European shares open higher led by miners, healthcare

Aug 23 (Reuters) – European shares opened higher on Wednesday, with mining stocks leading gains on higher metal prices, while Swiss drugmaker Roche lifted healthcare stocks.

By 0707 GMT, the pan-European STOXX 600 gained 0.4%.

Mining stocks added 0.9% as prices of most base metals trended up.

Roche jumped 3.1% after the Swiss drugmaker said it had been made aware of an inadvertent disclosure in a study of its new immunotherapy for patients with lung cancer using an experimental class of drugs known as anti-TIGIT.

The broader healthcare index added 0.8%.

Investors will be eyeing eurozone Purchasing Managers’ Index (PMI) data for the month of August, due later in the day, to assess the state of the continental economy.

Separately, PMIs from Germany, the UK and France will also be on investors’ radar.

Among individual stocks, Societe Generale rose 2.0% after Morgan Stanley upgraded the French bank to “overweight” from “equal-weight.”

Orsted added 1.6% after the U.S. Interior Department approved the construction of a 704 megawatt (MW) wind farm off the coast of Rhode Island, which is owned by the renewable energy group.

(Reporting by Shashwat Chauhan in Bengaluru; Editing by Varun H K)

After the rebound, markets revert to type

Aug 23 – After Monday’s surprising resilience on Wall Street, world markets’ reversion to type on Tuesday should set the tone for Asia on Wednesday – weakness in stocks, a buoyant dollar, elevated bond yields, and souring investor sentiment.

The regional economic data calendar includes the release of Australian and Japanese purchasing managers index reports that will give the first glimpses into how these economies performed in August, and consumer price inflation from Singapore.

There is no obvious catalyst on Wednesday from economic indicators, central bank decisions, or policymaker commentary to shake Asian markets out of their recent funk. Until there is, rebounds like Tuesday’s are likely to be the exception rather than the rule.

China’s economic and financial travails remain top of mind for investors, so any sign of further incoming fiscal or monetary stimulus from Beijing will be well received.

Chinese President Xi Jinping, in South Africa for the summit of BRICS nations’ leaders, said on Tuesday that China’s economy was resilient and that the fundamentals for its long-term growth remained unchanged.

Platitudes aside, speculation persists that the central bank could be forced to take bolder action to support the yuan, perhaps by selling some of its large stash of US Treasuries. The same goes for Japanese authorities and the yen.

That is not something Beijing or Tokyo would do lightly, but the higher US bond yields go, the more persistent the selling pressure on their respective currencies becomes. Earlier on Tuesday the 10-year US Treasury yield touched 4.366%, its highest level since November 2007.

Yet FX markets are calm, perhaps too calm.

Implied yen volatility is relatively low in the yuan, and low across currency markets more broadly. US bond market volatility may be at a six-week high, but is in the middle of its range over the past 18 months.

Meanwhile, embattled Chinese property developer Country Garden is slated to release its latest results on Wednesday. China’s largest developer has liabilities approaching USD 200 billion, its shares have lost almost all their value in the last couple of years and they will soon be removed from Hong Kong’s benchmark Hang Seng index.

But investors will still be keen to see just how deep in the mire the company is. China’s real estate sector is the largest asset class in the world, worth around USD 62 trillion, and the systemic risks to China’s economy and financial system are huge.

US-Sino relations are also back under the spotlight after Washington on Tuesday criticized China for reducing the transparency of its reporting on basic economic data in recent months and for cracking down on firms in China that had been providing such data, calling its behavior irresponsible.

But if that was the stick, the US government also offered a carrot on Tuesday, confirming that Commerce Secretary Gina Raimondo will travel to China next week for meetings with senior Chinese government officials and US business leaders.

Here are key developments that could provide more direction to markets on Wednesday:

– BRICS leaders summit in Johannesburg

– Japan flash PMIs (August)

– Australia flash PMIs (August)

(By Jamie McGeever; Editing by Josie Kao)

Dow, S&P 500 end down as US interest-rate worries mount, bank shares slip

NEW YORK, Aug 22 – The Dow and S&P 500 ended slightly lower on Tuesday as investors stayed worried the Federal Reserve will keep interest rates higher for longer and as banks’ shares eased.

