BUSINESS TUESDAY, MAY 3, 2016 PARIS: European shares rallied yesterday in holiday-thinned trading ahead of key US and eurozone data despite a sharp drop in Tokyo as a surging yen hit exporters. Frankfurt and Paris pushed slightly higher after ending last week deep in the red as markets eyed possible clouds looming on the global economic horizon and digested a shock decision in Japan. Tokyo stocks plunged more than three per- cent leading a sell-off across Asia, also in limit- ed holiday trades, after the Bank of Japan sur- prised markets by opting Thursday not to unleash fresh stimulus despite signs of falter- ing growth. After Friday’s public holiday in Japan, the Nikkei closed 3.1 percent lower yesterday. “We expect short-term share market volatility to remain high,” Shane Oliver, the Sydney-based head of investment strategy AMP Capital Investors, told Bloomberg News. “Failure by the BoJ to do more soon risks unwinding all the progress on inflation expec- tations seen under Abenomics, particularly with the yen breaking to ever higher levels,” he added, referring to Prime Minister Shinzo Abe’s growth policy blitz. But in the eurozone, Germany’s DAX 30 climbed 0.7 percent, while France’s CAC 40 rose 0.4 percent after both rounded off last week heavily lower as a strong jump in euro- zone growth was offset by another fall in con- sumer prices. London’s FTSE 100 was closed for a public holiday Monday. Germany’s DAX rose 1 percent to 10,140.88 and France’s CAC 40 added 0.6 percent to 4,453.24. Britain’s FTSE 100 was closed for a bank holiday. Wall Street looked set for an upbeat day, with Dow and S&P 500 futures both up 0.2 percent. “Some disappointing earnings and a higher euro versus the US dollar probably led to profit taking in European equities despite a better than expected eurozone Q1 (first-quarter) GDP number,” ING Credit Strategy’s Quentin Gilletta said in a note to investors. Despite Paris shares trading higher, a rise in the euro against the dollar was holding investors back, Philippe Cohen, of Barclays Bourse, said. Investors were also likely keeping an eye on key manufactur- ing data in the US and eurozone due to be released later. On Sunday, China released figures showing the country’s factory activity eased slightly in April but continued to expand, helped by a recov- ery in the property market and indicat- ing some level of stability was returning. Takata dives The yen has soared against the dollar since the BoJ decision, which came soon after the US Federal Reserve indicated it was keeping its eye on market move- ments before hiking interest rates again. And it remains elevated despite Japan Finance Minister Taro Aso trying to talk it down by hinting at possible intervention if its strength continues. On Saturday he said the rally was “extremely worrying”, adding that “speculative moves are seen behind it”. “Tokyo will continue watching the market trends carefully and take actions when necessary,” he said. The greenback bought 106.49 yen yesterday, well down from the levels above 111 yen before the BoJ’s surprise announcement. With the yen rallying, Japan’s exporters were under pressure as it reduces the value of their overseas profits. Sony and Fast Retailing each lost more than four percent, while Toyota slipped 3.8 percent. Troubled car parts maker Takata plunged 9.3 percent after reports in various media said more than 100 mil- lion vehicles equipped with air bags made by the company are likely to be subject to global recalls, up from the cur- rent 60 million. The auto parts giant has been ham- mered by an exploding air bag defect blamed for at least 11 deaths. The selling in Asia came after US stocks ended Friday deep in the red as a weak consumer spending reading compounded a below- forecast economic growth result and an uninspiring set of corporate reports. Markets in Hong Kong, China, Taiwan, Singapore and Malaysia were closed yes- terday. Japan is in the middle of its Golden Week holidays and markets there will be closed today, tomorrow and Thursday of this week. Investors have also turned broadly negative on the dollar in the past two months, worried that the US Federal Reserve will be unable to raise interest rates this year. A fall to a 6-1/2 month low of $1.1493 against the euro bodes ill for the run-up to payrolls data on Friday. The dollar index of its strength against a bas- ket of six rival currencies, fell 0.2 percent to 92.868. “The start of the new month does not mean a new trend. The technical tone of the dollar is weak,” Brown Brothers Harriman’s global head of currency strat- egy in New York, Marc Chandler, said in a note to clients. “The Federal Reserve acknowledges the continued improve- ment in the labour market. The problem is that it has not translated to stronger consumption, and business investment remains soft.” — Agencies Europe stocks rally, shrug off Asia losses
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B U S I N E S S
TUESDAY, MAY 3, 2016
PARIS: European shares rallied yesterday inholiday-thinned trading ahead of key USand eurozone data despite a sharp drop inTokyo as a surging yen hit expor ters.Frankfurt and Paris pushed slightly higherafter ending last week deep in the red asmarkets eyed possible clouds looming onthe global economic horizon and digested ashock decision in Japan.
