Share-Market
Asian shares fall amid interest rate, earnings worries
Asian shares declined Monday after U.S. stocks ended last week on a tumble as global markets’ expectations for higher interest rates continued to set the tone.
Japan’s benchmark Nikkei 225 lost 1.9% in morning trading to 26,583.70. South Korea’s Kospi slipped 1.6% to 2,661.94. Hong Kong’s Hang Seng dropped 2.8% to 20,064.32, while the Shanghai Composite shed 2.4% to 3,012.93. Trading was closed in Australia for Anzac Day, a national holiday.
The news that Emmanuel Macron won the run-off French presidential election over the weekend, clinching a second term as was widely expected, reassured markets that France won’t abruptly shift course in the midst of the war in Ukraine.
Read: Asian stocks mixed, oil falls as Russian attacks intensify
But a significant show from contender Marine Le Pen, a populist and nationalist, served as a reminder of how fragile that situation might be, analysts said. Le Pen pledged to dilute French ties with the EU, NATO and Germany, and spoke out against EU sanctions on Russian energy supplies.
Rising COVID-19 cases in China are setting off worries about more pandemic lockdowns that would crimp economic recoveries in the region. Other nations are also dealing with economic woes related to COVID-19, such as the absence of tourism revenue in Japan, where cases are still going up and down while it gradually opens its borders, but only to business travelers.
Investors are also watching profit reports from companies, including Japanese big names that are coming in weeks ahead. Several reports from U.S. companies, which have already been released, have been disappointing, contributing to the fall that ended last week on Wall Street.
What the U.S. Federal Reserve might do is high on investors’ minds. The chair of the Federal Reserve has indicated the central bank may hike short-term interest rates by double the usual amount at upcoming meetings, starting in two weeks. The Fed has already raised its key overnight rate once, the first such increase since 2018.
The S&P 500 fell 2.8% Friday to 4,271.78, marking its third losing week in a row. The Dow dropped 2.8% to 33,811.40, its biggest drop in 18 months. The Nasdaq lost 2.6%, closing at 12,839.29. The Dow and Nasdaq also posted losses for the week.
Read: Upto 50% of hotels, motels booked already for Eid holidays
Smaller company stocks also fell sharply. The Russell 2000 slid 2.6% to 1,940.66.
“Coming after the heavy sell-off in Wall Street to end last week, overall risk appetite in the region may come under pressure as well,” said Yeap Jun Rong, market strategist at IG in Singapore.
Markets around the world are feeling similar pressure on rates and inflation, particularly in Europe as the war in Ukraine pushes up oil, gas and food costs.
In energy trading, benchmark U.S. crude lost $2.91 to $99.16 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, fell $2.93 to $103.72 a barrel.
In currency trading, the U.S. dollar edged down to 128.51 Japanese yen from 128.59 yen. The euro cost $1.0789, down from $1.0803.
Asian stocks mixed, oil falls as Russian attacks intensify
Stocks were mixed in Asia and oil prices fell Monday as uncertainty over the war in Ukraine and persistently high inflation kept investors guessing about what lies ahead.
Tokyo and Sydney advanced while Hong Kong, Seoul and Shanghai declined. U.S. futures were higher.
Ukrainian President Volodymyr Zelenskyy vowed to keep negotiating with Russia, as Russian forced bombarded a military training base near the Polish border, killing nine and wounding dozens of people. Talks aimed at reaching a cease-fire failed again on Saturday,
Russia’s widening of its offensive to the western part of Ukraine comes amid warnings over the widening impact from the conflict. Moody’s Investor Service said it was reviewing its credit ratings for both countries in view of rising security, economic and financial risks.
Read: Brent crude up $10, shares sink as Ukraine conflict deepens
Spreading outbreaks of coronavirus in China have added to uncertainties, with authorities ordering a lockdown in the technology and manufacturing hub of Shenzhen, near Hong Kong, that could worsen supply chain disruptions.
Hong Kong’s Hang Seng index lost 3.8% to 19,779.91 and the Shanghai Composite index slipped 1.3% to 3,266.73.
