Most of the region rallied with many markets seeing gains exceeding 1%. The boost was provided by indications of a strong start to U.S. holiday sales and chatter of slower Fed rate hikes. Taiwan had the added benefit of elections which saw a more pro-China party make headway. The mainland Chinese exchanges dipped as investors keep a wary eye on the upcoming G-20 meeting. Australia underperformed.
Miners saw heavy selling following sharp declines in the West on Friday. Also, iron ore fell sharply in Asian trading with Chinese steal manufacturers cutting production and margins said to be facing severe margin erosion. Energy was also lower. However most sectors ended the day higher. Telcos, real estate and utilities saw gains of 1% or more.
Japan’s November Nikkei Flash manufacturing PMI remained in expansion territory but dipped from October’s reading.
Important Headlines with Plenty after the Close
- Tencent +2.3% backed travel site, Tongcheng-Elong +26.5% flew out of the gate on its trading debut.
- Zhongjin Gold +1.9% will purchase a 90% stake in China Gold Inner Mongolia Mining and will fund the purchase with cash and additional shares.
- Daikin Ind +3.2% will acquire unlisted AHT Cooling Systems for over ¥100b from an investment fund. The deal will triple its annual sales in the refrigerator arena.
- Yancoal Australia +8.5% is setting the offer price for its Hong Kong Listing between HK$23.48 to HK$25.84.
- Post the end of the day Down Under, Rio Tinto announced it will sell an African uranium mining stake to China National Uranium.
- L’Occitane reported after the close. H1 net sales are €595.4m with NI €6.81m Gross margin is 82.4% and the company has not proposed an interim dividend.
- Also after the close, Denso revealed it has acquired a stake in Infineon +1.6% worth mid-double digit million €s.
- Rounding out news after the local markets ceased trading, Mitsubishi Motors joins Nissan in removing Carlos Ghosn from the chairman position.
Italy’s Dep. PM Salvini indicates his nation way be willing to compromise on the controversial budget. He says “nobody is fixated” upon the current 2.4% budget deficit. This has given the markets a lift and Italy has led all morning. Milan is currently higher close to 3%.
Russia is not taking part in today’s gains. The recent pressure on the energy and mining sectors has not helped. Political tensions are adding to worries. Russia blocked several Ukrainian naval vessels from using a strategic waterway. It fired upon the vessels wounding several sailors and seized two of the ships. The Ukraine is set to declare martial law.
Across the region, the vast majority of sectors are to the upside. Banks and autos are better by more than 2% with most other sectors improved by at least 1%. Italian banks and insurance companies lead their respective groups. Defensives lag with personal goods and food/bevies down small. Tobacco names leading the way lower.
Regarding Brexit, PM May is back in London with EU approval in her pocket. However, she still faces a tough battle among her our own Tory party in addition to the opposition Labour (not a typo) party.
Crude is rebounding this morning following sharp declines to end last week. There were already reports indicating Saudi output is strong. This morning sources allege the kingdom is pumping crude at historic levels, over 11m bpd.
Snippets from the Region
- Arytza +9.9% provides an upbeat Q1 report. Both sales and cost saving are ahead of expectations.
- In the energy exploration space, DNO +3.3% has launched a bid for Faroe Petroleum +25.6%. The bid price of 152p is a 20.8% premium to Friday’s close.
- Flybe % remains the center of bid speculation. Last week, Virgin Atlantic was said to have interest. Today, ICA +1.2 is a name in the frame.
On Our Side of the Pond
- Keep an eye on Plantronics with Logitech +3.7% ending merger talks.
- Bitcoin continues its recent tumble and is currently trading below $4,000.00
- Keep an eye on U.S. – Mexican chatter. Clashes occurred at the boarder forcing the U.S. to close crossings in Tijuana this weekend. To that end, Pres. Trump has implored Mexico to move the caravan of migrants away from the border. He went on to say he will close the border permanently if need be.
Markets and Macro
|JN||Nikkei Japan PMI Mfg||Nov P||—||51.8||52.9||—|
|JN||Leading Index CI||Sep F||—||104.3||103.9||—|
|JN||Coincident Index||Sep F||—||114.4||114.6||—|
|HK||Trade Balance HKD||Oct||-48.4b||-44.5b||-47.7b||—|
|GE||IFO Business Climate||Nov||102.3||102||102.8||102.9|
|GE||IFO Current Assessment||Nov||105.3||105.4||105.9||106.1|
|UK||UK Finance Loans for Housing||Oct||38150||39697||38505||38712|
|US||Chicago Fed Nat Activity Index||Oct||0.18||—||0.17||—|
|CA||Bloomberg Nanos Confidence||23-Nov||—||—||56.6||—|
|US||Dallas Fed Manf. Activity||Nov||24.5||—||29.4||—|