Asian News

[Ichiro]

25feb-Dow Average Has Worst Weekly Drop Since August; Financials Fall

By Michael Patterson and Eric Martin

Feb. 24 (Bloomberg) -- The Dow Jones Industrial Average had its biggest weekly slide since August as rising consumer prices reduced the odds of an interest rate cut and concern mounted that mortgage defaults may reduce profit growth at banks.

Countrywide Financial Corp., Lehman Brothers Holdings Inc. and Bear Stearns Cos. pushed a gauge of financial shares in the Standard & Poor's 500 Index to its biggest decline in 12 weeks. Hewlett-Packard Co. helped drag down the Dow average from a record after the world's largest personal-computer maker said price cuts hurt profit margins.

The government's latest inflation report reinforced comments last week by Federal Reserve Chairman Ben S. Bernanke that his primary concern is fighting inflation. A rise in loan delinquencies among riskier ``subprime'' borrowers may reduce earnings at financial companies, which account for 22 percent of the S&P 500 index's value.

``The subprime issue has been something a lot of people have been concerned about, but investors for a while were just ignoring it,'' said Edward Hemmelgarn, who oversees about $400 million as president of Shaker Investments Inc. in Cleveland. ``It tends to create a cascading effect. The more people start to default, the more investors become risk-averse.''

In a holiday-shortened week, the Dow industrials dropped 0.9 percent to 12,647.48, the biggest weekly decline since the period ended Aug. 11. The index reached a record 12,786.64 on Feb. 20.

The Standard & Poor's 500 Index slipped 0.3 percent to 1451.19.

The Nasdaq Composite Index gained 0.8 percent to 2515.10 after mergers lifted shares XM Satellite Radio Holdings Inc. and Whole Foods Market Inc.

Iran Concerns

Investors were also chilled by reports that Iran defied a United Nations Security Council demand to halt its atomic work. Stocks extended their declines on Feb. 22 as traders speculated the U.S. might raise its terror alert. The U.S. Department of Homeland Security said there has been no change in the threat level.

for info:

http://www.bloomberg.com/apps/news?pid=20601087&sid=ar8OR2rq2_8Q&refer=worldwide

 

[Ichiro]

25feb-Asian Stocks Rise for Sixth Week; Nippon Steel, Posco Advance

By Chen Shiyin

Feb. 24 (Bloomberg) -- Asian stocks advanced for a sixth week, lifting a regional index to a record high. Nippon Steel and Posco rose on speculation that there will be more takeovers in the steel industry.

``M&A will be a long-lasting investment theme, and steelmakers are likely targets because of the industry's reorganization worldwide,'' said Hideo Arimura, who helps manage $16 billion at Dai-Ichi Kangyo Asset Management Co. in Tokyo. ``They have room to increase dividend payouts as well.''

E*Trade Australia Ltd. and Malaysia Oxygen Bhd. gained after receiving separate takeover offers. Materials stocks rose as Australia's Zinifex Ltd. offered to buy Wolfden Resources Inc., a Canadian mining company, and as metal prices gained.

The Morgan Stanley Capital International Asia-Pacific Index added 0.8 percent to 148.01 this week, adding to a five-week, 5.9 percent rally. A measure of steelmakers and materials producers posted the biggest advance among the gauge's 10 industry groups.

Japan's Topix index jumped 2.3 percent to the highest since November 1991, while the Nikkei 225 Stock Average added 1.8 percent to 18,188.42.

Mitsubishi Estate Co. gained after Bank of Japan Governor Toshihiko Fukui said interest rates will stay low, holding down borrowing costs, and Mori Building Co., the nation's largest developer by assets, said the supply of office space will fall this year and next.

Indexes gained around the region, except in New Zealand, Indonesia and India. Benchmarks in South Korea, Australia and Singapore rose to records during the week. Markets in China and Taiwan were closed all week for the Lunar New Year holiday.

Steelmakers Advance

Japan's Nippon Steel, the world's second-largest maker of the alloy, rose 11 percent this week after the company said in a Feb. 19 filing to the Tokyo Stock Exchange that it raised its stake in Nakayama Steel Works Ltd. to 8.7 percent from 6.6 percent.

Steelmaker stocks climbed last year partly on speculation Mittal Steel Co.'s takeover of Arcelor SA, which created the world's largest maker of the alloy, would accelerate reorganization in the industry globally.