Chinese shares have also come under selling pressure due to the threat of de-listings of major Chinese companies on U.S. stock exchanges. A report in the state-run newspaper Economic Daily said Monday that regulators are negotiating to resolve a dispute over auditing rules.
The Securities and Exchange Commission has moved to require that U.S.-listed foreign stocks disclose their ownership structures and audit reports. That has come on top of technology-related sanctions against some companies.
Wang Sheng, head of the investment banking division at China International Capital Corp, said in an opinion piece that China and the U.S. should be able to strike a deal.
Tokyo’s Nikkei 225 index rose 0.6% to 25,318.75 and the S&P/ASX 200 gained 1.2% to 7,147.80. South Korea’s Kospi lost 0.9% to 2,637.07.
On Friday, the S&P 500 fell 1.3% to 4,204.31. The Dow Jones Industrial Average lost 0.7% to 32,944.19, while the Nasdaq composite index gave up 2.2% to 12,843.81. The Russell 2000 index of smaller companies slipped 1.6% to 1,979.67.
World markets have been rocked by dramatic reversals as investors struggle to guess how Russia’s invasion of Ukraine will affect prices of oil, wheat and other commodities produced in the region.
Read: World shares drop after Putin orders troops to east Ukraine
That’s raising the risk the U.S. economy may struggle under a toxic combination of persistently high inflation and stagnating growth. The Federal Reserve is expected to raise interest rates at its meeting this week as it and other central banks act to stamp out the highest inflation in generations, while trying to avoid causing a recession by raising rates too high or too quickly.
Amid all the uncertainty, U.S. stocks remain about 10% below their peak from earlier this year, while crude oil prices remain more than 40% higher for 2022 so far.
U.S. benchmark crude oil lost $3.16 to $106.17 per barrel in electronic trading on the New York Mercantile Exchange. It surged $3.31 per barrel on Friday to $109.33 per barrel.
Brent crude oil, the standard for international pricing, declined $3.05 to $109.59 per barrel.
The U.S. dollar rose to 117.83 Japanese yen from 117.35 yen. The euro weakened to $1.0906 from $1.0926.
Brent crude up $10, shares sink as Ukraine conflict deepens
The price of oil jumped more than $10 a barrel and shares were sharply lower Monday as the conflict in Ukraine deepened amid mounting calls for harsher sanctions against Russia.
Brent crude oil surged over $10 early Monday. Benchmark U.S. crude was up nearly $9 at more than $124 a barrel.
The surge followed a warning from Russian President Vladimir Putin that Ukrainian statehood was imperiled as Russian forces battered strategic locations. A temporary cease-fire in two Ukrainian cities failed over the weekend — and both sides blamed each other.
Oil prices came under additional pressure after Libya’s national oil company said an armed group had shut down two crucial oil fields. The move caused the country’s daily oil output to drop by 330,000.
U.S. House of Representatives Speaker Nancy Pelosi, meanwhile, said the House was exploring legislation to further isolate Russia from the global economy, including banning the import of its oil and energy products into the U.S.
By late morning in Tokyo, U.S. crude had jumped $9.08 to $124.74 a barrel in electronic trading on the New York Mercantile Exchange. The all-time high was marked in July 2008, when the price per barrel of U.S. crude climbed to $145.29.
That pushed the average price for gasoline in the U.S. above $4 a gallon, a milestone already reached again. The price of regular gasoline rose almost 41 cents, breaking $4 per gallon (3.8 liters) on average across the U.S. on Sunday for the first time since 2008, according to the AAA motor club.
Read: Asian stocks rebound after Wall St falls on Ukraine tensions
The all-time high for average gasoline prices was set in July 17, 2008 at $4.10 per gallon.
Brent crude, the international pricing standard, hit $139.13 per barrel before falling back Monday. It was trading up $10.56 at $128.67 a barrel.
On Wall Street, U.S. futures fell, with the contract for the benchmark S&P 500 down 1.6% and that for the Dow industrials falling 1.3%. Stock futures in Europe also declined.
Higher fuel costs are devastating for Japan, which imports almost all its energy. Japan’s benchmark Nikkei 225 dipped 3.5% in morning trading to 25,091.93.
