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Morning News 03 March 2015

South Africa

South African stocks slid the most in 6 weeks on Monday, weighed down by commodity and energy companies on speculation that slower economic growth in China will dim the outlook for raw materials. Additionally, the KAGISO purchasing managers index fell to 47.6 in February versus an estimate of 51.5, signaling a contraction in factory output. In response, the All Share Index fell 0.7%, the biggest 1-day decline since mid-January. The Resources Index slipped 1.9%, as Sasol dropped 2.3%, while BHP Billiton and Anglo American Plc lost 2% and 1.9% respectively.

Commodities

Gold was steady above $1,200/oz this morning after falling from a 2-week peak of $1223.20 on Monday, as it struggled to push higher with the dollar hovering near an 11-year high. Brent crude oil prices steadied above $60 a barrel in early Asian trading this morning, supported by traders entering the market after prices dropped by 5% in the previous session. This was due to speculation of a nuclear deal with Tehran, which could lift Iran's sanctions and boost its oil exports, adding even more supplies back on the market. Brent crude futures were up $0.66 at $60.20 a barrel.

Europe

European shares ended lower after setting new multi-year highs on Monday, with Greek banks slipping on lingering concerns about the country's debt and energy shares tracking a sharp decline in crude oil. The STOXX Europe 600 Oil and Gas index fell 1.5%, the largest sectorial decliner, with Tullow Oil dropping 7.7% on worries about project delays and its likely ejection from Britain's FTSE 100 index. Overall, the FTSEurofirst 300 index closed 0.2% lower at 1,560.59 points. Across Europe, Germany's DAX ended 0.1% higher, while Britain's FTSE 100 fell 0.1% after both set new highs.

America

Monday saw the NASDAQ close above the 5,000 point mark for the first time since the year 2000 as tech stocks were boosted by M&A activity. Hewlett-Packard said it would buy Wi-Fi gear maker Aruba Networks for about $2.7 billion, the biggest deal for the world’s No. 2 PC maker since 2011. In addition, the S&P 500 and Dow indexes also hit record highs after economic data pointed to a slowly accelerating economy. The Dow Jones rose 0.86%, while the S&P 500 and NASDAQ added 0.86% and 0.9% respectively, with about 6.43 billion shares changing hands on U.S. exchanges.

Asia

Japan's Nikkei fell in choppy trade this morning as investors took profits from the recent gains, but losses were limited as sentiment was supported by strong performances in the U.S. The Nikkei fell 0.3% to 18,775.73 points by mid-morning, but remained near 15-year highs, while the Nikkei futures dropped for the first time in 14 days. Sharp Corp tumbled as much as 9.8% on news that it is planning to seek aid from its main lenders, as it expects losses to mount this year. Exporters were mixed, with Toyota Motor down 0.6%, while Honda Motor rose 0.4%.

Currencies

South Africa’s rand weakened against the dollar on Monday, in line with other emerging-market currencies, after the greenback strengthened on growing prospects of a rise in US interest rates. Near the end of the session, the rand was trading 0.63% weaker at 11.7280/$, extending the previous week’s losses triggered by poor trader numbers. With the domestic data calendar light for most of the week, attention will be on offshore data releases, with the closely watched U.S. non-farm payrolls figures expected on Friday.

 

Happy Trading…

 

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