Meanwhile, Posco, the world's No. 3 steelmaker, said Feb. 23 that it had won approval from shareholders to ease rules restricting its ability to sell stock, strengthening defenses against any hostile takeover attempt. The shares gained 3.9 percent this week.

for info:
http://www.bloomberg.com/apps/news?pid=20601080&sid=az8T3tgQHIhE&refer=asia

 

[Ichiro]

25feb-Sanyo Faces Accounting Investigation; Shares Tumble (Update6)

By Masaki Kondo and Mariko Yasu

Feb. 23 (Bloomberg) -- Sanyo Electric Co., bailed out last year by Goldman Sachs Group Inc. and two Japanese banks, said regulators are investigating whether it failed to fully disclose losses. The stock plunged 21 percent.

``We are cooperating with the investigation'' by the Securities and Exchange Surveillance Commission, Sanyo said in a statement today. The maker of batteries and mobile phones understated losses at seven subsidiaries for the year ended March 2004, the Asahi newspaper reported earlier today, citing a person it didn't identify.

The probe may hamper efforts by Goldman, Daiwa Securities SMBC Co. and Sumitomo Mitsui Financial Group Inc. to revive Osaka-based Sanyo, which is projecting a third year of losses. The company plans to sell its chip operations and cut jobs to focus on its rechargeable battery unit, the world's largest.

``The company lacks management competence,'' said Tomokatsu Mori, who helps oversee $7.4 billion at Fukoku Capital Management Inc. in Tokyo. ``Profits the company made by selling batteries are being eroded by unprofitable businesses so it's unlikely that Sanyo will post improved earnings.''

Goldman, the world's most profitable securities firm, Daiwa and Sumitomo Mitsui invested 300 billion yen ($2.5 billion) in Sanyo in January 2006 in return for management control.

New York-based Goldman and Daiwa SMBC, each bought 125 billion yen of preferred stock that can be converted into a 24.5 percent stake in the company and sold to outside investors without Sanyo's consent starting March 14.

``We are committed to supporting the company for the long term,'' said Sumiko Iwadate, Goldman's spokeswoman in Tokyo. Daishu Nagata, a spokesman for Daiwa SMBC, an investment-banking venture between Sumitomo Mitsui and Daiwa Securities Group Inc., also affirmed his company's support for Sanyo.

Share Tumble

Sanyo stock fell 48 yen to 181 at the close in Tokyo. The cost of protecting the company's debt against default doubled compared with yesterday as perceptions of its creditworthiness deteriorated, according to BNP Paribas. Five-year credit-default swaps based on 1 billion yen of Sanyo bonds rose to 16.8 million yen from 8 million yen yesterday, according to BNP Paribas.

for info:

http://www.bloomberg.com/apps/news?pid=20601101&sid=a6I54hf83IVw&refer=japan

 

[Ichiro]

25feb-Economics 101 Is of Little Help to BOJ This Week: William Pesek

By William Pesek

Feb. 20 (Bloomberg) -- The will-they-or-won't-they? debate surrounding the Bank of Japan's meeting this week misses the point. The real issue is whether Japan finds itself in a trap.

There's a better than 50 percent chance the BOJ will boost its key overnight lending rate from 0.25 percent to 0.50 percent tomorrow. The economy's 4.8 percent annual growth rate in the last three months of 2006, up from 0.3 percent in the previous quarter, gives Governor Toshihiko Fukui political cover to act.

If I were Fukui, I would just do it -- end the two-day meeting beginning today with an interest-rate increase. It would take pressure off the BOJ. It would take some air out of so- called yen carry trades, in which investors borrow in yen for next to nothing and buy higher-yielding assets in other markets.

In the long run, though, the BOJ's options will probably become more and more limited. The reason: Japan finds itself in a trap of sorts.

When the word ``trap'' was applied to Japan in recent years, the reference was to liquidity. The idea, which was explored in depth by economists such as Princeton University's Paul Krugman, was that Japan's credit system was malfunctioning even with rates at zero. No matter how many yen the BOJ printed, banks weren't lending and companies weren't borrowing.

The BOJ is confident enough that those days are over, so it ended its five-year experiment with ``quantitative easing'' in March 2006. Four months later, the central bank raised rates for the first time since August 2000.

Where's the Inflation?

Since then, nothing. In January, the BOJ bowed to political pressure not to boost rates. And now, it's facing another roadblock in its desire to return some normalcy to monetary policy: a conspicuous lack of inflation pressure.