Hong Kong’s Hang Seng dropped 4.0% to 21,021.38, while South Korea’s Kospi dived 2.5% to 2,648.48. Australia’s S&P/ASX 200 shed 1.2% to 7,023.10. while the Shanghai Composite lost nearly 0.8% to 3,421.81.
“The Ukraine-Russia conflict will continue to dominate market sentiments and no signs of conflict resolution thus far may likely put a cap on risk sentiments into the new week,” said Yeap Jun Rong, market strategist at IG in Singapore.
“It should be clear by now that economic sanctions will not deter any aggression from the Russians, but will serve more as a punitive measure at the expense of implication on global economic growth. Elevated oil prices may pose a threat to firms’ margins and consumer spending outlook.”
Markets worldwide have swung wildly recently on worries about how high prices for oil, wheat and other commodities produced in the region will go because of Russia’s invasion, inflaming the world’s already high inflation.
Russian forces intensified shelling of cities in Ukraine’s center, north and south, according to a Ukrainian official, as a second attempt to evacuate civilians collapsed. Russia has made significant advances in southern Ukraine and along the coast, although many of its efforts have stalled, including an immense military convoy north of Kyiv.
Read: Netflix, TikTok block services in Russia to avoid crackdown
Companies have been exiting Russia, including Mastercard and Visa, as well as Netflix. The conflict in Ukraine also threatens the food supply in some regions, including Europe, Africa and Asia, which rely on the vast, fertile farmlands of the Black Sea region, known as the “breadbasket of the world.”
Wall Street finished last week with shares falling despite a much stronger report on U.S. jobs than economists expected. The S&P 500 fell 0.8% to 4,328.87, posting its third weekly loss in the last four. It is now down just under 10% from its record set early this year.
The Dow, initially fell more than 500 points. It closed 0.5% lower at 33,614.80. The Nasdaq fell 1.7% to 13,313.44. The Russell 2000 index of small companies dropped 1.6% to 2,000.90.
In currency trading, the U.S. dollar edged up to 114.93 Japanese yen from 114.86 yen. The euro cost $1.0846, down from $1.0926.
DSE cracks whip on Modern Securities
The Dhaka Stock Exchange (DSE) has cracked the whip on Modern Securities Limited, having found a deficit of Tk 7 crore in the consolidated customers’ account of the brokerage firm.
The DSE has now given Modern Securities three working days to return the money to their customers' account, also seeking an explanation from the firm's top honchos on the discrepancy within a week.
Read: Investors lose Tk 10,261 crore at DSE in one week
The DSE's action followed an investigation in the wake of allegations against the brokerage house.
A DSE team, led by Shafiqul Islam Bhuiyan, head and deputy general manager of DSE's monitoring and compliance department, visited the brokerage house on February 9.
Earlier too, at least three brokerage firms -- Banco, Crest and Tamha Securities -- were caught indulging in the same violation.
Asian stocks rebound after Wall St falls on Ukraine tensions
Asian stock markets rebounded Wednesday after Wall Street slid on anxiety over President Vladimir Putin’s authorization to send Russian soldiers into eastern Ukraine.
Shanghai, Hong Kong, South Korea and Australia advanced. Oil prices edged higher on concern about possible disruption to Russian supplies. Japanese markets were closed for a holiday.
Global stock prices sank Tuesday as traders tried to figure out the impact of Russia’s moves and sanctions imposed by Washington, Britain and the 27-nation European Union on its banks, officials and business leaders.
“Current U.S. sanctions on Russia are less-than-feared by the market,” said Anderson Alves of ActivTrades in a report. However, Alves noted American officials have more “acute options” including reducing Russia’s access to the SWIFT system for global bank transactions.
Wall Street’s benchmark S&P 500 index lost 1% on Tuesday to 4,304.76. That puts it 10.3% below its Jan. 3 all-time high and into what traders call a correction, or a decline of at least 10% but less than 20%.
On Wednesday, the Shanghai Composite Index rose 0.4% to 3,469.57 and the Hang Seng in Hong Kong gained 0.6% to 23,657.49.
Read: World shares drop after Putin orders troops to east Ukraine
The Kospi in Seoul advanced 0.2% to 2,712.69 and Sydney’s S&P-ASX 200 added 0.4% to 7,186.30.
