Hong Kong shares seen weak, poised for monthly index gain
Hong Kong shares could start weaker on Friday ahead of the release of the official China PMI over the weekend and the outcome of a two-day European leaders summit later in the day, but the benchmark index should record a monthly gain.
Data due over the weekend is expected to show that activity at China's factories fell to seven-month lows in June. That would compound market concerns that the economy is stuck in a deeper and longer downturn than anticipated.
On Thursday, the Hang Seng Index <.HSI> closed down 0.8 percent at 19,025.3. It is up 2.1 percent in June.
Seoul shares seen rangebound before EU outcome
Seoul shares will likely be trapped in a narrow range on Friday as investors keep to the sidelines while they await the outcome of the European Union's debt crisis summit.
"Investors are waiting for further developments overnight in Europe and the reaction in Wall Street before making their bets, which will take place after the market closes out the week here, so trading looks to be quiet as the market braces for what might be a busy Monday," said Cho Byung-hyun, an analyst at Tong Yang Securities.
Italy and Spain held up agreement on measures to promote growth at a European Union summit on Thursday to demand urgent action to bring down their borrowing costs, although EU leaders remain deep divided over the crisis response.
South Korea cut this year's economic growth target on Thursday and unveiled plans to boost public spending by more than $7 billion to shore up Asia's fourth-largest economy in the face of the euro zone crisis.
Nikkei set to rise on end-of-month short-covering
Japan's Nikkei share average is likely to rise on Friday as a spurt of month-end short covering winds back quarterly losses, although early trading may be depressed after EU leaders ended the first day of a summit at loggerheads.
The Nikkei has fallen 12 percent so far in the second quarter, which ends today, wiping out much of the first-quarter's 19.3 percent surge, the biggest first-quarter gain in 24 years.
Market players said the Nikkei <.N225> was likely to trade between 8,750 to 8,950, potentially dipping initially before gains accelerate into the afternoon session as investors unravel their short bets.
"Hopes for any significant progress at the EU summit have already evaporated, but if they don't even agree on the details of the Spanish bank bailout and hint that the ECB will drop rates, there will be disappointment," said Masayuki Doshida, senior market analyst at Rakuten Securities.
Euro zone leaders are to conclude the two-day meeting later on Friday to discuss how to tackle an expanding debt zone crisis. On Thursday, Italian and Spanish leaders refused to sign a growth package until Germany agreed to a short-term plan to reduce the cost of their credit.
Gold down over 1 pct on US healthcare ruling, Europe
Gold fell more than 1 percent on Thursday, hit by worries of an economic slowdown after a U.S. Supreme Court ruling upheld a landmark healthcare law and by fading hopes that a European Union summit will resolve that region's debt crisis.
Bullion investors were frustrated as it is unlikely that additional stimulus will come out of the summit beginning Thursday in Brussels, as European finance officials were working on urgent measures to ease market pressure on Spain and Italy, which are too big to bail out.
Earlier in the session, gold extended losses as crude oil and U.S. equities tumbled after the Supreme Court upheld President Barack Obama's healthcare law, which assesses a financial penalty to individuals who do not obtain health insurance.
The metal has for the most part of this year moved in tandem with riskier assets. In previous years, investors often flocked to gold as a safe haven, driving its price higher in response to economic fears.
Spot gold <XAU=> was down 1.4 percent at $1,553.10 an ounce by 3:16 p.m. EDT (1916 GMT), having earlier hit a four-week low at $1,547.39.
U.S. gold futures <GCQ2> for August delivery settled down $28 at $1,550.40.
Euro falls to more than 3-wk low as EU leaders meet
The euro slipped against the dollar for a fourth straight day on Thursday and touched its lowest in more than three weeks as doubts persisted that a summit of European leaders will make progress in resolving the region's deepening debt crisis.
But investors were reluctant to punish the euro further as expectations for the summit were already very low. Any surprise positive development could spark a short squeeze and give the euro zone common currency a lift, analysts said.
A short squeeze is when those who bet against a currency or security are forced to buy to reduce losses when the market moves against their bets.
European Union leaders began the summit on Thursday deeply divided over how to resolve the euro zone's debt crisis.
Many international investors have deserted Spanish and Italian debt, pushing yields to levels that Madrid at least cannot afford for long as it tries to save banks ravaged by a property market collapse and rein in an overshooting deficit.