At first glance, the most recent gross domestic product data seem to back Fukui's desire for higher borrowing costs. Consumer spending rose 1.1 percent, after dropping at the same rate in the previous period. Business investment surged 2.2 percent, up from 0.8 percent. Assuming they won't be revised lower, the figures suggest that Japan's longest recovery since World War II is broadening.

That is, until you look at inflation, which seems to be slowing. Core consumer prices, which exclude fresh food, rose a mere 0.1 percent in December because of cheaper oil. The drop in fuel costs may push core prices to zero or make them fall in coming months. It's also worth noting that even after the fourth- quarter rebound in consumption, spending over the second half of 2006 was little changed.

BOJ's Bind

The BOJ is in quite a bind. Fukui has a point when he says it's important to normalize borrowing costs; no developed nation should ever offer zero interest rates, never mind a Group of Seven one. That argument isn't working with the government, though. Politicians say Japan still needs ultra-low rates.

Hence the BOJ's effort to highlight another reason to boost the cost of money: the risk of runaway inflation. The argument is that with deflation ending, Japan could experience an uncontrollable surge in prices, like a beach ball held underwater suddenly shooting higher. It isn't happening, even though the credit system is on the mend. Japan has moved from a liquidity trap to an economic trap.

On Feb. 1, Fukui said rising corporate profits ``are expected to filter to households steadily through various routes.'' Yet a day earlier, data showed monthly wages, including overtime and bonuses, fell 0.6 percent in December from a year earlier.

What gives? Globalization. The entrance of a few billion low-wage workers in China, India, the former Soviet states and elsewhere is affecting corporate decisions everywhere. In the past, one could see a cause and effect when Japanese companies enjoyed rising profits -- wages and bonuses went up. Things are no longer that simple.

Labor Arbitrage

It's all part of the global labor arbitrage keeping in check the salaries of workers in developed nations, increasing their work hours and shifting benefit costs from employers to employees. In the past, Japan could insulate its economy from global labor dynamics. Not anymore.

There are other forces holding back wages. Concerns about the long-term viability of the national pension system are slowing the process of morphing Japan's aggressive savers into spenders. The phasing out of lifetime employment is having a similar effect. Memories of Japan's 15-year funk may be weighing on consumer sentiment.

for info:

http://www.bloomberg.com/apps/news?pid=20601039&sid=a5HNGLTT2txM&refer=columnist_pesek

 

[Ichiro]

25feb-BUBBLES BREWING IN SHANGHAI,
TOKYO, AND LONDON
by Gary Dorsch
Editor, Global Money Trends Magazine
February 22, 2007

“There is a bubble growing. Investors should be concerned about the risks,” said Cheng Siwei, vice-chairman of China’s National People’s Congress in a January 31st interview with the Financial Times. “But in a bull market, people will invest relatively irrationally. Every investor thinks they can win. But many will end up losing. But that is their risk and their choice,” Cheng warned.

In what might develop into the third biggest stock market bubble in history, ranked alongside Japan’s Nikkei-225 of 1986-89, and the Nasdaq’s 1999-2000 bull run, the Shanghai Composite “A” share Index, restricted mainly to Chinese nationals, has posted a 140% gain over the past 12-months, after soaring 46% in the fourth-quarter of 2006 alone. And without deliberate market intervention, the A-share market could inflate into a Nasdaq-like bubble.

How Beijing decides to deal with the Shanghai bubble, can have a great impact on the outlook for the Chinese economy, global commodity markets, and exporters in the region from Australia, Hong Kong, Japan, and Korea. Will Beijing try to prick the bubble and set-off a steep correction, or carefully calibrate a series of tightening measures to take some steam out of the market and simply flatten it out?

Sometimes, markets can boomerang on central banks and torpedo the most carefully designed strategies. Therefore, jawboning is usually the first act of official intervention in the market place, because it’s cost free and doesn’t change underlying market conditions. Siwei’s remarks did trigger a 15% pullback from January’s peak, as traders locked in profits from sky-high valuations, figuring that official warnings might turn into concrete steps to cool down the market.


for info:

http://www.[[financialsense.com/fsu/editorials/dorsch/2007/0222.html

 

[Ichiro]

25feb-NEW HIGHS BY THE SCORE
by David Shvartsman
Finance Trends Matter
February 23, 2007

If you were watching the markets this week and last, you might have noticed a definite theme unfolding, even from a distance. Simply put, the number of new highs being set in financial markets across the board is almost staggering.

We saw new, synchronized highs in the Dow Transports, Industrials, and Utilities averages last week, prompting some to warn of danger ahead.

