Instruments slumped 8.03 per cent after it posted the slowest revenue growth in four quarters on softer demand for its chips used in communications equipment.
LONDON - Britain's top share index fell as sterling was pushed to a post-Brexit-vote high by data showing that the number of people in work had surged unexpectedly.
The FTSE 100 ended the session down 1.1 per cent at a three-week low of 7,643.43 points. The blue-chip index underperformed its continental European peers as the pound rose above $1.42, a level not seen since June 2016.
The UK jobs data boosted gilt yields, dimming the appeal of consumer staples stocks that are a favourite among income investors. Among those were BAT and Reckitt Benckiser, which contributed most to the FTSE's fall.
The slow recovery of sterling since the June 2016 Brexit vote has given an accounting boost to UK blue chips with revenue in dollars. A weak pound typically supports the FTSE while its rise usually drags on the index.
"It is becoming increasingly difficult for the Bank of England to justify its ultra-accommodative policy stance," said Kallum Pickering, a senior economist at Berenberg.
Given the buoyant employment data, Pickering expects two interest rates hikes in 2018, which could provide yet further support to the pound.
Miners were the only group to gain ground, with Fresnillo up 3.7 per cent after posting record annual silver production. Anglo American and Randgold Resources were up 0.8 per cent and 3 per cent respectively.
Chilean copper producer Antofagasta, however, fell 0.8 per cent after reporting a drop in fourth-quarter production and said it expected 2018 costs to be higher.
Software company Sage Group was by far the worst performer, down 6.5 per cent after its first-quarter results.
"Q1 is slightly disappointing, even allowing for usually slower growth rates at this juncture," Investec analysts said.
Shares in exchange operator LSE led the 20 or so stocks in positive territory, rising 5 per cent on the back of a media report saying that activist hedge fund TCI was predicting a 15 billion pound ($21.3 billion) takeover bid for the company.
Outside of the blue chips, British pubs group JD Wetherspoon issued upbeat guidance and strong comparable sales in the Christmas period, lifting its share price by 2.3 per cent
HONG KONG - Hong Kong's benchmark Hang Seng Index rose for a seventh day in a row to end at a new high, as strength in energy shares offset weakness in IT and finance plays.
At close of trade, the Hang Seng index was up 27.99 points or 0.08 per cent at 32,958.69.
The Hang Seng China Enterprises index rose 0.97 per cent to 13,620.93.
The sub-index of the Hang Seng tracking energy shares rose 3.7 per cent while the IT sector dipped 0.97 per cent, the financial sector was 0.14 per cent lower and property sector dipped 0.58 per cent.
The top gainer on Hang Seng was PetroChina Co Ltd up 5.25 per cent, while the biggest loser was Ping An Insurance Group Co of China Ltd which was down 2.49 per cent.
China's main Shanghai Composite index closed up 0.4 per cent at 3,560.7329 points while its blue-chip CSI300 index ended up 0.19 per cent.
Around the region, MSCI's Asia ex-Japan stock index was barely changed while Japan's Nikkei index closed down 0.76 per cent .
WELLINGTON - The S&P/NZX50 Index gained 16.46 points, or 0.2 per cent, to 8324.09, with A2 Milk and Mercury Energy gaining while Metro Performance Glass fell.
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