New Zealand and Indonesia gained. Singapore and Bangkok declined.
Also Tuesday, Wall Street’s Dow Jones Industrial Average fell 1.4% to 33,596.61. The Nasdaq composite lost 1.2% to 13,381.52.
U.S. stocks were already off their early Jan. 3 peak due to uncertainty about the impact of the Federal Reserve’s decision to withdraw ultra-low interest rates and other economic stimulus.
Markets were rattled after Putin recognized the independence of rebel-held areas in Ukraine and sent in troops in defiance of U.S. and European pressure.
Wheat prices rose on concern about supplies from Russia and Ukraine being disrupted.
Prices of nickel and aluminum, for which Russia is a major supplier, also rose.
European natural gas prices jumped after Germany withdrew a key document needed for certification of the Nord Stream 2 gas pipeline from Russia.
In energy markets, benchmark U.S. crude rose 43 cents per barrel to $91.94 in electronic trading on the New York Mercantile Exchange. The contract rose $1.28 on Tuesday to $92.35. Brent crude, the price basis for international oils, advanced 4 cents to $93.89 per barrel in London. It gained $1.45 the previous session to $96.84.
The dollar was little-changed at 115.08 yen. The euro declined to $1.1324 from $1.1334.
World shares drop after Putin orders troops to east Ukraine
Shares fell sharply in Asia on Tuesday after Russian President Vladimir Putin ordered troops into separatist regions of eastern Ukraine, suggesting a long-feared invasion was possibly underway.
Tokyo’s Nikkei 225 index dropped 2.2% and the Hang Seng in Hong Kong fell 3.2% in early trading Tuesday. Oil prices jumped, with U.S. crude up 2.8%. The future for the S&P 500 dropped 1.7% while the contract for the Dow industrials lost 1.5%.
U.S. markets were closed on Monday for Presidents Day.
In Europe, shares slipped Monday as investors awaited developments in the Ukraine crisis. Germany’s DAX gave up 2.1%. In Paris, the CAC 40 in Paris declined 2%. Britain’s FTSE 100 fell 0.3%.
Russia’s MOEX index dropped nearly 11%. The ruble was down 3.2% against the U.S. dollar.
Western powers fear Russia might use skirmishes in Ukraine’s eastern regions as a pretext for an attack on the democracy, which has defied Moscow’s attempts to pull it back into its orbit.
A vaguely worded decree signed by Putin cast the order for troops to move into eastern Ukraine as an effort to “maintain peace.” He also recognized the independence of the separatist regions, apparently dashing slim remaining hopes of averting a conflict that could cause massive casualties, energy shortages on the continent and economic chaos around the globe.
The White House issued an executive order to prohibit U.S. investment and trade in the separatist regions, and additional measures — likely sanctions — were to be announced Tuesday.
In Asian trading, the Nikkei 225 in Tokyo was down 582.97 points at 26,327.90 while Hong Kong’s Hang Seng gave up nearly 800 points to 23,390.29. South Korea’s Kospi lost 1.8% to 2,693.38 and the Shanghai Composite index fell 1.2% to 3,448.49. Australia’s S&P/ASX 200 lost 1.4% to 7,134.50.
Russia is a major energy producer and the tensions have led to extremely volatile energy prices.
U.S. benchmark crude oil advanced $2.42 to $92.63 per barrel in electronic trading on the New York Mercantile Exchange.
Read: Asian shares mostly lower as markets watch Ukraine tensions
Brent crude, the international pricing basis, added $1.38 to $96.77 per barrel.
The tensions in Eastern Europe have added to worries over how the world’s central banks, especially the U.S. Federal Reserve, will act to counter surging inflation
Outbreaks of coronavirus fueled by the highly contagious omicron variant are another worry.
On Wall Street on Friday, stocks capped a week of volatile trading on Wall Street with a broad sell-off.
The S&P 500 and Dow Jones Industrial Average both slipped 0.7%. The Nasdaq composite bore the brunt of the selling, skidding 1.2%. Small company stocks also fell, with the Russell 2000 index down 0.9%.