We have reports of new highs in margin debt, with a record $285.6 billion set in January on the New York Stock Exchange. Margin debt increased 24.2 percent in 2006, while the Dow gained 16.3 percent, according to the Sacbee.com article.

The Nasdaq reached a six-year high Thursday, helped along by a rally in chip stocks. It marked the Nasdaq Composite Index's highest close since February of 2001.

Looking across the globe, we witnessed new highs in Australian share markets, with the ASX 200 and the All Ordinaries index both ending the week at new highs.

The Nikkei closed at a seven-year high, finishing over the 18,000 mark for the first time since 2000.

for info:

http://www.tsptalk.com/mb/newreply.php?do=newreply&noquote=1&p=79207

 

[Ichiro]

26feb-European stocks -- Factors to watch on Feb 26
Mon Feb 26, 2007 1:50am ET20

By Marie Maitre

PARIS, Feb 26 (Reuters) - European shares geared up for a mildly higher opening on Monday, propped by fresh takeover activity, but rising tensions over Iran's nuclear programme lifted the euro and oil to highs last seen several weeks ago.

Financials will likely be under the spotlight. A $32 billion buyout offer for U.S. power company TXU from Texas Pacific Group (TPG.UL: Quote, Profile , Research) and Kohlberg Kravis Roberts & Co. (KKR.UL: Quote, Profile , Research) was expected to be confirmed on Monday in what would be the largest private equity deal ever.

In Europe, The Times reported that private equity investment firm 3i Group (III.L: Quote, Profile , Research) was hoping to buy British estate agency Foxtons in a sale that could be worth 400 million pounds ($782.3 million), and French reinsurer Scor (SCOR.PA: Quote, Profile , Research) said it would launch a public offer for all outstanding shares in Converium (CHRN.S: Quote, Profile , Research), after earlier securing a third of the Swiss group.

Elsewhere, DaimlerChrysler AG (DCXGn.DE: Quote, Profile , Research) is thinking about taking a minority stake in General Motors Corp. (GM.N: Quote, Profile , Research) as payment for Chrysler if a deal between the two automakers takes place, the Financial Times said on Monday.

The earnings season continues in a relatively subdued vein on Monday, with results from Spanish groups Gas Natural (GAS.MC: Quote, Profile , Research) and Grupo Ferrovial (FER.MC: Quote, Profile , Research), Dutch mail company TNT (TNT.AS: Quote, Profile , Research) and British insurer Old Mutual (OML.L: Quote, Profile , Research).

But overall market sentiment remained capped by Iran's nuclear programme. Western powers meet in London on Monday to discuss tightening U.N. sanctions on Iran amid a flurry of tough and sometimes colourful talk between Washington and Tehran over the Islamic Republic's nuclear programme.

for info:

http://yahoo.reuters.com/news/artic...2-26_06-50-20_L26616059&type=comktNews&rpc=44

 

[Ichiro]

26feb-UPDATE 1-BOJ Jan rate dissenters worried about overheating
Mon Feb 26, 2007 2:22am ET30

TOKYO, Feb 26 (Reuters) - The three members of the Bank of Japan's nine-member board who proposed raising interest rates in January said holding rates steady could excessively stimulate the economy, minutes of the central bank's Jan. 17-18 meeting showed on Monday.

The minutes showed Atsushi Mizuno, Miyako Suda and Tadao Noda were on the losing end of a 6-3 vote to keep the overnight call rate target unchanged at 0.25 percent.

It was the closest vote in more than three years.

Last week the board voted 8-1 to raise the rate to 0.5 percent as more members became convinced that economic and price growth would remain in a positive trend.

Mizuno said he feared that if the central bank did not raise rates, financial markets could misinterpret the move to mean the bank tolerated a weak yen.

for info:

http://yahoo.reuters.com/news/artic...-02-26_07-22-20_T218482&type=comktNews&rpc=44

 

[Ichiro]

26feb- AP
Slower Economic Growth Is Predicted
Monday February 26, 8:03 am ET
By Martin Crutsinger, AP Economics Writer
Forecasters Say the Economy Will Grow at the Slowest Pace in 5 Years in 2007

WASHINGTON (AP) -- Restrained by a worse-than-expected slump in housing, the economy will grow at the slowest pace in five years in 2007, leading economic forecasters say. They predict consumers will get a break on inflation from falling energy prices.

The survey of 47 top forecasters, released Monday by the National Association for Business Economics, found a greater expected impact from the ailing housing market this year than did the previous forecast in November. Stronger consumer spending will help offset the housing drag, according to the survey.