The Nasdaq finished barely in the green.

The financial sector fell 0.9% and was the biggest drag on the S&P 500. An S&P downgrade of credit ratings of multiple regional US lenders weighed on banks’ shares, with the KBW regional banking index sliding 2.7% and the S&P 500 banks index falling 2.4%.

Investors hope for clarity on the rate outlook when Fed Chair Jerome Powell speaks at a meeting of central bankers on Friday in Jackson Hole, Wyoming.

“Rates have backed up pretty good again, so that’s kind of putting somewhat of a damper on stocks,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

The benchmark 10-year Treasury yield hit almost 16-year highs overnight on the view the Fed could keep rates higher for longer. Higher borrowing costs can slow spending by businesses and consumers.

The Dow Jones Industrial Average fell 174.86 points, or 0.51%, to 34,288.83, the S&P 500 lost 12.22 points, or 0.28%, to 4,387.55 and the Nasdaq Composite added 8.28 points, or 0.06%, to 13,505.87.

Investors also eagerly awaited results and a forecast from chip heavyweight Nvidia (NVDA) due after the bell on Wednesday. Nvidia surprised investors with its strong forecast in May, fueling a rally in its own and other tech stocks amid artificial intelligence hopes.

Shares of Nvidia hit an all-time high of USD 481.87 early but were down 2.8% on the day.

Department stores were among the day’s biggest decliners. Macy’s (M) sank 14.1% after the chain warned of weak consumer spending through the crucial holiday shopping season. Shares of Kohl’s Corp. (KSS) were down 10.3% while Nordstrom Inc (JWN) was down 9.8%.

Volume on US exchanges was 9.38 billion shares, compared with the 10.97 billion average for the full session over the last 20 trading days.

Declining issues outnumbered advancing ones on the NYSE by a 1.43-to-1 ratio; on Nasdaq, a 1.43-to-1 ratio favored decliners.

The S&P 500 posted 4 new 52-week highs and 13 new lows; the Nasdaq Composite recorded 39 new highs and 221 new lows.

(Reporting by Caroline Valetkevitch; additional reporting by Amruta Khandekar and Shristi Achar A; Editing by Shinjini Ganguli, Maju Samuel, and David Gregorio)

Dollar firmer as traders look to Jackson Hole gathering

NEW YORK, Aug 22 – The US dollar edged higher against a basket of currencies on Tuesday, nearing a two-month peak touched last week, as traders awaited the Jackson Hole Symposium later in the week.

The US dollar index – which measures the currency against six major counterparts – was up 0.2% at 103.57. The index was sitting just shy of the two-month high of 103.68, reached last week as worries over China’s economy and bets US interest rates will stay high lifted the greenback.

Overall moves in currency markets were expected to be limited ahead of a speech by Federal Reserve Chair Jerome Powell at the Fed’s central bank symposium at Jackson Hole, Wyoming, set for Aug. 24-26.

“Powell’s appearance will be watched very closely,” Helen Given, FX trader at Monex USA in Washington, said.

“I don’t see any huge moves for USD before the symposium; no one wants to get caught on the wrong side of the market,” she said.

Traders were also paying attention to a summit of BRICS major emerging economies – Brazil, Russia, India, China, and South Africa – underway in Johannesburg for any news on Chinese stimulus.

“Right now, the world is watching China with bated breath waiting for further stimulus measures,” Monex’s Given said.

“It would be too strong to even call China’s economic recovery ‘sputtering’ at this point; indications are those of an economy in contraction, and this in turn is keeping riskier assets depressed,” she said.

China’s leader Xi Jinping told the BRICS bloc of nations on Tuesday that China’s economy was resilient and that the fundamentals for its long-term growth remained unchanged.

Riskier assets took a knock last week and US Treasury yields soared to near 16-year peaks as investors fretted over China’s slowing economic growth and traders geared up for US interest rates to remain higher for longer.

The yen remained under pressure as traders watched for any signs the Japanese government was ready to intervene to prop up the currency, as it did last year.

The dollar was 0.24% lower against the yen, but not far from the 9-month high touched last week.