Treasury yields have fallen as investors shift money into the safety of U.S. bonds. The yield on the 10-year Treasury, which affects rates on mortgages and other consumer loans, sank to 1.85% by early Tuesday from 1.93% on Monday.
In currency trading, the U.S. dollar slipped to 114.62 Japanese yen from 114.74 yen late Monday. The euro fell to $1.1300 from $1.1312.
Asian shares mostly lower as markets watch Ukraine tensions
Asian shares were mostly lower Tuesday, echoing a decline on Wall Street, amid concerns about rising tensions in Ukraine over the thousands of Russian troops that have been amassing on their border.
Japanese shares started with a boost from bargain-hunting after recent losses, but the buying quickly ran out of steam. Data released Tuesday showed the economy grew at an annual rate of 5.4% in October-December, when pandemic restrictions were relaxed for a time after infections fell sharply before rebounding with omicron outbreaks.
“While Japan’s outlook is challenged by virus resurgences and supply chain disruptions, the Q4 data highlighted the potential for pent-up consumer demand once virus risks eventually abate,” said Yeap Jun Rong, market strategist at IG in Singapore.
Japan’s benchmark Nikkei 225 shed 0.2% in morning trading to 27,024.54. Australia’s S&P/ASX 200 sank 0.5% to 7,209.10. South Korea’s Kospi lost 0.3% to 2,695.88. Hong Kong’s Hang Seng declined 0.5% to 24,433.63, while the Shanghai Composite rose 0.3% to 3,439.84.
On Wall Street, the S&P 500 fell 0.4% to 4,401.67 after falling as much as 1.2% shortly after the U.S. said it was closing its embassy in Ukraine and moving all remaining staffers there to a city near the Polish border. The move comes as diplomatic efforts continued Monday in a bid to head off what U.S. officials have warned could be an imminent Russian attack on Ukraine.
The Dow Jones Industrial Average fell 0.5% to 34,566.17 and the Nasdaq composite ended essentially flat, at 13,790.92, after having been up 1% in the early going.
Smaller company stocks, which had been on pace for gains, also fell. The Russell 2000 slid 0.5%, to 2,020.79.
On Friday, the White House told Americans to leave Ukraine within 48 hours over concerns that Russia could invade that country soon. Other governments including Russia pulled diplomats and their citizens out of the country.
Wall Street is also trying to gauge how stocks and the broader economy will be affected from another source of uncertainty: How far and how quickly the Federal Reserve will move to raise interest rates to quash surging inflation.
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The central bank is expected to start raising its benchmark interest rate in March and Wall Street expects as many as seven rate hikes this year after last week’s report that inflation jumped 7.5% in January from a year ago, the fastest increase in four decades. Prices also rose 0.6% from December to January, the same as the previous month, suggesting that price gains still aren’t slowing, as many economists and Fed officials have hoped.
The Fed typically responds to high inflation by making borrowing more expensive, which slows spending and the pace of price increases.
“The market is really paying attention to geopolitical stuff right now, whether it’s stuff out of Ukraine or in D.C. with respect to what the Fed is going to do,” said Willie Delwiche, investment strategist at All Star Charts. “The bigger story is inflation and rates. The Fed is catching up to inflation, the bond market is now taking the Fed seriously and the question is ’what do U.S. stocks do in that environment?”
Nations are still searching for a diplomatic solution to the situation and Russia’s top diplomat advised Russian President Vladimir Putin to continue a dialogue with the U.S. and its allies.
Investors also have their eye on the latest round of corporate earnings, in part to get a better understanding of how companies are dealing with high inflation. Some of the more notable companies reporting earnings this week include Airbnb on Tuesday, DoorDash on Wednesday and Walmart on Thursday.
Investors will also get more updates on inflation and how that might be impacting spending. The Labor Department will release its January report for prices at the wholesale level on Tuesday and the Commerce Department will release its January retail sales report on Wednesday.
In energy trading, benchmark U.S. crude lost 49 cents to $94.97 a barrel in electronic trading on the New York Mercantile Exchange. It climbed 2.5%, while natural gas prices jumped 6.4% on Monday. Russia is a major energy producer and military action that disrupts supplies could jolt markets and global industries. Brent crude, the international pricing standard, fell 47 cents to $96.01 a barrel.