The panel predicted that the overall economy will grow by 2.7 percent this year. It would be slowest annual increase in the gross domestic product since a 1.6 percent rise in 2002, when the economy was pulling out of the last recession. In 2006, the GDP rose by 3.4 percent.

GDP measures the value of all goods and services produced in the United States. It is the broadest gauge of the country's economic health.

NABE's November forecast put GDP growth this year at 2.5 percent.

The slight upward revision occurred even though the forecasters now believe housing construction will plunge by 14.9 percent this year. That would be nearly three times bigger than the 5.5 percent fall in residential construction they had projected in the earlier survey.

Construction spending dropped by 4.2 percent for all of 2006. That decline was a chief factor in the economy's sluggish growth in the second half of last year. Thousands of construction workers lost their jobs and home builders struggled with slumping sales as the five-year housing boom ended abruptly.

But the economic forecasters see a cushion to the sharp drop in housing: stronger than previously expected consumer spending. This measure will grow by 3.2 percent in 2007, the same as last year, the panel said.

for info:

http://biz.yahoo.com/ap/070226/economic_outlook.html?.v=4

 

[Ichiro]

26feb- AP-Dollar Falls Against Yen, Euro in Asia
Monday February 26, 6:08 am ET

TOKYO (AP) -- The dollar dipped against the euro in Asia Monday to its lowest level in almost two months, and it also fell against the yen as market sentiments turned sour toward the dollar.

The euro touched $1.3199, its strongest since $1.3291 Jan. 3, mainly on speculative trading. The euro was trading at $1.3180 midafternoon, up from $1.3162.


The dollar also fell against the yen to 120.98 yen from 121.04 yen late Friday in New York.

Weighing on the dollar were renewed concerns about tensions over Iran's nuclear program, expectations for a sharp downward revision in fourth-quarter U.S. economic growth and falling long-term U.S. interest rates, said Hideaki Inoue, chief foreign-exchange manager at Mitsubishi UFJ Trust and Banking.

info:
http://biz.yahoo.com/ap/070226/dollar.html?.v=2

 

[Ichiro]

26feb- AP-Euro Relatively Steady Against Dollar
Monday February 26, 6:17 am ET

German Consumer Confidence, Fears About Iran Keep Euro Relatively Steady Against Dollar

FRANKFURT, Germany (AP) -- The euro was nearly unchanged against the dollar on Monday as German consumer sentiment fell for a second straight month and worries about Iran's nuclear ambitions kept currencies on edge.


The 13-nation euro bought US$1.3163 in morning European trading, nominally up from US$1.3162 in New York late Friday after the GfK research group reported that German consumer confidence in March dipped again.

The Nuremburg-based research group said its forward-looking consumer climate indicator fell to 4.4 points, down from a revised reading of 4.9 points in February and well below 8.7 points in January, a decrease blamed on the 3 percent rise in Germany's value-added tax to 19 percent.

The British pound fell to US$1.9628 from US$1.9637 and the dollar also moved lower against the Japanese currency, dropping to 120.78 yen from 121.04 yen.

David Jones, chief markets analyst at CMC Markets in London, said the declines were tied to uncertainty over Iran's nuclear program and what type of response could be coming from the United States.

info:
http://biz.yahoo.com/ap/070226/euro_dollar.html?.v=2

 

[Ichiro]

26feb-Stock Futures Jump on TXU Takeover Deal
Monday February 26, 8:19 am ET

By The Associated Press
Stock Futures Climb After TXU Agrees to Be Bought by a Consortium for $45 Billion

U.S. stock futures advanced on Monday with a takeover of utility giant TXU stirring up consolidation hopes.

S&P 500 futures rose 4.4, to 1458.20 and Nasdaq 100 futures rose 7.5, to 1852.50. Dow industrial futures improved 43, to 12707.


Last week, the Dow industrials slipped 0.9 percent and the S&P 500 gave up 0.3 percent. The Nasdaq Composite closed up by 0.8 percent.

Crude oil futures rose 38 cents to $61.52 a barrel as Iran, criticized for its nuclear research program, test fired its first rocket into space, according to the country's state television.

Gold futures rose $1.20 to $687.90 an ounce.

Not much is on the U.S. economic calendar except a speech from Federal Reserve member Susan Bies. The dollar lost ground against the yen, while it was steady against the euro.

TXU soared 27 percent in Frankfurt after agreeing to be bought by a consortium led by Kohlberg Kravis & Roberts and Texas Pacific Group for $45 billion.