“My expectation still sits at that 147 mark. Verbal cues last week from the bank of Japan provided a temporary breather for the currency, but if JPY can’t hold its ground I still see a high potential for intervention,” Monex’s Given said.

China’s battered yuan briefly firmed to a one-week high before weakening again as worries about the economy continued to weigh on the currency.

The Chinese central bank set the yuan mid-point at 7.1992 per dollar on Tuesday, 1105 pips firmer than Reuters’ estimate, seeking to keep a floor under the currency after its slide to a 9-1/2-month low of 7.349 in offshore trading last week.

Tuesday’s fixing follows shallower and narrower interest rate cuts than markets had expected a day earlier, as stimulus measures continued to underwhelm in the face of property sector turmoil and weakening economic growth.

Britain’s pound slipped 0.1% on Tuesday, taking little solace from a moderate pick-up in risk appetite.

In cryptocurrencies, bitcoin fell 0.87% to USD 25,897, hovering above the 2-month low hit last week, as overall sentiment in the cryptocurrency market remained bearish.

(Reporting by Saqib iqbal Ahmed; additional reporting by Dhara Ranasinghe in London, Kevin Buckland in Toyko; Editing by Bernadette Baum, Mark Heinrich, and Chizu Nomiyama)

Gold holds near five-month low, focus turns to Jackson Hole

Aug 22 – Gold prices hovered near a five-month low on Tuesday as a stronger dollar and higher bond yields dented bullion’s appeal, while the focus shifted to the Jackson Hole symposium due later this week for more cues on the interest rate outlook.

Spot gold was nearly unchanged at USD 1,896.60 an ounce by 1:43 p.m. EDT (1743 GMT), but still held near the low of USD 1,883.70 touched on Friday. US gold futures settled 0.2% higher at USD 1,926.00.

Benchmark 10-year US Treasury yields eased for the day. However, they were still near their 15-year high levels.

Meanwhile, limiting gold’s upside, the dollar rose 0.2%, making gold more expensive for holders of other currencies.

Gold prices fell to their lowest level since March last week as strong US economic data boosted bets that US interest rates would stay higher for longer. Higher rates increase bond yields, making non-yielding bullion less attractive.

“The Fed is going to remain optimistic here and that’s probably going to support the argument that maybe the Fed will have to do more tightening,” said Edward Moya, senior market analyst of the Americas at OANDA.

Richmond Fed president Thomas Barkin said the US central bank needs to defend the 2% inflation target to ensure its own credibility remains intact with the public.

On the technical front, gold prices are trading below the 50, 100, and 200-day moving averages. Speculators who trade on technical signals regard a break below such moving averages as a bearish sign.

Indicative of sentiment, receding fears of a US slowdown, and surging bond yields have gradually eroded the appeal of exchange-traded funds (ETF) backed by safe-haven gold.

“Against this backdrop, gold will doubtless find it difficult to come out of the defensive in the near future. That said, sentiment is now already so bearish that it wouldn’t take much to spark a price recovery,” Commerzbank said in a note.

Spot silver rose 0.3% to USD 23.41 an ounce, while platinum gained 1.2% to USD 920.19. Palladium was up 1.1% at USD 1,258.34.

(Reporting by Brijesh Patel and Harshit Verma in Bengaluru; editing by Christina Fincher and Maju Samuel)

Oil prices settle lower on nagging worries about Chinese demand

Aug 22 – Oil prices settled lower on Tuesday as investors remained focused on the likelihood that China’s economic malaise will keep hobbling demand from the world’s top crude importer.

Brent crude settled down 43 cents, or 0.5% at USD 84.03 a barrel while the more active US West Texas Intermediate October contract slipped 48 cents to USD 79.64.

The front-month WTI contract settled down 37 cents at USD 80.35 a barrel on very limited volume ahead of its imminent expiry.

China, the world’s second-largest economy, is considered crucial to shoring up oil demand over the rest of the year. Its sluggish economic activity has frustrated markets as pledged stimulus has fallen short of expectations, including a smaller-than-expected cut in a key lending benchmark on Monday.

