Stocks Thrive on Evergrande Lift

Highlights:

• • USA
    The Dow Jones shed a slight 0.02% or 6.26 points, to 35,603.08. The selective S&P 500 increased by 0.30% or 13.59 points, to a record 4,549.78. Meanwhile, the Nasdaq rose by 0.62% or 94.02 points, to 15,215.70. 
  • ASIA
    The Nikkei advanced by 0.34% or 96.27 points, to 28,804.85.
    The Kospi closed with a loss of 0.04% or 1.17 points to 3,006.16.
    The Hang Seng Index closed with a rise of 0.42% or 109.4 points, to close at 26126.93. 
  • EUROPE
    The Stoxx 600 added 0.42%.

Wall street settles mixed, while S&P 500 hits a new record

Wall Street closed mixed on Thursday. The NY stock market began the session with doubts after IBM’s technology did not reach the revenue experts expected. However, the S&P touched a record figure driven by the strong business results delivered by Tesla and other companies.

The Dow Jones shed a slight 0.02% or 6.26 points, to 35,603.08. The selective S&P 500 increased by 0.30% or 13.59 points, to a record 4,549.78. Meanwhile, the Nasdaq rose by 0.62% or 94.02 points, to 15,215.70. 

The re-emergence of risk aversion also fuels concerns about the impact of disruptions in global supply chains on companies’ financial accounts.

Investors are watching the forecasts of companies facing rising costs, labour shortages, and supply difficulties.

The Dow Jones and S&P 500 are close to their all-time highs, prompting the market to be cautious. 

 

Inflation affecting on stock returns

Jobless claims in the US dropped during the week ending October 16. It totalled 290,000 compared to 296,000, recorded the previous week. 

Tesla announced record revenue and earnings in its third quarter of the year on Wednesday. It led the S&P 500 to stand 0.2% above the highs reached last August. 

Jim Paulsen, a representative of the Leuthold Group, stated market movements explained how high inflation is affecting profit margins. Investors are reasonably concerned with reports and the pressure inflation is causing. Still, high inflation seems to push the S&P 500 to the record highs. 

By sectors, non-essential consumer goods companies posted the highest increase, adding 1.38%. Meanwhile, the healthcare sector gained 0.44%, technology increased by 0.41%, and telecommunications advanced by 0.36%.

The energy sector was the biggest loser, sliding by 1.81%. At the same time, financial companies slipped by 0.35%, and raw materials lost 0.23%.

Nike registered the biggest advance among the 30 leading companies listed on the Dow Jones and expanded by 2.28%. The United Health Group followed it with a rise of 1.68%. Meanwhile, IBM plummeted by 9.56%, the biggest drop in the group. Chevron, American Express, and Caterpillar were also among the losers.  

 

The Nikkei rebounded

The Tokyo Stock Exchange rebounded today after concerns were reduced regarding the future of the indebted Chinese real estate developer Evergrande. It happened after the company stated it started to pay coupon bonds.

The Nikkei advanced by 0.34% or 96.27 points, to 28,804.85. Meanwhile, the Topix index added 0.07% or 1.42 points to 2,002.23.

Trading started in the negative territory due to electoral uncertainty just over a week before the general elections on October 31. Analysts predict some declines even if the ruling party wins. The Nikkei started with a selling advantage, and then there was a move to repurchase it. Despite a favourable trend afterwards, the earnings in Tokyo were limited. The market is awaiting the start of the corporate quarterly earnings reporting season.

The precision instruments sector received the biggest gains of the day, followed by electronics and machinery.

Semiconductor and electronics company Screen Holdings registered the biggest gain, surging by 4.98%.

Tokyo Electron added 4.4% and accumulated the third-highest volume of operations of the session. Meanwhile, Lasertec recorded the biggest volume of transactions and climbed by 3.73%. It was followed by Softbank, increasing by 0.54%. 

Automotive manufacturer Toyota closed flat. Technological Sony grew by 1.18%, and Nintendo’s video game developer and distributor yielded a slight 0.07%.

 

The Kospi weakens due to individual selling

The Kospi continued to weaken and closed with a loss of 0.04% or 1.17 points to 3,006.16. The Kosdaq index closed with an increase of 0.14% or 1.37 points to 995.07. 

In the stock market, foreigners and individuals net sold 18.3 billion won and 67.5 billion won, respectively. Institutions net bought 185.2 billion won. 

During midday, the market experienced relief from the news about Evergrande. However, the stock market did not show any clear direction. Wait-and-see sentiment prevailed ahead of the earnings release of prominent Korean and US companies next week. 

The share price of Snap, a social media company that announced less-than-expected earnings, plunged by 21.58%.

The Nikkei was supported by a rise of Samsung Electronics, adding 0.28%. Besides, SK Hynix advanced by 2.28%.

Meanwhile, rechargeable battery stocks, which plunged the day before on news about Tesla’s adoption of lithium iron phosphate battery, posted gains. LG Chem climbed by 1.36%, and Samsung SDI added 1.80%. At the same time, SK Telecom surged by 4.70%. 

 

Technology stocks keep rebounding on Hang Seng

The Hang Seng Index closed with a rise of 0.42% or 109.4 points, to close at 26126.93. Meanwhile, the state-owned Hang Seng China Enterprise Index expanded by 0.9% or 83.28 points, to 9356.85.

Technology stocks kept rebounding. Kuaishou, a video-sharing mobile app developer, surged by more than 5%, and SMIC rallied more than 4%. 

Tech stocks contributed to an increase in the index over the week. The Hang Seng Tech index accumulated a rise of 6% this week. Alibaba registered the biggest increase since April, posting a weekly gain of 7.9%.

Power, copper, aluminium, oil, and coal sectors fell. Yanzhou Coal and PetroChina slumped by more than 3%.

Real estate firms Longfor Group and China Resources Land were top gainers on the index, up 6.3% and 3.9%, respectively. 

 

European shares rally on Evergrande news

European stock markets started the session with advances on Friday. Investors cheered the news coming from the Chinese Evergrande group. 

The Stoxx 600 added 0.42%. 

Tech stocks and personal & household goods posted the biggest gains, each increasing by around 0.7%.

French cosmetics giant L’Oreal saw its shares top the Stoxx with a 6% gain after posting a strong revenue increase on demand for its luxury lines and growth in China. Meanwhile, tissue maker Essity expanded by 5.2% after setting a new target to strengthen sales.