German Chancellor Angela Merkel has previously dismissed pleas from Rome and Madrid for rapid measures to support their bonds.
French President Francois Hollande advocates joint "eurobonds", which would bring down borrowing costs for the weak because the pool of guarantors would include the strongest - principally Germany.
Germany, by contrast, does not want to use its credit rating to support others unless they share control of tax and spending powers first.
On arriving at his first full EU summit after six weeks in office, Hollande said he expected agreement on emergency steps to help euro zone partners whose borrowing costs had reached unsustainable levels.
The euro fell as low as $1.2405 <EUR=> on Reuters data, the weakest since June 4. It was last down 0.2 percent at $1.2449.
Against the yen, the euro slid 0.6 percent to 98.82 yen <EURJPY=>, having earlier fallen to 98.30 yen, the lowest since June 6.
Wall St pares losses late, ends modestly lower
U.S. stocks fell on Thursday but pared back sharp losses late in the session on talk of progress by European leaders in easing the region's debt crisis, while a Supreme Court ruling upholding a landmark healthcare law hit large health insurers.
Markets are especially skittish about any shift in expectations for the euro zone as European Union leaders met on the first day of a two-day summit in Brussels.
Stocks began lower and losses accelerated after a divided U.S. Supreme Court backed the centerpiece of President Barack Obama's healthcare overhaul law.
The decision surprised many investors who see the law, which requires that most Americans obtain insurance by 2014 or face a penalty, as a hallmark of a business unfriendly administration.
Shares later pared losses, though major insurers such as Aetna Inc <AET.N>, which face more regulation, ended lower. Other companies reliant on Medicaid, such as Wellcare Health Plans Inc <WCG.N> rose as their patient rolls are expected to increase.
The Morgan Stanley healthcare payor index <.HMO> added 0.6 percent. Aetna ended down 2.7 percent to $39.85; Wellcare jumped 8.8 percent to $53.98.
Shares of JPMorgan Chase & Co <JPM.N> dropped 2.5 percent to $35.88 after a New York Times report projecting that losses from a recent botched trade could reach $9 billion, more than four times the original estimate. A Reuters report estimated the losses between $4 billion to $6 billion.
U.S.-traded shares of Barclays <BCS.N> slumped 12.1 percent to $10.84 after Britain said it had brought in the fraud squad to investigate possible crimes over attempts to manipulate lending rates, a scandal that is expected to spread to other banks. Lloyds <LYG.N> fell 3.6 percent to $1.87 in New York.
As EU leaders began the two-day summit, finance officials were working on urgent measures to diminish financial market pressure on Spain and Italy, which may prove to be more difficult to bailout than smaller nations in the euro zone
Recent statements from German Chancellor Angela Merkel have been at odds with those of other European leaders on how to deal with the crisis, underscoring the difficulties in reaching common ground.
The Dow Jones industrial average <.DJI> dropped 24.75 points, or 0.20 percent, to 12,602.26. The Standard & Poor's 500 Index <.SPX> shed 2.81 points, or 0.21 percent, to 1,329.04. The Nasdaq Composite Index <.IXIC> lost 25.83 points, or 0.90 percent, to 2,849.49.
Oil Drops to Eight-Month Low on U.S., German Unemployment
Oil fell to an eight-month low as unemployment data from the U.S. and Germany spurred concern about the economic recovery as European Union leaders met to address the debt crisis.
Prices dropped 3.1 percent after the Labor Department reported U.S. applications for unemployment benefits hovered near the highest level of 2012 last week and the prior reading was revised up. German unemployment rose more than economists forecast in June. Oil also fell as the Supreme Court upheld the core of President Barack Obama’s health-care overhaul.
Crude for August delivery declined $2.52 to $77.69 a barrel on the New York Mercantile Exchange, the lowest settlement since October. Futures have fallen 25 percent this quarter, heading for the biggest drop since the final three months of 2008.
Brent oil for August settlement decreased $2.14, or 2.3 percent, to $91.36 a barrel on the London-based ICE Futures Europe exchange. It has retreated 26 percent since March 30.
Brent is set to recover from its worst quarter since 2008 as a European Union ban on Iranian oil takes effect, central banks act to protect growth and on speculation OPEC will curb some of its excess supply.