“Saudi and Russian output cuts have been largely negated by weakening crude demand from China that appeared to develop last month and is apt to continue through the rest of the summer,” said Jim Ritterbusch, president of Ritterbusch and Associates LLC in Galena, Illinois.

Amplifying demand concerns, US central bank officials have not ruled out further interest rate hikes to contain inflation.

The US continued to draw crude stocks, which dropped by about 2.4 million barrels in the week ended Aug. 18, according to market sources citing American Petroleum Institute figures on Tuesday.

The Iraqi and Turkish oil ministers have discussed the importance of resuming oil flows after finalizing pipeline maintenance, the Iraqi state news agency reported, a development that could boost global supply.

Turkey had halted Iraq’s 450,000 barrels per day (bpd) of exports – roughly 0.5% of global supply – through the northern Iraq-Turkey pipeline in March after an International Chamber of Commerce arbitration ruling.

“Such an export resumption could add almost half a million barrels per day to global oil supply in making a significant dent in Saudi Arabia’s additional production cut that is expected to extend through next month,” said Ritterbusch.

Separately on Monday, Shell (SHEL) said it was investigating a possible leak on the 180,000 bpd Trans Niger oil pipeline, though no force majeure has been declared.

(Additional reporting by Natalie Grover and Paul Carsten in London, Muyu Xu in Singapore, and Katya Golubkova in Tokyo; Editing by Tomasz Janowski, David Evans, David Goodman, David Gregorio, and Cynthia Osterman)

Oil dips on possible easing of tight supply, China woes hurt demand outlook

SINGAPORE, Aug 22 – Oil edged lower on Tuesday as the market waited to see if Iraqi oil exports resume, which could ease the supply tightness caused by the OPEC+ cut, while a faltering Chinese economy continued to undercut the global demand outlook.

Brent crude was down 8 cents at USD 84.38 a barrel and US West Texas Intermediate crude slipped 8 cents at USD 80.04 a barrel at 0241 GMT. WTI’s contract with September expiry CLc1 was trading 7 cents lower at USD 80.65 a barrel.

“Crude oil struggled to keep its head above water on signs of supply tightness easing,” said Brian Martin and Daniel Hynes, analysts from ANZ Bank in a note to clients.

Iraq’s oil minister Hayan Abdel-Ghani arrived in the Turkish capital Ankara to discuss several issues including the resumption of oil exports through the Ceyhan oil terminal, a source in the minister’s office told Reuters on Monday.

Turkey halted Iraq’s 450,000 barrels per day (bpd) of exports through the northern Iraq-Turkey pipeline on March 25 after an arbitration ruling by the International Chamber of Commerce (ICC).

More Iraqi crude oil coming on to the market could help alleviate the supply crunch for sour crude as the Organization of the Petroleum Exporting Countries and the allies (OPEC+) prolonged and deepened production cuts.

Meanwhile, gloom over the economic outlook in China, the world’s second biggest oil consumer, continued to pressure oil prices and heighten worries about fuel demand.

China’s central bank on Monday cut its one-year lending rate only moderately to the disappointment of the market which had expected more aggressive stimulus steps amid a rapid loss in economic momentum.

“China’s economic weakness is weighing on oil prices and will create a ceiling for them this year, especially as Beijing appears committed to avoiding large-scale fiscal stimulus,” Eurasia Group said in a note.

J.P.Morgan analysts estimated that global demand growth for mobility fuels decelerated to 0.6 mbd year-on-year for the reference week ending August 12.

Year-to-date, with China’s base effect now out of the numbers, growth in demand for mobility fuels slipped to 1.6 mbd compared to the same period last year, they said.

Putting a floor to oil prices, US crude oil and gasoline inventories were expected to have fallen last week, a preliminary Reuters poll showed, as the American Petroleum Institute industry group is due to release data later on Tuesday.

The Energy Information Administration, the statistical arm of the U.S. Department of Energy, is due to release its own data on Wednesday.

The market is also focusing on preliminary U.S. August PMI data and the Federal Reserve’s annual economic symposium at Jackson Hole both due later this week.

US economic data over recent weeks has bolstered expectations for the Fed to keep rates higher for longer, putting a dampener on the demand outlook for oil and a broad range of consumer goods.

