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Global Equities Roundup: Market Talk

28 Aug 2017 2:09 am

The latest Market Talks covering Equities. Published exclusively on Dow Jones Newswires throughout the day.

0209 GMT - Cotton prices are trading slightly higher following Hurricane Harvey hitting the U.S. Even so cotton has "all but lost it's [Hurricane]Harvey premium" as the weather models suggest the storm will either remain in Texas or peter out as it moves north-eastward, says Tobin Gorey, an analyst at Commonwealth Bank of Australia; "Harvey is not headed for much larger, and still maturing, cotton crops in the Mississippi Delta and the U.S. south‑east anymore." He adds that the hurricane did cause some damage but this was largely to already picked cotton that was ready for ginning. ICE cotton no.2 is trading up 1.1% at 69.34 cents a pound. (lucy.craymer@wsj.com;Twitter: @lucy_craymer)

0208 GMT - Any miss by the big 4 Chinese banks reporting earnings Wednesday could lead to a major correction in the Hang Seng Index, cautions UOB KayHian stock strategist Frank Yip. "As the Hang Seng has risen over 800 points (in the past four days), it may undergo a little correction before the result announcements of China's banks on Wednesday." The Hang Seng Index is up 0.6% in morning trade Monday, and up 27.3% year-to-date, the best among developed global markets. Bank of Communications is up 2.5%, with Bank of China adding 1.5% and China Construction Bank gaining 1.2%. The latter hit a record high last week. (kenan.machado@wsj.com)

0202 GMT - Chinese markets extend their rally early Monday, lifted by surge in financial stocks after state-backed funds raised holdings in relevant shares. The Shanghai Composite Index advances 0.6% at 3351.72. Investors bet on growth prospect of brokerage shares after the "National Team" was disclosed to have increased holdings in a number of brokers such as Guotai Junan Securities and Orient Securities in the second quarter. Yet analysts are cautious the rally may be short-lived. "There's no doubt that the market is on a upward path but the index can't climb this fast as mutual funds are likely to dump holdings since they already have big positions in financial stocks," says Jacky Zhang, an analyst at BOC International. The Shenzhen main board adds 0.5% at 1920.08 and the ChiNext Price Index gains 0.7% at 1824.59. (yifan.xie@wsj.com)

0158 GMT - Maybank Investment Bank sees AirAsia (5099.KU) selling its 50% stake in Asian Aviation Centre, which provides training services for pilots, cabin crew, engineers, ramp handlers, guest services and aviation to its partner CAE for US$100 million as a positive. The sale will crystallize a gain of MYR188 million for the budget airline in the income statement, boost cash balance by MYR386 million and strengthen AirAsia's balance sheet with net asset value rising by 2.8%. Maybank maintains a buy on AirAsia with unchanged target price of MYR3.75. AirAsia is due to announce its 2Q earnings Tuesday evening. (yantoultra.ngui@wsj.com; @yantoultra)

0157 GMT - Singapore shares start the week on a weak note as Asian shares lack direction early Monday. The Straits Times Index is down 0.1% at 3256.74 mainly as 2 of the 3 Singapore banks are in red. DBS is down 0.2% while UOB is 0.3% lower. Rig builder Singapore Marine and its parent Sembcorp Industries are lower amid drop in oil prices. Elsewhere, Singapore Airlines is down 0.5%. Weakness in regional markets come as US and European central bankers hold off sending any fresh policy signals late last week at the annual Jackson Hole symposium. STI is now down 2.2% this month. (saurabh.chaturvedi@wsj.com; @journosaurabh)

0150 GMT - Hong Kong stocks aren't taking a breather, lifted by a sudden surge in shares of AAC Technologies. The benchmark Hang Seng moves up 0.6% to 28,055 early Monday, the highest intraday level since May 2015, while the H-Shares index puts on another 0.7%. Apple audio supplier AAC pops 12% to a record high of HK$137.5, amid a fresh round of target guessing game with Citi, and Jefferies slapping revised targets of HK$143.2 and HK$165, respectively. Chinese banks and insurers, the recent index drivers, are largely steady while Sinopec and China Shenhua are higher following their results release. (john.wu@wsj.com)