Source : Reuters
Hong Kong shares could start weaker on Friday ahead of the release of the official China PMI over the weekend and the outcome of a two-day European leaders summit later in the day, but the benchmark index should record a monthly gain.
Data due over the weekend is expected to show that activity at China's factories fell to seven-month lows in June. That would compound market concerns that the economy is stuck in a deeper and longer downturn than anticipated.
On Thursday, the Hang Seng Index <.HSI> closed down 0.8 percent at 19,025.3. It is up 2.1 percent in June.
Seoul shares seen rangebound before EU outcome
Seoul shares will likely be trapped in a narrow range on Friday as investors keep to the sidelines while they await the outcome of the European Union's debt crisis summit.
"Investors are waiting for further developments overnight in Europe and the reaction in Wall Street before making their bets, which will take place after the market closes out the week here, so trading looks to be quiet as the market braces for what might be a busy Monday," said Cho Byung-hyun, an analyst at Tong Yang Securities.
Italy and Spain held up agreement on measures to promote growth at a European Union summit on Thursday to demand urgent action to bring down their borrowing costs, although EU leaders remain deep divided over the crisis response.
South Korea cut this year's economic growth target on Thursday and unveiled plans to boost public spending by more than $7 billion to shore up Asia's fourth-largest economy in the face of the euro zone crisis.
Nikkei set to rise on end-of-month short-covering
Japan's Nikkei share average is likely to rise on Friday as a spurt of month-end short covering winds back quarterly losses, although early trading may be depressed after EU leaders ended the first day of a summit at loggerheads.
The Nikkei has fallen 12 percent so far in the second quarter, which ends today, wiping out much of the first-quarter's 19.3 percent surge, the biggest first-quarter gain in 24 years.
Market players said the Nikkei <.N225> was likely to trade between 8,750 to 8,950, potentially dipping initially before gains accelerate into the afternoon session as investors unravel their short bets.
"Hopes for any significant progress at the EU summit have already evaporated, but if they don't even agree on the details of the Spanish bank bailout and hint that the ECB will drop rates, there will be disappointment," said Masayuki Doshida, senior market analyst at Rakuten Securities.
Euro zone leaders are to conclude the two-day meeting later on Friday to discuss how to tackle an expanding debt zone crisis. On Thursday, Italian and Spanish leaders refused to sign a growth package until Germany agreed to a short-term plan to reduce the cost of their credit.
Gold down over 1 pct on US healthcare ruling, Europe
Gold fell more than 1 percent on Thursday, hit by worries of an economic slowdown after a U.S. Supreme Court ruling upheld a landmark healthcare law and by fading hopes that a European Union summit will resolve that region's debt crisis.
Bullion investors were frustrated as it is unlikely that additional stimulus will come out of the summit beginning Thursday in Brussels, as European finance officials were working on urgent measures to ease market pressure on Spain and Italy, which are too big to bail out.
Earlier in the session, gold extended losses as crude oil and U.S. equities tumbled after the Supreme Court upheld President Barack Obama's healthcare law, which assesses a financial penalty to individuals who do not obtain health insurance.
The metal has for the most part of this year moved in tandem with riskier assets. In previous years, investors often flocked to gold as a safe haven, driving its price higher in response to economic fears.
Spot gold <XAU=> was down 1.4 percent at $1,553.10 an ounce by 3:16 p.m. EDT (1916 GMT), having earlier hit a four-week low at $1,547.39.
U.S. gold futures <GCQ2> for August delivery settled down $28 at $1,550.40.
Euro falls to more than 3-wk low as EU leaders meet
The euro slipped against the dollar for a fourth straight day on Thursday and touched its lowest in more than three weeks as doubts persisted that a summit of European leaders will make progress in resolving the region's deepening debt crisis.
But investors were reluctant to punish the euro further as expectations for the summit were already very low. Any surprise positive development could spark a short squeeze and give the euro zone common currency a lift, analysts said.
A short squeeze is when those who bet against a currency or security are forced to buy to reduce losses when the market moves against their bets.
European Union leaders began the summit on Thursday deeply divided over how to resolve the euro zone's debt crisis.
Many international investors have deserted Spanish and Italian debt, pushing yields to levels that Madrid at least cannot afford for long as it tries to save banks ravaged by a property market collapse and rein in an overshooting deficit.