Company management and Colony Capital have agreed to buy Station Casinos for $8.8 billion, including $3.4 billion in debt.

info:

http://biz.yahoo.com/ap/070226/wall_street.html?.v=2

 

[Ichiro]

26feb- AP-Greenspan Warns of Likely U.S. Recession
Monday February 26, 8:34 am ET
Alan Greenspan Warns That U.S. Economy May Slip Into Recession by End of Year

HONG KONG (AP) -- Former U.S. Federal Reserve Chairman Alan Greenspan warned Monday that the American economy might slip into recession by year's end.

He said the U.S. economy has been expanding since 2001 and that there are signs the current economic cycle is coming to an end.


"When you get this far away from a recession invariably forces build up for the next recession, and indeed we are beginning to see that sign," Greenspan said via satellite link to a business conference in Hong Kong. "For example in the U.S., profit margins ... have begun to stabilize, which is an early sign we are in the later stages of a cycle."

"While, yes, it is possible we can get a recession in the latter months of 2007, most forecasters are not making that judgment and indeed are projecting forward into 2008 ... with some slowdown," he said.

Greenspan said that while it would be "very precarious" to try to forecast that far into the future, he could not rule out the possibility of a recession late this year.

The U.S. economy grew at a surprisingly strong 3.5 percent rate in the fourth quarter of 2006, up from a 2 percent rate in the third quarter. A survey released Monday by the National Association for Business Economics showed that experts predict economic growth of 2.7 percent this year, the slowest rate since a 1.6 percent rise in 2002.

Greenspan also warned that the U.S. budget deficit, which for 2006 fell to $247.7 billion, the lowest in four years, remains a concern.

"The American budget deficit is clearly a very significant concern for all of us that are trying to evaluate both the American economy's immediate future and that of the rest of the world," he said via satellite at the VeryGC Global Business Insights 2007 Conference.

infoLhttp://biz.yahoo.com/ap/070226/hong_kong_us_greenspan.html?.v=4

 

[Ichiro]

27feb-FOREX-Dollar hits two-month low vs euro on Iran jitters
Tue Feb 27, 2007 1:31am ET147
Company Market News

By Naomi Tajitsu

TOKYO, Feb 27 (Reuters) - The dollar touched a two-month low against the euro and slipped against the yen on Tuesday amid growing tensions over Iran's nuclear programme and renewed worries about the U.S. housing market.

U.S. data later in the day could point to a slowing economy and offer reasons for the Federal Reserve to cut interest rates later this year, while investors are keeping an eye on rising defaults among high-risk borrowers in U.S. sub-prime mortgages.

Traders were beginning to shift gear after pummelling the low-yielding yen and turning some of their focus to the U.S. economy and any broader fallout from the sub-prime troubles, as well as geopolitical concerns. "The focus had been on the yen until now, but the market is realising that the dollar isn't doing all that well either," said a trader at a major Japanese trading house.


World powers agreed at a meeting in London on Monday to work on a new U.N. Security Council resolution to apply pressure on Iran over its nuclear programme while remaining committed to seeking a negotiated solution, British officials said.

info:
http://yahoo.reuters.com/news/artic...-02-27_06-30-58_T223036&type=comktNews&rpc=44

 

[Ichiro]

27feb-European stocks -- Factors to watch on Feb 27
Tue Feb 27, 2007 2:01am ET147

LONDON, Feb 27 (Reuters) - European stocks are set for a softer start to Tuesday's session, peeling back from six-year closing highs, amid a flurry of corporate earnings and data releases.

Oil prices will remain in firm focus, with crude holding above $61.50 a barrel as tensions continue over Iran's nuclear ambitions. The stand-off also helped knock the dollar to two-month lows against the euro.

European companies reporting earnings include Eiffage (FOUG.PA: Quote, Profile , Research), Air Liquide (AIRF.PA: Quote, Profile , Research), Vinci (SGEF.PA: Quote, Profile , Research), Henkel (HNKG_p.DE: Quote, Profile , Research), Iberia (IBLA.MC: Quote, Profile , Research), Repsol (REP.MC: Quote, Profile , Research), Red Electrica (REE.MC: Quote, Profile , Research), FCC (FCC.MC: Quote, Profile , Research) and Hays (HAS.L: Quote, Profile , Research).

UK retailer Sports Direct Interational is due to price its initial public offering which is expected to raise around 810 million pounds. Its share ticker will be (SPD.L: Quote, Profile , Research).

