Euro­pean equities rise, Asia in tur­moil over Sam­sung

Kuwait Times - - BUSINESS -

Euro­pean stock mar­kets held firm yes­ter­day as traders di­gested last week’s volatile per­for­mance and eyed ris­ing eu­ro­zone in­vestor sen­ti­ment, deal­ers said. Lon­don added 0.2 per­cent in value, as in­vestors paused for breath after ster­ling’s Brexit-fu­elled “flash crash” to 31-year dol­lar lows late last week. The weak pound lifts ex­porters. Frank­furt won 0.6 per­cent de­spite on­go­ing con­cerns over trou­bled Deutsche Bank, and Paris added 0.4 per­cent.

Asian in­vestors also trod war­ily in hol­i­day­thinned trade and the dol­lar climbed after last week’s drop on be­low-par US jobs data, while Sam­sung Elec­tron­ics was hit by a re­newed cri­sis over its re­called Galaxy Note 7 smart­phone. “It’s been a slow start to the trad­ing week, as a lack of news flow in Europe and Asia, com­bined with bank hol­i­days in Ja­pan, Canada and the US, hit trad­ing vol­umes and switch at­ten­tions to big events later in the week,” said Oanda an­a­lyst Craig Er­lam.

“As for today, fo­cus will likely re­main on some of the big moves that we saw last week-in­clud­ing the flash crash and sharp de­pre­ci­a­tion in the pound, dol­lar gains, the cor­re­spond­ing drop in gold and the four-month highs in oil. “While moves so far today have been more tame, as we’ve seen so often in the past, the US open can spark mar­kets back to life.”

Trad­ing on Wall Street is ex­pected to be light due to the Colum­bus Day govern­ment hol­i­day. The pound was lodged close to 31-year dol­lar lows after a so-called flash crash in Asia on Fri­day saw it col­lapse, with in­vestors on edge over Bri­tain’s plans to leave the Euro­pean Union.

Bri­tain’s finance min­is­ter Philip Ham­mond down­played the pound’s flash crash, blam­ing tech­ni­cal fac­tors, but Bank of Eng­land Gov­er­nor Mark Car­ney asked the Bank for In­ter­na­tional Set­tle­ments to in­ves­ti­gate. US stocks showed modest losses after a key Septem­ber jobs re­port re­vealed 156,000 po­si­tions added, which was fewer than mar­ket ex­pec­ta­tions for be­tween 170,000-180,000.

An­a­lysts said the fig­ures were un­likely to pre- vent the Fed­eral Re­serve rais­ing in­ter­est rates by year’s end.

Sam­sung in fresh tur­moil

Asian in­vestors trod war­ily in hol­i­day­thinned trade yes­ter­day and the dol­lar climbed after last week’s drop on be­low-par US jobs data, while Sam­sung Elec­tron­ics was hit by a re­newed cri­sis over its trou­bled Galaxy Note 7. The labour de­part­ment said Fri­day that fewer jobs than ex­pected were cre­ated in the world’s top econ­omy in Septem­ber. The news left all three main in­dexes on Wall Street in neg­a­tive ter­ri­tory and sent the dol­lar lower against the yen Fri­day.

Seoul ended up 0.2 per­cent but Sam­sung Elec­tron­ics was bat­tered by re­ports that it had sus­pended pro­duc­tion of its flag­ship Galaxy Note 7 hand­set after dis­trib­u­tors stopped of­fer­ing re­place­ments be­cause of con­tin­ued safety con­cerns. US tele­coms firm AT&T and Ger­man ri­val T-Mo­bile said they had stopped ex­changes of the Note 7 pend­ing probes into re­ports of some re­place­ment hand­sets catch­ing fire.

Sam­sung an­nounced a global re­call of 2.5 mil­lion hand­sets last month after com­plaints that some had ex­ploded ow­ing to a bat­tery prob­lem. Shares fell four per­cent in morn­ing trade be­fore re­cov­er­ing in the af­ter­noon to end down 1.5 per­cent. Mar­kets in Tokyo, Hong Kong and Taipei were closed for pub­lic hol­i­days.

How­ever, an­a­lysts said the fig­ures were un­likely to pre­vent the Fed­eral Re­serve rais­ing in­ter­est rates by year’s end. In af­ter­noon trade yes­ter­day, the dol­lar was at 103.10 yen from 102.93 yen in New York but well down from the 103.87 yen ear­lier Fri­day in Asia.

The pound was stuck at 31-year lows against the dol­lar after a flash crash in Asia Fri­day saw it plunge, with in­vestors on edge over Bri­tain’s plans to leave the Euro­pean Union.

An­a­lysts said it was un­clear if ster­ling’s sud­den plunge was down to a com­puter gen­er­ated sell-off or other rea­sons but Brexit was at the root of it. China set the yuan’s cen­tral par­ity rate weaker than 6.7 to the dol­lar for the first time in six years Monday, the first day of trad­ing after it joined the IMF’s “spe­cial draw­ing rights” re­serve cur­rency bas­ket.

The cur­rency has been de­clin­ing for months in the face of a stronger dol­lar, slow­ing growth at home and cap­i­tal out­flows.

Trump in cri­sis

In share trad­ing, Shang­hai, which was closed last week for a na­tional hol­i­day, ended up 1.5 per­cent, while Syd­ney closed 0.2 per­cent higher. How­ever, Sin­ga­pore and Welling­ton eased, while Bangkok tum­bled three per­cent after of­fi­cials said King Bhu­mi­bol Adulyadej’s health was “not sta­ble” in an up­date that raised fears for the 88year-old.

There are fears his demise could lead to eco­nomic in­sta­bil­ity, es­pe­cially as there is no of­fi­cial dis­cus­sion on how the coun­try will han­dle his pass­ing. Tokyo, Hong Kong and Taipei were closed for pub­lic hol­i­days. —Agen­cies

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