WALL STREET QUARTER ENDS WITH A LOSS
Wall Street fell on Friday, pulled down by Exxon and JPMorgan Chase as investors wrapped up a strong quarter and weighed whether corporate earnings reports will justify the market’s lofty valuations.
Major indexes have hit multiple record highs since the election of President Donald Trump on bets that he would improve economic growth by cutting taxes and boosting infrastructure spending. The rally has also benefited from robust economic data and a pickup in corporate earnings growth.
For the quarter ending Friday, the S&P 500 gained 5.5 percent, its strongest quarterly performance since the last quarter of 2015.
Investors are now looking to the upcoming quarterly earnings season to justify pricy valuations.
First-quarter earnings for S&P 500 companies are expected to rise 10.1 percent, according to Thomson Reuters I/B/E/S. The index is trading at about 18 times earnings estimates for the next 12 months, compared to its long-term average of 15.
“Valuations are as stretched as they ever get,” said Bruce Bittles, chief investment strategist at Robert W. Baird & Co in Nashville. “Certainly that’s cause for concern if earnings don’t grow the way they are anticipated to grow.”
Over 40 strategists polled this week on average expected the S&P 500 to rise another 2 percent by the end of the year.
The Dow Jones Industrial Average fell 0.31 percent to end at 20,663.22 points, while the S&P 500 lost 0.23 percent to 2,362.72. The Nasdaq Composite slipped 0.04 percent to 5,911.74.
So far in 2017, technology .SPLRCT has been the top-performing S&P sector, up 12.2 percent.
Eight of the 11 major S&P sectors fell on Friday. JPMorgan Chase fell 1.34 percent and Wells Fargo & Co lost 1.03 percent.
EUROPEAN SHARES SEAL STRONGEST QUARTER IN TWO YEARS
European shares sealed their best quarter since 2015 on Friday, with inflows to European equities picking up on strong economic data and corporate earnings, despite a packed political calendar ahead.
The pan-European STOXX 600 index was up 0.1 percent, ending the first quarter of 2017 with a gain of 5.5 percent, its third straight quarterly gain. While Britain’s FTSE 100 fell 0.6 percent, Germany’s DAX gained 0.5 percent and France’s CAC rose 0.7 percent.
The rally in European shares has been driven by improving economic data, strong earnings and a series of M&A deals in the region, which have more than offset worries over the political future of the region ahead of elections in France and Germany and Britain’s divorce from the European Union.
European equities attracted their largest inflows in 60 weeks, with $1.5 billion this week, the latest data from Bank of America Merrill Lynch showed, as investor concerns over a victory of far-right candidate Marine Le Pen in the upcoming French presidential election subsided.
Spain’s IBEX was the overall winner, notching up 11.2 percent gains, while Britain’s FTSE 100 underperformed peers, gaining 2.5 percent over the quarter.
PAKISTAN STOCKS SPRING BACK
After almost a week of suffering due to investor caution amid rising political noise, the benchmark KSE-100 Index finally ended with a rise of 206.6 points or 0.43 percent – its first positive finish in seven sessions.
The day began with the market carrying forward its negative momentum with the index dipping close to the 47,680-point level before bulls returned to take it beyond 48,000. The KSE-100 eventually finished at 48,155.93.
The sudden northward hike can mainly be attributed to reports suggesting that the verdict of the Panama case is expected by mid-April.
Investors who remained mainly on the sidelines took centre stage and fueled the bullish sentiment. Overall, trading volumes rose to 273 million shares compared with Thursday’s tally of 241 million. Shares of 381 companies were traded. At the end of the day, 224 stocks closed higher, 143 declined while 14 remained unchanged.
SRI LANKA SHARES HIGHER
Sri Lanka stocks were higher after the close on Friday, as gains in the Information Technology, Banking, Financials & Insurance and Land & Property sectors led shares higher.
At the close in Colombo, the CSE All-Share added 0.36 percent. The best performers of the session on the CSE All-Share were PC House PLC, which rose 100.00 percent or 0.100 points to trade at 0.200 at the close. Meanwhile, People’s Merchant Finance PLC added 23.89 percent or 2.70 points to end at 14.00 and SMB Leasing PLC was up 20.00 percent or 0.1000 points to 0.6000 in late trade.
The worst performers of the session were Printcare PLC, which fell 21.68 percent or 7.50 points to trade at 27.10 at the close. Serendib Land PLC declined 18.73 percent or 311.20 points to end at 1350.00 and Harischandra Mills PLC was down 17.85 percent or 499.90 points to 2300.00. Rising stocks outnumbered declining ones on the Colombo Stock Exchange by 129 to 75 and 47 ended unchanged.
TSX SLIPS AS FINANCIALS WEIGH
Canada’s main stock index fell modestly in morning trading on Friday, weighed by financial and railway companies, though better-than-expected results from BlackBerry offset some of the losses.
The most influential movers on the index included Royal Bank of Canada, which fell 0.5 percent to C$97.43, and Bank of Nova Scotia, which declined 0.7 percent to C$78.12. Bank of Montreal slipped 0.4 percent to C$99.47. CIBC, which fell nearly 3 percent on Thursday after it raised its offer for PrivateBancorp Inc, recouped some of the previous session’s losses, rising 0.6 percent to C$114.41.
At 1427 GMT, the Toronto Stock Exchange’s S&P/TSX composite index was down 19.42 points, or 0.12 percent, to 15,559.34. Of the index’s 10 main groups, six fell.
HONG KONG STOCKS LOWER
Hong Kong stocks ended the week with a loss as investors brushed off an upward revision of US growth and a Wall Street rally.
The Hang Seng Index slipped 0.78 percent, or 189.50 points, to end at 24,111.59.
The benchmark Shanghai Composite Index gained 0.38 percent, or 12.27 points, to 3,222.51, while the Shenzhen Composite Index, which tracks stocks on China’s second exchange, added 0.35 percent, or 6.89 points, to 1,986.47.
INDIAN SENSEX RISES
Indian benchmark Sensex slipped 27 points on Friday to end at 29,620.50 on the last trading day of 2016-17, but scored a gain of over 16 percent for the full fiscal during which investors’ wealth grew by over Rs 26 trillion.
The broader 50-share index Nifty, which on Friday ended flat at 9,173.75 points, scored even better for the full year with a surge of 18.55 percent. Measured in terms of total market capitalisation of all listed stocks on the BSE, the overall investor wealth grew to a record high of Rs 121 trillion—up from Rs 94.75 trillion at the end of fiscal 2015-16.
The Sensex has gained 4,278.64 points, or 16.88 percent, for the entire fiscal 2016-17. The gauge had touched the year’s high of 29,824.62 (intra-day) on March 17 this year. The broader Nifty ended the fiscal with gains of 1,435.55 points, or 18.55 percent, after scaling the year’s high of 9,218.40 (intra-session) on March 17.
The index had lost about 9 percent in the previous fiscal, but had ended 2014-15 with gains of 26.65 percent. For the day, the BSE Sensex snapped its three-session winning streak to end lower by 26.92 points, or 0.09 percent at 29,620.50. It hovered between 29,687.64 and 29,552.61 during the day.