On the economic front, U.S. January durable goods orders are due for release at 1330 GMT, followed by U.S. consumer confidence and home sales at 1500 GMT.

China's main stock index, the Shanghai Composite <.SSEC>, plunged more than 8 percent as profit-taking by local funds snowballed before a parliament session beginning next week. Turnover was massive at 115.7 billion yuan ($14.9 billion), a multi-year record.

info:

http://yahoo.reuters.com/news/artic...2-27_07-01-06_L27729685&type=comktNews&rpc=44

 

[Ichiro]

27feb- Daily FX-US Dollar Weakens as Prospects for a Rate Hike Diminishes
Monday February 26, 4:18 pm ET

By Kathy Lien, Chief Strategist strategist@dailyfx.com



· US Dollar Weakens as Prospects for a Rate Hike Diminishes


· Malta’s Euro Application and Hawkish ECB Comments Helped to Boost Euro

· Japanese Yen Extends Rally on Hawkish Comment from Shiozaki



US Dollar - Weakens as Prospects for a Rate Hike Diminishes



Our action packed week begins tomorrow and judging from today’s price action and analyst estimates, traders are not expecting the US releases to be particularly dollar friendly. We start off with the January durable goods orders report tomorrow. Although a drop in Boeing orders is expected to drag total orders lower, even excluding the volatile transportation component, demand for goods made to last for more than three years is expected to drop. Taking a look back at the last three reports on orders for durable goods, the market’s reaction tends to be very volatile because of the underlying information provided by the ex transportation component. However by the end of the day, the headline number left a longer lasting reaction in the EUR/USD. Aside from durable goods, we are also expecting consumer confidence and existing home sales. Higher oil prices over the past few weeks will probably weigh on confidence, which leaves the home sales figures as the wildcard. The Federal Reserve is watching the stability of the housing market very closely and at this point, analysts are expecting an increase in sales of existing homes. Strength in this report could offset any disappointments in the durable goods report. In today’s Financial Times and Wall Street Journal, there are competing headline articles about how the Federal Reserve may have changed their belief that low unemployment induces inflation. Recent comments from Ben Bernanke suggests that unemployment may be able to remain as low as 4.5 percent and still not induce inflation. If this is true, then the Federal Reserve may not be tempted to raise interest rates preemptively. Unless we see a meaningful pickup in the housing market, we believe that the Federal Reserve will continue to stand pat, especially as sub-prime lending market faces bigger risks.


Japanese Yen - Extends Rally on Hawkish Comment from Shiozaki


The Japanese Yen was stronger across the board today thanks to hawkish comments from Cabinet Secretary Shiozaki who said that prices are “picking up.” He also indicated that the improvement in the output gap reported last time was a welcome development. For the first time in 10 years, the output gap rose by 0.6 percent. Now that the Bank of Japan has already raised rates, it is hardly surprising that the market has shrugged off the dissenting votes in favor of a rate hike at the January meeting (rates were left unchanged at the time). Any signs of strength will certainly fuel speculation for further rate hikes by the Bank of Japan. The Japanese Yen could also receive boost from year end repatriation over the next few weeks. Corporate profitability has been exceptionally strong which could lead to sizeable repatriation ahead of the March 31st fiscal year end.

info:
http://biz.yahoo.com/fxcm/070226/1172528295797.html?.v=1

 

[Ichiro]

27feb-European stocks sink to near 4-wk lows, miners fall
Tue Feb 27, 2007 4:33am ET145

By Sophie Hares

LONDON, Feb 27 (Reuters) - European stocks tumbled to their lowest in almost four weeks on Tuesday, dragged lower by heavyweight miners after the main Chinese index took a beating and by banking shares.

Among major movers, Standard Chartered (STAN.L: Quote, Profile , Research) sank following its results, while EADS (EAD.PA: Quote, Profile , Research) gained after its board agreed on a restructuring plan for its Airbus unit.

"We're seeing a little bit of correction, a little bit of profit taking, but it's nothing serious. You've seen some excellent results in the last few days," said Thomas Muehlberger, fund manager at Bayern Invest in Munich.

"A lot of people are concerned about the situation in China. The feeling is we'll have very high volatility in that market."

The FTSEurofirst 300 <.FTEU3> index of leading European shares fell as much as 1.5 percent to 1,529.74 points, its lowest level since Feb. 1.

The move followed a lower Wall Street session as crude oil hovered above $61 a barrel as tensions continued over Iran's nuclear ambitions. The stand-off weighed on investor risk aversion, helping send the yen sharply higher against the dollar and euro.