(Reporting by Muyu Xu in Singapore and Katya Golubkova in Tokyo; Editing by Shri Navaratnam)

A rare ray of light in selling gloom?

Aug 22 – Asian stocks, particularly Chinese markets, may have started the week badly but Wall Street’s resilience on Monday in the face of 10-year bond yields’ surge to new multi-year highs could offer some respite on Tuesday.

To be sure, there aren’t many obvious reasons for the rot to stop other than the bearishness may be overdone in the short-term – the MSCI Asia ex-Japan index is down eight days in a row, its longest losing streak since January 2020, and China’s blue-chip index has fallen nine of the last 11 sessions.

The flow of economic data and policy actions out of China remains underwhelming. The latest figures show land sales revenues for the government fell for a 19th straight month and overall fiscal revenue growth slowed in July.

Foreigners sold Chinese stocks for the 11th day in a row on Monday, dumping nearly USD 1 billion via the Stock Connect, and reaction to the central bank cutting the one-year loan prime rate by 10 basis points and leaving the five-year rate unchanged was one of overwhelming disappointment.

The spread between Chinese and US 10-year bonds widened to 180 basis points on Monday, the biggest gap since January 2007 and a growing source of severe downward pressure on the yuan.

State-owned banks are actively supporting the offshore yuan, sources say. If the yuan continues to fall, however, speculation is sure to mount that more direct FX intervention could follow from Beijing via the sale of US Treasury bonds.

Ditto Japan and the yen, which is also extremely weak against the dollar and in territory that triggered record yen-supporting intervention late last year. Some analysts reckon Tokyo could intervene selling dollars around 150 yen, only four big figures away from the current 146 yen.

The dollar continues to draw support from the relentless upswing in US bond yields. The 10-year yield rose to 4.35% on Monday, its highest since late 2007, and the real 10-year yield topped 2% for the first time since July 2009.

With the Fed’s Jackson Hole Symposium looming later this week, debate among investors and analysts is intensifying around the longer-term equilibrium level of interest rates – so-called R-star – the merits of raising the Fed’s 2% inflation goal, and whether the post-Great Financial Crisis of zero interest rates is gone forever.

Tech giant Nvidia’s 8.5% surge on Monday, fueled by investor optimism ahead of its earnings this week, almost single-handedly boosted Wall Street and gave the Nasdaq its best day in almost four weeks.

Optimism across Asian markets is in short supply. Investors will be hoping for some spillover on Tuesday.

Here are key developments that could provide more direction to markets on Tuesday:

– BRICS leaders summit in Johannesburg

– South Korea consumer sentiment (August)

– Indonesia current account (Q2)

(By Jamie McGeever; Editing by Josie Kao)

Nasdaq rallies with Nvidia, tech shares; investors look toward Jackson Hole

NEW YORK, Aug 21 – The Nasdaq ended more than 1% higher and the S&P 500 also rose on Monday, with shares of Nvidia jumping as investors were optimistic ahead of its earnings this week, and other technology-related stocks gaining.

The Dow Jones industrial average ended slightly lower.

The yield on 10-year Treasury notes hit highs last seen during the Great Financial Crisis in 2007 as investors looked warily toward a meeting of central bankers who convene on Thursday at Jackson Hole in Wyoming. Federal Reserve Chair Jerome Powell is due to speak on Friday.

The technology sector gave the biggest boost to the S&P 500 and Nasdaq, while an index of semiconductors advanced 2.8%.

Nvidia (NVDA) rose 8.5%, leading gains among semiconductor stocks, as HSBC raised its price target on the stock to USD 780, the second highest on Wall Street.

Nvidia, one of the biggest winners in this year’s artificial intelligence tech stock rally, is expected to forecast quarterly revenue above analysts’ estimates when it reports late on Wednesday. Nvidia’s stock is up more than 220% for the year so far, while the Nasdaq is up 29%.

“Nvidia is considered the brand for AI,” said Quincy Krosby, chief global strategist at LPL Financial in Charlotte, North Carolina. “Their targets have been lifted dramatically, so the question is, can they deliver… A catalyst coming in with Nvidia would be extremely helpful.”