German Chancellor Angela Merkel has previously dismissed pleas from Rome and Madrid for rapid measures to support their bonds.
French President Francois Hollande advocates joint "eurobonds", which would bring down borrowing costs for the weak because the pool of guarantors would include the strongest - principally Germany.
Germany, by contrast, does not want to use its credit rating to support others unless they share control of tax and spending powers first.
On arriving at his first full EU summit after six weeks in office, Hollande said he expected agreement on emergency steps to help euro zone partners whose borrowing costs had reached unsustainable levels.
The euro fell as low as $1.2405 <EUR=> on Reuters data, the weakest since June 4. It was last down 0.2 percent at $1.2449.
Against the yen, the euro slid 0.6 percent to 98.82 yen <EURJPY=>, having earlier fallen to 98.30 yen, the lowest since June 6.
Wall St pares losses late, ends modestly lower
U.S. stocks fell on Thursday but pared back sharp losses late in the session on talk of progress by European leaders in easing the region's debt crisis, while a Supreme Court ruling upholding a landmark healthcare law hit large health insurers.
Markets are especially skittish about any shift in expectations for the euro zone as European Union leaders met on the first day of a two-day summit in Brussels.
Stocks began lower and losses accelerated after a divided U.S. Supreme Court backed the centerpiece of President Barack Obama's healthcare overhaul law.
The decision surprised many investors who see the law, which requires that most Americans obtain insurance by 2014 or face a penalty, as a hallmark of a business unfriendly administration.
Shares later pared losses, though major insurers such as Aetna Inc <AET.N>, which face more regulation, ended lower. Other companies reliant on Medicaid, such as Wellcare Health Plans Inc <WCG.N> rose as their patient rolls are expected to increase.
The Morgan Stanley healthcare payor index <.HMO> added 0.6 percent. Aetna ended down 2.7 percent to $39.85; Wellcare jumped 8.8 percent to $53.98.
Shares of JPMorgan Chase & Co <JPM.N> dropped 2.5 percent to $35.88 after a New York Times report projecting that losses from a recent botched trade could reach $9 billion, more than four times the original estimate. A Reuters report estimated the losses between $4 billion to $6 billion.
U.S.-traded shares of Barclays <BCS.N> slumped 12.1 percent to $10.84 after Britain said it had brought in the fraud squad to investigate possible crimes over attempts to manipulate lending rates, a scandal that is expected to spread to other banks. Lloyds <LYG.N> fell 3.6 percent to $1.87 in New York.
As EU leaders began the two-day summit, finance officials were working on urgent measures to diminish financial market pressure on Spain and Italy, which may prove to be more difficult to bailout than smaller nations in the euro zone
Recent statements from German Chancellor Angela Merkel have been at odds with those of other European leaders on how to deal with the crisis, underscoring the difficulties in reaching common ground.
The Dow Jones industrial average <.DJI> dropped 24.75 points, or 0.20 percent, to 12,602.26. The Standard & Poor's 500 Index <.SPX> shed 2.81 points, or 0.21 percent, to 1,329.04. The Nasdaq Composite Index <.IXIC> lost 25.83 points, or 0.90 percent, to 2,849.49.
Oil Drops to Eight-Month Low on U.S., German Unemployment
Oil fell to an eight-month low as unemployment data from the U.S. and Germany spurred concern about the economic recovery as European Union leaders met to address the debt crisis.
Prices dropped 3.1 percent after the Labor Department reported U.S. applications for unemployment benefits hovered near the highest level of 2012 last week and the prior reading was revised up. German unemployment rose more than economists forecast in June. Oil also fell as the Supreme Court upheld the core of President Barack Obama’s health-care overhaul.
Crude for August delivery declined $2.52 to $77.69 a barrel on the New York Mercantile Exchange, the lowest settlement since October. Futures have fallen 25 percent this quarter, heading for the biggest drop since the final three months of 2008.
Brent oil for August settlement decreased $2.14, or 2.3 percent, to $91.36 a barrel on the London-based ICE Futures Europe exchange. It has retreated 26 percent since March 30.
Brent is set to recover from its worst quarter since 2008 as a European Union ban on Iranian oil takes effect, central banks act to protect growth and on speculation OPEC will curb some of its excess supply.
Source : Reuters
