Economy
Asian Equities Finish Mixed as US-China Trade Deal Sway Investors Sentiment
By Investors Hub
Asian stocks ended on a mixed note on Tuesday as investors awaited concrete details of a possible interim U.S.-China trade deal.
Chances of an early trade deal brightened after U.S. President Donald Trump said he expected to sign a significant part of the deal ahead of schedule but did not specify an exact date.
The office of the U.S. Trade Representative said Monday that Washington would consider whether to extend certain tariff suspensions on $34 billion worth of imports from China that are set to expire on December 28 this year.
Investors also awaited a Federal Reserve interest rate decision this week for clues on the future path of U.S. interest rates.
Chinese shares fell despite Trump’s upbeat remarks about the prospects for a trade deal with China. The benchmark Shanghai Composite Index dropped 25.87 points, or 0.9 percent, to 2,954.18, while Hong Kong’s Hang Seng Index ended down 104.50 points, or 0.4 percent, at 26,786.76.
Japanese shares hit their highest level in more than a year after Trump said he hopes to sign a trade deal with China’s President Xi Jinping next month at a summit in Chile.
The Nikkei 225 Index climbed 106.86 points, or 0.5 percent, to 22,974.13 after hitting as high as 23,008.43 earlier in the day, the highest since October 11, 2018. The broader Topix closed 0.9 percent higher at 1,662.68.
Toyota Motor, Sony, Honda Motor and Nissan Motor rallied 1-2 percent as the yen traded marginally lower after the release of inflation data.
Japanese core consumer prices, which exclude volatile food prices, rose an annual 0.5 percent in October, staying well below the Bank of Japan’s elusive 2 percent target and keeping the central bank under pressure to ramp up stimulus.
Canon shed 0.8 percent after the company lowered its fiscal 2019 earnings outlook for the third time.
Market heavyweight SoftBank Group jumped 2.6 percent on reports that Saudi Arabia is discussing the possibility of investing more money into its second Vision Fund.
Australian markets fluctuated before closing on a flat note. The benchmark S&P/ASX 200 Index inched up 4.70 points, or 0.1 percent, to 6,745.40, while the broader All Ordinaries Index crept up 6 points, or 0.1 percent, to 6,848.50.
Mining heavyweights BHP and Rio Tinto surged more than 1 percent each. Energy stocks finished broadly lower after crude oil prices closed lower overnight to snap a four-day winning streak.
Bravura Solution soared 4.7 percent after the company said it would acquire FinoComp for a total consideration of $25 million.
Bega Cheese slumped 12.8 percent as the diary and grocery producer warned of weaker earnings in fiscal 2020 due to lower demand for its unbranded products and higher milk prices.
Seoul stocks ended marginally lower after survey data from the Bank of Korea showed that confidence among South Korean manufacturers is set to weaken in November.
The business survey index on business conditions in manufacturing rose one point to 72 in October, but the outlook for next month fell one point to 72.
By Dipo Olowookere
The bears have refused to vacate the Nigerian Exchange (NGX) Limited, further inflicting a 0.07 per cent loss on the bourse on Monday due to sustained profit-taking.
Data from Customs Street indicated that sell-offs were more pronounced in the financial services sector during the session, with the insurance index down by 1.48 per cent, and the banking counter shedding 0.46 per cent.
They rubbed out the gains recorded by the other sectors, as the consumer goods segment rose by 0.43 per cent and the energy index gained 0.01 per cent, while the industrial goods space closed flat.
When the closing gong was struck to signify the close of transactions, the All-Share Index (ASI) shrank by 164.55 points to 242,454.65 points from 242,619.20 points, and the market capitalisation decreased by N106 billion to N156.518 trillion from the preceding session’s N156.624 trillion.
Investor sentiment remained bearish yesterday, as the stock market ended with 19 price gainers and 36 price losers, implying a negative market breadth index.
RT Briscoe lost 9.91 per cent to finish at N10.45, Fortis Global Insurance slumped by 9.89 per cent to N2.37, McNichols depreciated by 9.62 per cent to N4.70, University Press dropped 9.35 per cent to close at N4.85, and NEM Insurance dipped by 8.83 per cent to N30.45.
Conversely, Trans-Nationwide Express gained 9.86 per cent to trade at N3.12, AVA Capital expanded by 9.72 per cent to N7.90, Thomas Wyatt went up by 9.09 per cent to N3.00, Legend Internet improved by 8.75 per cent to N4.35, and Dangote Sugar soared by 8.60 per cent to N70.10.
On the activity chart, the trading volume retreated by 7.14 per cent to 1.3 billion units from 1.4 billion units last Friday. The trading value went down by 49.45 per cent to N22.9 billion from N45.3 billion, while the number of deals surged by 16.25 per cent to 45,494 deals from 39,134 deals.