In China, the Shanghai Composite <.SSEC> fell nearly 9 percent, its biggest drop in a decade, as profit-taking by local funds snowballed ahead of a parliamentary session next week.

info:

http://yahoo.reuters.com/news/artic...2-27_09-33-46_L27214554&type=comktNews&rpc=44

 

[Ichiro]

27feb-Wall Street to open down after China shares plunge
Tue Feb 27, 2007 7:10am ET144

LONDON, Feb 27 (Reuters) - Wall Street is set to open down on Tuesday with investors jittery after shares plunged in China and awaiting key clues about the strength of U.S. consumption from economic data and corporate earnings.

U.S. stocks could be ruffled if funds start to pull money out of emerging market equities after the Shanghai Composite Index <.SSEC> fell nearly nine percent, its steepest decline in a decade.

Another concern for investors will be oil prices, which have knocked Wall Street over the last week and remain above $61 on Tuesday on forecasts for a drop in U.S. fuel stocks and escalating Iran nuclear tensions.

"This should be a warning shot across the bow that if you haven't taken some profits, you might want to do that," said Steve Previs of Jefferies International.

U.S. stock futures suggested the major indexes would all open weaker. At 1140 GMT Dow Jones industrial average futures <DJc1>, S&P 500 futures <SPc1> and Nasdaq futures <NDc1> were down 0.5-0.9 percent.

info:

http://yahoo.reuters.com/news/artic...2-27_12-10-22_L27273437&type=comktNews&rpc=44

 

[Ichiro]

28Feb-FOREX-Yen rises 2 pct vs dollar as carry trade unwinds
Tue Feb 27, 2007 3:01pm ET15


NEW YORK, Feb 27 (Reuters) - The yen extended gains on Tuesday and rose 2 percent against the dollar as investors unwound carry trades amid rising risk aversion.

Against the dollar, the yen rose as much as 2 percent and traded at 118.20 yen <JPY=> ,its biggest jump since December 2005. The yen also rallied against the Australian dollar, New Zealand dollar and Canadian dollar, all popular targets of carry trades by speculators and individual investors in Japan.

info:

http://yahoo.reuters.com/news/artic...2-27_20-01-44_NYH000391&type=comktNews&rpc=44

 

[Ichiro]

28feb-U.S. Stocks Tumble Most Since 2002 on China Plunge, Orders Drop

By Eric Martin

Feb. 27 (Bloomberg) -- U.S. stocks tumbled the most since September 2002 as a plunge in Chinese shares sparked a global selloff and raised concern that investors will dump equities after a four-year bull market.

The declines, compounded by a slide in demand for U.S. business equipment, wiped out the year-to-date gains in the Dow Jones Industrial Average and Standard & Poor's 500 Index. The Nasdaq Composite Index also headed for its steepest drop since July 2002. Only two companies in the S&P 500 rose and every one of the Dow's 30 members retreated, led by Alcoa Inc. and Caterpillar Inc., companies that depend on demand from China.

Europe's Dow Jones Stoxx 600 Index slid 3 percent and emerging markets dropped. Russian shares fell from an all-time high, while Brazil's Bovespa Index sank 7.8 percent. U.S. Treasuries rose on increased demand for debt securities amid the worldwide equity slump and signs of a slowing economy after durable-goods orders fell more than forecast in January.

``Any force that works against global economic expansion is a negative,'' said Liam Dalton, who oversees $1.2 billion as chief executive officer of Axiom Capital Management in New York. ``The big straw on the camel's back is this China issue.''

The S&P 500 retreated 47.05, or 3.3 percent, to 1402.32 as of 3:15 p.m. in New York after earlier losing as much as 4.1 percent. The Dow average sank 409.93, or 3.3 percent, to 12,222.33. It earlier fell as much as 546.2 points, or 4.3 percent. The Nasdaq dropped 90.73, or 3.6 percent, to 2413.79.

Chinese Measures

China's government approved a special task force to clamp down on illegal share offerings and investments with borrowed money after indexes climbed to records. The Shanghai and Shenzhen 300 Index dropped 9.2 percent, wiping out $107.8 billion from a stock market that doubled in the past year.

``The Chinese market getting banged for 9 percent last night is only going to have a negative impact for markets across the world,'' said Michael Driscoll, a trader at Bear Stearns & Co. in New York. ``People in the U.S. have been anxiously awaiting a pullback. That may become self-fulfilling at some point.''

info:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aDyabMf.1TcM&refer=worldwide