In currency trading, the U.S. dollar sank to 115.37 Japanese yen from 115.55 yen. The euro cost $1.1310, up from $1.1306.
Enhance surveillance against manipulation to build sustainable share markets: Finance Ministry
The ministry of finance called strengthening capital markets literacy activities to raise awareness among investors to build sustainable stock markets for future generation. The ministry has given some specific directives to Bangladesh Securities and Exchange Commission (BSEC) as part of government's initiative to reform the sustainable capital market.
Read:Stock markets continue to fall on the third day Tuesday The Financial Institutions Division (FID), a wing of the finance ministry, has sent a letter with the directive to the BSEC chairman recently. The letter asked BSEC to enhance surveillance so that no company or institution can enter or exit the capital market illegally. At the same time, the letter mentioned that a team of finance ministry will keep a close watch on the markets, so that no dishonest syndicate can influence the capital market through manipulation.
Read:Capital market to follow banking sector's ‘lead’ in operating during lockdown The letter also directed BSEC to keep close observation on the companies, stakeholders or institutions’ share transactions in the capital market, and bring suspicious transactions under special scrutiny. The letter has also called for instant legal action if any company is found involved in anything illegal and strengthens coordination with all organizations involved in the capital market.
Stock markets continue to fall on the third day Tuesday
The benchmark index of Dhaka stock Exchange (DSE) fell for the third consecutive days on Tuesday.
The investors preferred remaining on the sideline like the previous couple of days as the DSEX fell by 43.68 points or 0.62 per cent to settle at 6954.35 on Tuesday. The share and unit price of majority of companies decreased.
The shares of 376 companies were traded on the day, of which 201 firms saw a fall in prices, 147 firms witnessed increase and 28 companies remained unchanged.
Read: Coronavirus: Volatile share market braces for impact
Among other DSE indices, the shariah-based DSES fell by 6.28 points or 0.42 per cent and the blue chip DSE-30to 19.76 points or 0.75 per cent. Over Tk 1293 crore was traded on DSE on the day. The trade volume was Tk 1,275 crore in the previous day.
Prime Textiles topped the gainers' list that rose 22 per cent followed by Evince Textiles, Far Chemical, Ring Shine Textiles, and Delta Spinners.
Stocks of Beximco Ltd traded mostly that worth Tk 124 crore followed by IFIC Bank, Alif Industries, Maksons Spinning, and Orion Pharmaceuticals.
Safko Spinning shed mostly with a 6.45 per cent drop followed by Mithun Knitting, Maksons Spinning, Bangladesh National Insurance, and Orion Pharmaceuticals.
The Chattogram bourse also fell today. The CASPI, the main index of the Chittagong Stock Exchange (CSE), dropped 134 points, or 0.65 per cent, to 20,404.
Among 289 stocks traded, 116 rose, 150 fell and 23 remained unchanged.
Capital market to follow banking sector's ‘lead’ in operating during lockdown
The capital market will continue its operation in the interest of investors in any situation during the Covid-19 pandemic if the banking activities continue.
The Bangladesh Securities and Exchange Commission (BSEC) said this against the backdrop of the government’s preparation for imposing full lockdown from April 14 next.
A notice posted on the official website of the BSEC said: "[The] capital market will continue operation at [in] the interest of investors in any situation during the pandemic of Covid-19 if the banking activities continue."
Also read: Stock market reforms to fail if rumours rule the roost: Minister
It said all the transactions in the capital market will continue in the interest of investors and urged the investors not to pay heed to any rumor.
According to sources at the BSEC, if the banks remain open during the lockdown, the capital market will also remain open. This instruction has been given to two stock exchanges -- Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE).
Also read: BSEC to help boost startup, venture capital ecosystem: Chairman
They said the commission has instructed the DSE to keep the capital market open if banks are open. The capital market will operate utilising smaller shifts and work-from-home facilities.
Earlier, from March 26 to May 31 last year, transactions in the capital market were closed due to the outbreak of Coronavirus pandemic.
Also read: Insider trading: BSEC probes Dominage Steel for 'unusual' stock movement