Tokyo stocks plunged more than three per-cent leading a sell-off across Asia, also in limit-ed holiday trades, after the Bank of Japan sur-prised markets by opting Thursday not tounleash fresh stimulus despite signs of falter-ing growth.
After Friday’s public holiday in Japan, the
Nikkei closed 3.1 percent lower yesterday. “Weexpect short-term share market volatility toremain high,” Shane Oliver, the Sydney-basedhead of investment strategy AMP CapitalInvestors, told Bloomberg News.
“Failure by the BoJ to do more soon risksunwinding all the progress on inflation expec-tations seen under Abenomics, particularlywith the yen breaking to ever higher levels,”he added, referring to Prime Minister ShinzoAbe’s growth policy blitz.
But in the eurozone, Germany’s DAX 30climbed 0.7 percent, while France’s CAC 40rose 0.4 percent after both rounded off lastweek heavily lower as a strong jump in euro-zone growth was offset by another fall in con-
sumer prices. London’s FTSE 100 was closedfor a public holiday Monday.
Germany’s DAX rose 1 percent to 10,140.88and France’s CAC 40 added 0.6 percent to4,453.24. Britain’s FTSE 100 was closed for abank holiday. Wall Street looked set for anupbeat day, with Dow and S&P 500 futuresboth up 0.2 percent.
“Some disappointing earnings and ahigher euro versus the US dollar probablyled to profit taking in European equitiesdespite a better than expected eurozone Q1(first-quarter) GDP number,” ING CreditStrategy’s Quentin Gilletta said in a note toinvestors.
Despite Paris shares trading higher, a rise in
the euro against the dollar was holdinginvestors back, Philippe Cohen, ofBarclays Bourse, said. Investors were alsolikely keeping an eye on key manufactur-ing data in the US and eurozone due tobe released later. On Sunday, Chinareleased figures showing the country’sfactory activity eased slightly in April butcontinued to expand, helped by a recov-ery in the property market and indicat-ing some level of stability was returning.
Takata dives The yen has soared against the dollar
since the BoJ decision, which came soonafter the US Federal Reserve indicated itwas keeping its eye on market move-ments before hiking interest rates again.
And it remains elevated despite JapanFinance Minister Taro Aso trying to talk itdown by hinting at possible interventionif its strength continues. On Saturday hesaid the rally was “extremely worrying”,adding that “speculative moves are seenbehind it”.
“Tokyo will continue watching themarket trends carefully and take actionswhen necessary,” he said. The greenbackbought 106.49 yen yesterday, well downfrom the levels above 111 yen before theBoJ’s surprise announcement. With theyen rallying, Japan’s exporters wereunder pressure as it reduces the value oftheir overseas profits.
Sony and Fast Retailing each lost morethan four percent, while Toyota slipped3.8 percent. Troubled car parts makerTakata plunged 9.3 percent after reportsin various media said more than 100 mil-
lion vehicles equipped with air bagsmade by the company are likely to besubject to global recalls, up from the cur-rent 60 million.
The auto parts giant has been ham-mered by an exploding air bag defectblamed for at least 11 deaths. The sellingin Asia came after US stocks ended Fridaydeep in the red as a weak consumerspending reading compounded a below-forecast economic growth result and anuninspiring set of corporate reports.Markets in Hong Kong, China, Taiwan,Singapore and Malaysia were closed yes-terday. Japan is in the middle of itsGolden Week holidays and markets therewill be closed today, tomorrow andThursday of this week.
Investors have also turned broadlynegative on the dollar in the past twomonths, worried that the US FederalReserve will be unable to raise interestrates this year. A fall to a 6-1/2 month lowof $1.1493 against the euro bodes ill forthe run-up to payrolls data on Friday. Thedollar index of its strength against a bas-ket of six rival currencies, fell 0.2 percentto 92.868.
“The start of the new month does notmean a new trend. The technical tone ofthe dollar is weak,” Brown BrothersHarriman’s global head of currency strat-egy in New York, Marc Chandler, said in anote to clients. “The Federal Reserveacknowledges the continued improve-ment in the labour market. The problemis that it has not translated to strongerconsumption, and business investmentremains soft.” — Agencies
Europe stocks rally, shrug off Asia losses
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