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Global Equities Roundup: Market Talk

26 Jul 2018 6:43 am

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

0643 GMT - Oil markets will probably have to brace for bigger supply losses than during prior US sanctions regimes against Iran, says RBC commodity strategy chief Helima Croft. That's "because the Trump administration is prepared to be much-more aggressive in using the sanctions." She sees the White House's aim being "to basically take Iran out of the market. That was not the goal of the Obama administration." She estimates that 600,000-700,000 barrels/day of oil won't reach the market by 4Q and likely top 1 million in 1Q. The sanctions will be phased in through November. (biman.mukherji@wsj.com)

0641 GMT - Nestle's first-half growth is above expectations, with an acceleration in the key U.S. and Chinese markets, say analysts at Vontobel. "We like the fact that Nestle has accelerated the product innovation to drive growth, as seen with growth acceleration in Infant Nutrition and PetCare," says Vontobel. The bank expects Nestle to dispose of underperforming assets in the near term, which should boost growth and returns. (anthony.shevlin@dowjones.com)

0639 GMT - India's recent moves aimed at providing relief to farmers and consumers have put the government's financial health at risk, says research firm BMI. It predicts the FY's fiscal deficit will come in at 3.5% of GDP, versus the government's 3.3% target, in the wake of India announcing a sharp increase in state-set prices of farm produce and slash to goods-and-services taxes ahead of next year's national election. BMI says weakening finances could force the government to borrow more, raising bond yields and interest payments. (anant.kala@wsj.com)

0636 GMT - Bharti Airtel's poor performance likely continued last quarter amid the declines in Indian wireless prices. The country's biggest player is seen having swung to a loss amid new player Jio's aggressive approach and ultra-cheap plans. Kotak Securities believes prices are stabilizing in India while Bharti's Africa operation should be a bright spot in the report, helped by the rupee's decline. The stock has lost 1/3 of its value this year. (debiprasad.nayak@wsj.com)

0633 GMT - South Korea's stock benchmark has been among Asia's best performers today, helping by gains in the country's biggest stock. The Kospi rose 0.7% to 2289.06 as Samsung bounced 1.6% following the overnight strength in US tech stocks. Smaller chipmaker Hynix jumped 3.2%. Meanwhile, Korean Air climbed 1.4% and many construction-related names rose some 2%. But Korea Electric Power fell 0.6% and Samsung BioLogics lost a further 3.6%. (kevin.kingsbury@wsj.com; @kevinkingsbury)

0627 GMT - The offer by the board of Malaysia's sovereign-wealth fund to resign is a "smart move," Finance Minister Lim Guan Eng told reporters at Parliament, adding the resignations will give Mahathir a chance to decide on Khazanah's future direction. The departures are subject to approval from the finance ministry, but the decision mainly lies with the PM. Most analysts are welcoming the resignation offers, though the country's stock market hasn't reacted with the KLCI barely higher amid muted moves in many Asian benchmarks today. (yantoultra.ngui@wsj.com; @yantoultra)

0624 GMT - Australia's stock benchmark quickly reversed initial weakness to spend the afternoon right round Wednesday's closing level. As stock-specific news dominated the session, the S&P/ASX 200 finished down 0.05% at 6244.5. Macquarie pulled back 2.6% as its long-serving CEO is stepping down; the firm also reiterated FY profit guidance. Meanwhile, Nine Entertainment slumped 10% and Fairfax jumped 8.4% after the firmer agreed to buy the publisher in a A$2.16 billion ($1.61 billion) deal. Fortescue lost 3.7% and Newcrest gained 4.6% after their quarterly production reports. Supporting the market today was energy, with that sector up 0.8% on fresh oil-price gains. (robb.stewart@wsj.com; @RobbMStewart)

0613 GMT - With "good enough" specs well-accepted not only in China but in markets like India, JPMorgan expects the zero-sum game in the smartphone sector continuing and for the hike in Huawei's shipment guidance being the result of lost business by fellow Chinese brands Oppo and Vivo. As such, the investment bank expects Huawei component suppliers like Sunny Optical, Largan and Lens Technology to benefit. (john.wu@wsj.com)

0609 GMT - The risk of sporadic unrest across Uganda is higher due to government dissatisfaction amid economic upheavals and delayed oil production ahead of a court ruling today on a constitutional amendment allowing President Yoweri Museveni to retain power beyond 2021, says BMI Research. While saying he would likely win another term, the firm adds Africa's biggest coffee exporter and an upcoming oil producer risks a power vacuum in the long run should illness or death see the 73-year old leave office prematurely without grooming a successor. (nicholas.bariyo@wsj.com; @Nicholasbariyo)

0602 GMT - Facebook's 20% after-hours plunge following its 2Q report has sent ripples across the Pacific. Tencent has fallen 2% today in Hong Kong amid worries that Facebook's slowing growth could be a harbinger for other tech giants, particularly those that depend on consumers to stay glued to their digital devices. That includes the Chinese internet giant behind the popular messaging app WeChat and the world's largest videogame publisher by revenue. Tencent's stock has paused after doubling in 2017. It's down 8.3% for the year and 22% from late January's low, having entered bear-market territory 4 weeks ago. Hong Kong's benchmark Hang Seng Index has fallen half that. (steven.russolillo@wsj.com; @srussolillo)

0535 GMT - Taiwan stocks were modestly higher most of today's trading and finished that way, essentially reversing yesterday's modest pullback as many Asian markets advanced today. The Taiex ended up 0.4% at 11010.61, nearly half that increase courtesy of a 20-point end-of-session adjustment higher. It was the highest finish in 6 weeks. Apple product assembler Hon Hai rose 1%, more than offsetting lensmaker Largan's 0.5% drop. Financials were mixed, as were smaller tech names after some recent big gains in chips. (kevin.kingsbury@wsj.com; @kevinkingsbury)

0526 GMT - When a CEO departs, all too often drama ensues. Shaw & Partners says one of the final acts for Macquarie's outgoing Nicholas Moore will be to appear alongside other banking chiefs before the ongoing judicial inquiry into financial-industry misconduct. While the company's fortunes are much-more dependent on the state of financial markets than an appearance at the Royal Commission, Shaw says Macquarie's stock price had assumed financial prosperity and stability that may not continue. After a strong F1Q performance, Shaw edges up EPS forecasts on the company while the stock target rises 4% to A$122. But with shares up 21% this year despite a 3.2% fall today to A$120.98, the broker downgrades Macquarie to hold. (robb.stewart@wsj.com; @RobbMStewart)

(END) Dow Jones Newswires

July 26, 2018 02:43 ET (06:43 GMT)

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