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Global Equities Roundup: Market Talk

12 Jun 2017 2:04 am

0204 GMT - London spot gold edges higher Monday, after having eased from recent highs at the end of last week amid a strengthening dollar. Gold will likely drift lower this week as the Fed is expected to raise rates, says OM Financial's Mark Johnson. He says gold may test a support level of $1,265/oz in the near term and could drift further towards the $1,250/oz mark. Spot gold is up 0.1% at $1,267.37/oz. (biman.mukherji@wsj.com)

0159 GMT - New international standards for ships' ballast water will require several vessels to be retrofitted and OCBC expects Sembcorp Marine (S51.SG) to carve a slice of that market for itself. The Ballast Water Convention will be implemented on Sept. 8, though uncertainty remains over the type of equipment different vessels will need, OCBC says. Weak oil prices in the last three years have forced explorers to scale back investment and dried up orders for offshore vessel makers such as SembMarine. A big uptick in orders will still come from the company's fabrication business, OCBC says, reiterating its buy recommendation and S$2.01 fair value estimate on the stock. (gaurav.raghuvanshi@wsj.com)

0154 GMT - Shares in China opened lower early Monday, reflecting persistent selling pressure after the securities regulator appeared to have picked up pace of new shares issuances on Friday. The benchmark Shanghai index slips 0.1%, narrowing the 0.4% intraday losses, though nearly 1,000 stocks are in decline. The Shenzhen main board falls 0.5% and the ChiNext Price Index skids 0.7%. China's securities regulator approved 8 IPOs, up from 4 IPOs the previous week. In an effort to defend the normalization of IPOs, the 4 big securities newspapers published articles in recent days arguing that the adjustment of the IPO pace is an effort to seek a balance but the weekly number of IPO approvals shouldn't be taken a decisive factor for investors. (yifan.xie@wsj.com)

0144 GMT - The US decline in tech stocks has made for a handy reason to do some selling of some companies in Asia. Apple component maker AAC Tech and Chinese internet giant Tencent--both of which had gained some 40% this year--are off 2% this morning. The Hang Seng Index, which last week hit fresh 23-month highs, is 0.4% at 25921. (kenan.machado@wsj.com)

0143 GMT - Singapore's property market will be at its cyclical bottom next year and with stable economic growth, demand will likely pick up, DBS Vickers says. Economic growth between 2.5% and 2.8% "bodes well for cyclical sectors like hotels and office space where demand correlates more closely to a more buoyant economic environment," DBS says. The bank also expects better prospects for industrial REITs. Singapore's REITs have returned 10% year-to-date, nearly in line with the benchmark Straits Times Index. DBS likes CDL Hospitality Trusts, predicting a turnaround in earnings. (gaurav.raghuvanshi@wsj.com)

0141 GMT - Shares of China Evergrande (3333.HK) fall on an estimated CNY7.07 billion ($1.04 billion) loss from exiting its investment in rival China Vanke (2202.HK). Shares are down 0.6% in early trade, retreating further from last week's record high. The sale of its entire 14% stake in Vanke to Shenzhen Metro, a move that solidifies Shenzhen Metro's control in the nation's major property developer with a nearly 30% stake, offers little surprise given that China Evergrande had entrusted its shareholding rights in Vanke to Shenzhen Metro in March. Vanke's stock is up 0.7% as the latest move effectively ends a possible hostile takeover by upstart insurance-property conglomerate Baoneng. (joanne.chiu@wsj.com; @joannechiuhk)

0133 GMT - There may be a risk rally in the wake of the US FOMC's meeting that could indicate "a more shallow rate hike trajectory," says Vishnu Varathan, senior economist at Mizuho Bank in Singapore. He suggests shorting the dollar against the Thai baht and the Korean won as he expects the latter Asian currencies to rally post the meeting. (kenan.machado@wsj.com)

0119 GMT - Hong Kong shares are set to open lower as Hang Seng futures are down 0.3%. Tech stocks are expected to be under pressure following declines elsewhere in Asia this morning in the wake of Friday's retreat among US tech giants. Today could provide an easy excuse to take some profits in the likes of Tencent, which is up 46% this year amid a series of record highs. (kenan.machado@wsj.com)

0117 GMT - Taiwan stocks open lower as the tech-heavy market follows the noted declines seen Friday in US giants in the space. The Taiex is down 0.5% at 10150, with Apple (AAPL) suppliers among those underperforming. Hon Hai and TSMC fall nearly 2%--the latter hit another record high Friday--while Largan drops 0.6%. AAPL shares fell 3.9% to close out the week. (kenan.machado@wsj.com)

0112 GMT - Singapore stocks open higher, adding to recent gains, as that market isn't exposed to tech stocks to the degree Japan and Korea are. Those markets are selling off in the wake of Friday's skid in US tech stocks. Singapore's Straits Times Index is up 0.3% at 3264 with OUE Hospitality Trust up 0.7% and Yangzijiang Shipbuilding adding 1.6%. Banks are also higher, but builder City Developments is down 0.9% and Singapore Airlines eases 0.2%. (gaurav.raghuvanshi@wsj.com)

0108 GMT - The Fed may come across as dovish at this week's meeting given the lack of wage and inflation pressure, says Vishnu Varathan of Mizuho Bank. With a rate increase for June largely priced in by markets--giving it a probability of 96%--the dollar is unlikely to get much of a fillip, analysts say. Still, dollar bears are also likely to exercise caution this week as political tensions over former FBI director James Comey's testimony weaken. Varathan favors a long position on the USD/SGD and expects a USD/JPY rebound prior to the FOMC meeting. The WSJ Dollar Index is down 0.1%. (kenan.machado@wsj.com)

0100 GMT - Amid today's tech-driven selloff in Japan stocks following Friday's such skid in the US, weak machinery-orders data out this morning isn't helping either. The Topix electric-appliance subindex is lower down 1.5% while information/communication is off 1.4% and precision instruments eases 1%. Among individual shares, Apple supplier Murata is down 2.8% while semiconductor maker Tokyo Electron slides 3.8%. The Nikkei is down 0.8% at 19853. (suryatapa.bhattacharya@wsj.com; @SuryatapaB)

(END) Dow Jones Newswires

June 11, 2017 22:04 ET (02:04 GMT)

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