At the same time, she said, investors are anxious to hear Powell’s comments at Jackson Hole. Concerns the Fed will keep interest rates higher for longer have pushed up US Treasury yields, and fanned worries about the impact of higher rates on businesses and consumers.

The Dow Jones Industrial Average fell 36.97 points, or 0.11%, to 34,463.69, the S&P 500 gained 30.06 points, or 0.69%, to 4,399.77 and the Nasdaq Composite added 206.81 points, or 1.56%, to 13,497.59.

Among decliners in the Dow, Johnson & Johnson JNJ.N shares fell 3% after the healthcare conglomerate said it was expecting to retain a stake of about 9.5% in its newly separated consumer health unit, Kenvue (KVUE).

Goldman Sachs Group’s stock (GS) dipped 0.9% after the bank said it was weighing the sale of a part of its wealth business.

Also in the tech space, Palo Alto Networks (PANW) surged 14.8% after the cybersecurity firm alleviated worries about its late Friday release of results with a strong quarter and a forecast for annual billings above expectations.

And VMware (VMW) jumped 4.9% after UK’s competition regulator cleared Broadcom’s (AVGO) purchase of the cloud computing firm. Broadcom’s stock gained 4.8%.

Volume on US exchanges was 9.75 billion shares, compared with the 10.99 billion average for the full session over the last 20 trading days.

Declining issues outnumbered advancing ones on the NYSE by a 1.44-to-1 ratio; on Nasdaq, a 1.08-to-1 ratio favored decliners.

The S&P 500 posted 3 new 52-week highs and 18 new lows; the Nasdaq Composite recorded 36 new highs and 214 new lows.

(Reporting by Caroline Valetkevitch; additional reporting by Amruta Khandekar and Shristi Achar; Editing by Arun Koyyur, Vinay Dwivedi, and David Gregorio)

Gold hovers near 5-month low as yields rise, Jackson Hole in focus

Aug 21 – Gold prices hovered around a five-month low on Monday, as elevated bond yields pressured bullion, while investors looked ahead to the US Federal Reserve’s Jackson Hole symposium later this week for more clarity on the interest rate path.

Spot gold edged up 0.3% to USD 1,893.82 per ounce by 02:13 p.m. ET (1813 GMT), but still held near a five-month low of USD 1,883.70 it touched on Friday.

US gold futures settled 0.3% higher at USD 1,923.00.

“We are seeing some buying interest at these levels, but the buying interest is being limited because the charts remain bearish,” said Jim Wyckoff, senior market analyst at Kitco.

“The recent rhetoric coming from Fed officials has kind of leaned hawkish. Treasury yields have been rising. That’s bearish for the metals … path of least resistance for prices is sideways to lower.”

Helping gold, the dollar index slipped 0.1%. However, benchmark US 10-year Treasury yields extended a rise to 4.3439%, the highest level since October and lessening the appeal of non-yielding bullion.

Gold prices dropped to their lowest since mid-March at USD 1,883.70 last week, as buoyant economic data raised bets for higher-for-longer US interest rates.

Investors’ focus this week will be on Fed Chair Jerome Powell’s speech on Friday, as central bankers from around the world assemble in Jackson Hole for their annual conference.

Gold is highly sensitive to rising US interest rates, as these increase the opportunity cost of holding it.

Meanwhile, receding fears of a US slowdown, surging bond yields, and the robust performance of equities have gradually eroded the appeal of exchange-traded funds (ETF) backed by traditional safe-haven gold.

“With bond yields, which are typically negatively correlated to the gold prices, expected to be pressured higher, and the World Gold Council calling for weaker than normal seasonal demand from India and China, we think ETF selling and lower gold prices may continue near-term,” analysts at Bank of America said in a note.

Spot silver rose 2.5% to USD 23.27 per ounce and platinum was up 0.1% to USD 910.65. Palladium dropped 1.4% to USD 1,238.32.

(Reporting by Harshit Verma and Brijesh Patel in Bengaluru; Editing by Kirsten Donovan, Sandra Maler, and Krishna Chandra Eluri)

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