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US stocks rise; S&P, Nasdaq post best weeks in 7 years

Wall Street rose on Friday as investors hoped for progress on trade in a critical US-China meeting over the weekend, and the S&P 500 and the Nasdaq posted their biggest weekly percentage gains in nearly seven years.

The Dow saw its largest weekly advance in two years. Investors were encouraged this week by comments by Federal Reserve Chair Jerome Powell and subsequent minutes from the central bank’s latest meeting that suggested that the Fed will take a data-driven rather than ideological approach to future rate-hikes. All three major US indexes recorded modest monthly percentage gains for November.

A Chinese official said “consensus is steadily increasing” in trade negotiations between the US and China as the G20 meeting got underway in Buenos Aires, sparking hopes there would be a positive resolution in the ongoing tariff dispute between the world’s two largest economies.

The Dow Jones Industrial Average rose 199.62 points, or 0.79 percent, to 25,538.46, the S&P 500 gained 22.4 points, or 0.82 percent, to 2,760.16 and the Nasdaq Composite added 57.45 points, or 0.79 percent, to 7,330.54. Of the 11 major sectors in the S&P 500, all but energy .SPNY ended the session in positive territory.

Energy stocks fell 0.2 percent as crude prices LCOc1 extended their slide. But falling oil prices boosted airlines stocks. The Dow Jones Airlines index DJUSAR rose 2.8 percent.

Advancing issues outnumbered declining ones on the NYSE by a 1.17-to-1 ratio; on Nasdaq, a 1.24-to-1 ratio favored advancers. The S&P 500 posted 28 new 52-week highs and 6 new lows; the Nasdaq Composite recorded 49 new highs and 90 new lows. Volume on US exchanges was 8.39 billion shares, compared to the 7.63 billion average for the full session over the last 20 trading days.

Britain stocks lower

UK shares closed lower on Friday notching up a second straight monthly loss, as weak China data drained confidence ahead of a high-stakes G20 meeting between China and the United States, with builders, financial and mining stocks leading the losses.

The FTSE 100 was down 0.8 percent, underperforming its euro-zone peers due in part to its heavy weighting in mining stocks. The midcap FTSE 250 was down 0.7 percent. Stocks ended the day on their lowest levels of the session and the index lost 2 percent on the month amid lingering woes about Brexit, the trade spat and the slowing global economy.

Mining stocks were down 1.8 percent after China reported its weakest factory growth in more than two years and as investors fretted about the outcome of a meeting between US President Donald Trump and China’s Xi Jinping that may decide the fate of the prolonged trade dispute on Saturday.

China stocks move higher

China stocks rose on Friday in thin trading volume, amid caution ahead of a most-awaited meeting between U.S. President Donald Trump and his Chinese counterpart Xi Jinping on the sidelines of the G20 summit in Argentina.

The Shanghai Composite index was up 0.8 percent at 2,588.19, gaining 0.3 percent for the week. The blue-chip CSI300 index was up 1.1 percent, climbing 0.9 percent for the week.

CSI300’s financial sector sub-index was higher by close to 1 percent, the real estate index rose 0.9 percent and the healthcare sub-index was up 1.3 percent. The smaller Shenzhen index ended up 0.9 percent and the start-up board ChiNext Composite index was higher by 1.3 percent.

Trump sent mixed signals on Thursday about the possibility of a deal, whereas China Daily, Beijing’s mouthpiece, said a deal is possible but added that Washington must be “fair minded” in the negotiations. The meeting is coming after China’s manufacturing sector reported its weakest growth in two years on Friday morning.

About 13.93 billion shares were traded on the Shanghai exchange. The volume in the previous trading session was 15.72 billion.

The agricultural sector also made gains on Friday for reasons unrelated to the Trump-Xi meeting. China is considering buying port for its state reserves to support struggling farmers whose livestock is affected by the African swine fever epidemic. CSI 300’s sub-index for the sector was up 1.4 percent.

The largest percentage gainers on the main Shanghai Composite index were Jiangsu Sunrain Solar Energy Co Ltd, up 10.1 percent, followed by BanBao Co Ltd and SEC Electric Machinery Co, both up by 10 percent.

 

Japan stocks higher

Japan stocks were higher after the close on Friday, as gains in the Chemical, Petroleum & Plastic, Mining and Pharmaceutical Industry sectors led shares higher.