0146 GMT - U.S. gasoline futures trade around 6% higher after U.S. oil refineries were shut down as Hurricane Harvey made landfall in Texas, says Vivek Dhar, an analyst at Commonwealth Bank of Australia. He says closure of these refineries, which process around 2.26 million barrels of crude oil per day, means markets expect subdued oil demand, preventing a sharp lift in oil prices. "Gasoline prices will likely remain elevated so long as rain continues to pour down and that is likely to be the case for the next few days at least," he notes. September Nymex Gasoline is currently trading at $1.7645/gallon. Outlook for oil prices is less certain, "but as refining capacity comes back online with elevated margins, we expect oil prices to track higher." Nymex crude is currently trading down 0.3% at $47.70/bbl. (lucy.craymer@wsj.com;Twitter: @lucy_craymer)

0120 GMT - Malaysian stocks are down at the start of the week, declining slightly following mixed performance in the US and Europe. JF Apex Research says the FBM KLCI Index could remain under pressure, with support at 1,750 points. The 30-stocks index drops 0.2% to 1,765 in early trade. The losers include palm oil plantations firm Kuala Lumpur Kepong and lender Hong Leong Bank. Shares of the companies decline 1.6% and 0.5%, respectively. Gainers include gas processing firm Petronas Gas, which climbs 0.4%. (yantoultra.ngui@wsj.com; @yantoultra)

0116 GMT - Market positioning for a weaker dollar may increase further this week amidst 2016 lows for the currency, says ANZ's Khoon Goh. The WSJ Dollar Index, a broad measure of the greenback, closed Friday at its lowest level since Aug. 19, 2016. The index is down another 0.1% on Monday. Already, CFTC data for the week ended Tuesday showed dollar selling resumed as leveraged funds increased their overall net short dollar positions by $1.1 billion while going long on the euro by $1.9 billion. ECB President Draghi's speech at Jackson Hole steered clear of commenting on the euro, which was read by the market as a green light to push EUR/USD past the 1.19 level, says Goh. The EUR/USD pair is last around flat at 1.1925. (kenan.machado@wsj.com)

0113 GMT - Malaysia's Success Transformer (7207.KU) could go rise further based on technical indicators, according to RHB Research. The company, which manufactures transformers and automatic voltage stabilizers, closed Friday up 6.7% at MYR3.68, bringing its year-to-date gains to some 82%. Friday's close is also the highest since June 20 this year. The upside move may persist after Success breached above a technical downtrend line, according to the broker. RHB sees the immediate resistance point at the MYR4.00 level, followed by MYR4.32. (yantoultra.ngui@wsj.com; @yantoultra)

0109 GMT - Slower 2Q earnings growth could put some pressure on shares of Sinopec (0386.HK) today. China's No. 1 refinery earned CNY27.9 billion ($4.2 billion) in 1H, up 40% from a year ago, but that's against 1Q growth of 160%. Both revenue and dividend went up by about 30% on year. 2H refinery throughput will be at 118 million barrels, says Sinopec in the results statement, about the same levels from 1H. The stock closed Friday at HK$5.86, up 5% from a 7-month low attained on Monday. (john.wu@wsj.com)

0104 GMT - The buying momentum at Malaysian chipboards maker and rubberwood supplier Mieco (5001.KU) could be strong, RHB Research says, given that the stock has been trading above the downtrend technical lines, which is a positive sign, according to the broker. Shares of Mieco closed Friday up 8.4% at MYR0.97, bringing its year-to-date gains to some 73%. The increasing plainboard selling prices and improving demand for particle boards have helped to give Mieco's shares a lift. RHB says it sees the near-term resistance level at MYR1.07, followed by the MYR1.20 level. (yantoultra.ngui@wsj.com; @yantoultra)

(END) Dow Jones Newswires

August 27, 2017 22:09 ET (02:09 GMT)

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