At the close of trades, Lasaco Assurance transacted 730.7 million shares worth N1.3 billion, Consolidated Hallmark traded 154.3 million equities for N1.1 billion, Cornerstone Insurance exchanged 106.1 million stocks valued at N535.4 million, Chams sold 25.3 million shares worth N108.4 million, and First Holdco transacted 25.0 million equities for N3.4 billion.
By Adedapo Adesanya
The Naira appreciated against the United States Dollar by N8.07 or 0.59 per cent in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Monday, August 17, to N1,349.54/$1 from last Friday’s N1,357.61/$1.
Similarly, the Nigerian Naira gained N9.99 against the Pound Sterling in the official FX market during the session to settle at N1,830.11/£1 versus the previous day’s N1,840.10/£1, and improved its value against the Euro by N6.91 to close at N1,564.79/€1 compared with the preceding session’s N1,571.70/€1.
However, the Nigerian currency traded flat against the US Dollar yesterday at the parallel market at N1,395/$1, and at the GTBank forex counter, it remained unchanged at N1,364/$1.
Interbank FX turnover, according to data from the Central Bank of Nigeria (CBN), accelerated by 265 per cent to $437.529 million from last Friday’s $119.594 million, with the number of deals rising to 178 from 137.
Total FX inflows into the NAFEM window increased significantly to $1.77 billion from $0.83 billion in the previous week, according to the research subsidiary of Coronation Group.
Domestic sources accounted for 63.44 per cent of total inflows, driven primarily by Exporters (31.2 per cent) and Non-Bank Corporates (17.7 per cent), underscoring the growing contribution of autonomous market participants to FX supply.
Notably, the central bank injected $252.1 million, representing 14.3 per cent of total inflows, to enhance market liquidity. On the external side, Foreign Portfolio Investors (FPIs) remained the largest single source of FX, contributing 33.71 per cent of aggregate inflows.
Meanwhile, the cryptocurrency market was mixed on Monday, with Bitcoin (BTC) up by 0.9 per cent to $64,153.93, and Solana (SOL) gaining 0.3 per cent to sell at $75.602.
This occurred amid broader markets continuing their climb following President Donald Trump saying he was not interested in extending the expiring agreement with Iran, and as fighting flared again in Lebanon.
But Cardano (ADA) lost 2.2 per cent to finish at $0.1729, Ripple (XRP) declined by 0.8 per cent to $0.9939, Dogecoin (DOGE) slipped by 0.7 per cent to $0.0698, Binance Coin (BNB) crumbled by 0.4 per cent to $602.80, Ethereum (ETH) slid by 0.3 per cent to $1,892.96, and TRON (TRX) also depreciated by 0.3 per cent to $0.3314, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00, respectively.
By Adedapo Adesanya
Crude oil prices gained more than $2 on Monday amid global supply worries stoked by investor pessimism about diplomatic efforts to resolve the US-Iran war.
Brent crude futures chalked up $2.35 or 2.65 per cent to trade at $90.87 a barrel, while the US West Texas Intermediate (WTI) crude futures grew by $2.10 or 2.55 per cent to $84.50 a barrel.
President Donald Trump said the US was not seeking an extension of the memorandum of understanding with Iran. He also told reporters Iran would not make the type of deal that he thought was necessary.
He further demanded Iran’s surrender and threatened to bomb Oman if the country gets in its way.
Reuters reported that Iran would escalate tensions in the Strait of Hormuz, citing officials and beyond, and launch an attack if the US fails to implement an interim peace deal fully in a matter of weeks.
Iran’s foreign minister has said the waterway will not reopen until America first returns to the deal, while the US Treasury Secretary has warned of unprecedented economic isolation for Iran.
Still, oil prices are unlikely to move substantially higher unless there is a halt in the current flow of crude out of the Strait of Hormuz at night and/or a closure of the Bab el-Mandeb Strait.
Tanker traffic via the Strait of Hormuz slowed further over the weekend, maintaining upward pressure on oil prices. Only five commodity vessels passed the Strait of Hormuz on Saturday, and none were scheduled to transit the waterway on Sunday, data from Kpler showed.
The data, however, does not include tankers that transit Hormuz in so-called dark mode. That compares with 31 tankers passing the Strait of Hormuz the previous weekend.
Before US-Israeli attacks on Iran began in late February, the strait handled about one-fifth of global oil and liquefied natural gas supplies.
Amid the development, Middle East producers like the United Arab Emirates (UAE) and Saudi Arabia stepped up sales to Asian countries.
ADNOC sold at least 14 million barrels of spot crude to Asian refiners at premiums in its latest tender, while Saudi Aramco is offering crude oil outside of the Strait of Hormuz to some Asian refiners.
News about a massive build in US oil inventories helped keep prices below peaks reached earlier in the year. Stocks of crude oil in the US Strategic Petroleum Reserve fell by about 5.3 million barrels to 293.4 million barrels last week, the lowest level since December 1982, according to data from the Department of Energy. The drawdowns are part of a US agreement to release 172 million barrels from the facility.