At the close in Tokyo, the Nikkei 225 gained 0.40 percent. The best performers of the session on the Nikkei 225 were Sumitomo Dainippon Pharma Co Ltd, which rose 7.56 percent or 260.0 points to trade at 3700.0 at the close. Meanwhile, Showa Shell Sekiyu K. K. added 5.71 percent or 95.0 points to end at 1759.0 and Otsuka Holdings Ltd was up 4.53 percent or 240.0 points to 5535.0 in late trade.

The worst performers of the session were Toshiba Corp., which fell 5.50 percent or 205.0 points to trade at 3520.0 at the close. Kyocera Corp. declined 2.70 percent or 170.0 points to end at 6125.0 and The Japan Steel Works, Ltd. was down 2.54 percent or 54.0 points to 2074.0. Rising stocks outnumbered declining ones on the Tokyo Stock Exchange by 2053 to 1444 and 210 ended unchanged. Shares in Sumitomo Dainippon Pharma Co Ltd rose to 5-year highs; rising 7.56 percent or 260.0 to 3700.0. The Nikkei Volatility, which measures the implied volatility of Nikkei 225 options, was down 1.85 percent to 20.11.

Indian shares surge

Indian shares inched up on Friday, with both the indexes marking their highest level in nearly two months, while the Indian rupee strengthened to a fresh 3-month high ahead of key economic growth data later in the day.

Broader Asian markets wavered as investors remained cautious ahead of a crucial meeting between the Chinese and US presidents at the G20 meet during the weekend that could determine the course of a heated trade war over the next year.

MSCI’s broadest index of Asia-Pacific shares outside Japan wobbled between positive and negative territory in early trade and was last up 0.4 percent. Back home, investors were awaiting gross domestic product data which probably moderated to 7.4 percent in the July-September quarter, according to a Reuters poll, weakening just as Prime Minister Narendra Modi’s government gets set for an election due by May.

The Indian rupee gained up to 0.35 percent on the day to 69.595 per dollar, its best since Aug 21. The broader NSE index was up 0.25 percent at 10,885.45, while the benchmark BSE index rose 0.27 percent to 36,268.19. The broader NSE index breached its 10,900 level for the first time since Oct. 3, while the BSE index also clocked its best level in almost two months.

Shares of Indian non-banking financial companies gained after the central bank relaxed rules to sell or securitise their loan books, in a bid to ease persistent stress in the sector.

Global investors pulling out of the Saudi stock market

One of the most troubling economic issues facing the Saudi government is its inability to attract international investment – something that is vital if the country is to succeed with a much-needed economic reform program. A shock collapse in foreign direct investment (FDI) last year was clear evidence of its difficulties in enticing international capital, but now there are fresh signs of trouble on the stock market too.

The proportion of shares held by foreign investors on the Saudi Stock Exchange (Tadawul) has been steadily falling in recent weeks. International shareholders controlled 5.07percent of all listed shares on 27 September, but the figure had fallen to 4.71percent by early November. While the fall is a small fraction of the market as a whole, it is still significant, representing as it does a 7percent drop in the holdings of foreign investors in the space of just a few weeks. In monetary terms, investors sold SR7.1bn ($1.9bn) more shares than they bought in the five-week period from 7 October to 8 November. To put that in perspective, these share sales are larger than the entire net inflow of FDI into Saudi Arabia in the whole of 2017. In the week ending 11 October there were $165m of net sales by foreign investors, but that rose to $1.1bn in the week to 18 October and remained at a high level of $624m the following week.

South Korean index down

South Korea’s KOSPI stock index closed lower on Friday, weighed down by chipmakers, as global investors awaited the high-stakes trade talks between President Xi Jinping and Donald Trump this weekend. The Korean won edged down, while bond yields rose.

South Korea’s central bank raised its policy interest rate on Friday for the first time in a year in a widely expected move aimed mainly at containing a boom in parts of the country’s property market. Analysts said heightened global markets turmoil over the past few months has made it difficult for the Bank of Korea (BOK) to find the perfect timing to adjust policy.

The KOSPI closed down 17.24 points or 0.82 percent at 2,096.86. The benchmark index rose 1.9 percent on a weekly basis, while it rose 3.3 percent on a monthly basis, posting the biggest monthly gain since January.

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