WALL STREET PAUSES ALL-TIME HIGH RALLY
Wall Street opened lower Friday, taking a break from the steady rally of the past three weeks, amid a generally cautious move in global markets. Twenty minutes into trading, the Dow Jones Industrial Average gave up 0.2 percent to 20,762.46, after closing Thursday at an all-time high for the 10th consecutive session, breaking a 30-year record.
The broader S&P 500 lost 0.35 percent to 2,355.44, while the tech-rich Nasdaq was down 0.38 to 5,813.40. Among the few negative factors on Friday, observers cited a decline in oil prices, persistent political uncertainties in Europe, and Trump’s repeat of his threat about declaring China a currency manipulator, just hours after Mnuchin said the administration was in no hurry to do so.
Hewlett Packard lost 8.5 percent after reporting a 10 percent drop in revenues in the first quarter, to $11.4 billion, well below expectations. The company also downgraded its second a quarter guidance and lowered the profit outlook for the year.
PAKISTAN STOCKS INCH DOWN
Stocks inched down in a volatile trade on Friday as the gloom in equity markets globally prompted investors to dump shares.
It is said pressure remained in blue-chip oil stocks amid thin trade. Concerns for foreign outflows, surging circular debt in the energy sector and dismal payouts in the earnings season played a catalytic role in bearish close.
The Pakistan Stock Exchange KSE-100 shares Index shed 0.11 percent or 54.26 points to close at 49,008 points. KSE-30 shares index shed 0.19 percent or 50.37 points to end at 26,592.23 points.
As many as 414 scrips were active of which 136 advanced, 261 declined and 17 remained unchanged. The ready market volumes stood at 275.386 million as compared to 266.165 million shares a day earlier.
Barring Mari Petroleum (MARI), which surged 3.82 percent, the E&P (energy and petroleum) sector dragged the index down by 57points as companies tracked declining international oil prices. WTI closed 0.62 percent down and Brent closed 0.74 percent down. Habib Metropolitan Bank (HMB) up 3.69 percent remained in limelight as Securities and Exchange Commission of Pakistan (SECP) approved its modaraba with paid up capital of Rs300 million.
Nishat Chunian Power Limited (NCPL) closed at its lock circuit as the company skipped the interim dividend in the half-year ended December 31, 2017.
Moreover, Pakistan National Shipping Company (PNSC) also closed at its lower limit due to disappointing financial result. Companies reflecting highest gains include Nestle Pakistan up by Rs450 to end at Rs9450/share and Rafhan Maize up Rs110.50 to end at Rs7710/share. Companies reflecting highest losses including Wyeth Pakistan down Rs151.20 to Rs3965.13/share and Sanofi Aventis down Rs85.89 to end at Rs2404.11/share. Highest volumes were witnessed in Aisha Steel with a turnover of 24.388 million shares.
EUROPEAN STOCKS TUMBLE
European stocks benchmark fell more than 1 percent on Friday while German and French indexes slid by their most in nearly 5 months as jitters in the bond markets over political risk looked to have spilled over into equities.
Futures on the European bluechips index fell 1.4 percent with traders pointing to a bout of selling in the afternoon session as a reason that exacerbated earlier weakness in stock markets.
Banks and commodity-related sectors led losses across Europe following a slump in metals prices overnight, subdued forecasts from the likes of BASF and weak results from Standard Chartered and Royal Bank of Scotland.
The STOXX 600 was down 1.2 percent in afternoon trading and was poised for its third straight session of losses.
European banks, the sector most sensitive to bond spreads, fell more than 2 percent while the basic resources slid more than 3 percent.
Both sectors have been among the biggest beneficiaries of the “reflation rally” that has lifted world stocks to record highs and which has favored shares of companies more geared to growth and inflation.
TOKYO SHARES PLUNGE
Tokyo stocks lost ground Friday as a strong yen dragged Toyota and other major exporters into negative territory while Japan’s big banks also ended the day lower.
The benchmark Nikkei 225 closed down for the third day, despite another record close for the Dow in New York. Sentiment in Tokyo took a hit as US Treasury Secretary Steven Mnuchin lowered US growth expectations, throwing the spotlight on President Donald Trump’s speech before a joint session of Congress on Tuesday.
A string of Japanese data, including factory output and inflation, will also be in focus next week. On Friday, Tokyo shares were held back as the dollar remained weak at 112.77 yen, down from 113.25 yen in Tokyo on Thursday and the 114 yen level seen last week.
The Nikkei fell 0.45 percent, or 87.92 points, to close at 19,283.54. It ticked up 0.25 percent over the week.
The broader Topix index of all first-section issues was down 0.39 percent, or 6.11 points, to end the day at 1,550.14, but it rose 0.36 percent this week. Toyota fell 0.76 percent Friday to 6,448 yen while Panasonic declined 0.23 percent to end at 1,258.5 yen.
CHINA SHARES LARGELY UNCHANGED
China stocks were largely unchanged on Friday, reversing earlier losses, as reform hopes underpinned the market, with the main indexes up for the third straight week thanks to improving risk appetite.
The blue-chip CSI300 index was unchanged at 3,473.85 points, while the Shanghai Composite Index added 0.1 percent to 3,253.43 points.
For the week, CSI300 gained 1.5 percent, while SSEC climbed 1.6 percent.
The main indexes dropped for most of the day as resources shares dragged, but reversed losses in the afternoon after centrally-owned state companies jumped on reform hopes, with China United Network Communications advancing 8.1 percent to a 6-week high.
The director of China’s state assets regulator Xiao Yaqing said on Friday that the country should further deepen mixed-ownership and supply-side reforms, the official Shanghai Securities News reported.
“Market sentiment remains optimistic and the upward trend is not yet broken,” said Wu Kan, head of equity trading at Shanshan Finance.
Reflecting rising risk appetite, China’s outstanding margin loans have risen for four consecutive days to exceed 900 billion yuan ($131.00 billion), as investors appear more willing to use borrowed money to buy stocks.
AUSTRALIAN SHARES DOWN
A selloff in materials stocks knocked Australia’s shares on Friday, with losses led by mining giants BHP Billiton and Rio Tinto. The S&P/ASX 200 index dipped 0.49 percent, or 28.36 points to 5,756.3. The benchmark fell 0.4 percent on Thursday.
“Materials are a major drag on the index today, there was quite a bit of softness in base metals last night along with a bit of selling in the major materials guys BHP and Rio,” said Tony Farnham, economist at Paterson Securities.
A 2 percent slide in the price of iron ore, Australia’s top export earner, on worries about surplus stocks at Chinese ports along with tumbling copper prices put miners to the sword.
The world’s largest miner by market capitalization BHP Billiton extended losses for a third day, dropping as much as 2.8 percent to its lowest in over a month.
Copper prices faltered on demand woes as China’s housing minister suggested moves were afoot to stabilize the property market.
Mining giants Rio Tinto and Fortescue Metals group were also sold off, sinking 3.6 percent and 2.9 percent respectively.
Material stocks accounted for most of the losses in the bourse with the ASX 300 Metals and Mining index shedding as much as 1.9 percent to its lowest in a month.
Financial stocks were another casualty, weighed down by three of the “Big 4” banks that fell 0.1 to 0.2 percent. The only exception, Westpac Banking Corp, inched up 0.3 percent.