Stock markets review, July 24

ASIA

Mainland Chinese stocks fell Wednesday after a gauge of the country’s  manufacturingsector dropped to a 11-month low, while Japanese shares fell on a firmer yen and a pullback in the Standard & Poor’s 500 Index.

 

The Shanghai Composite  fell 0.5% as investors digested preliminary data released by HSBC, showing China’s manufacturing Purchasing Managers’ Index slid to 47.7 in July from a final reading of 48.2 in June. Hong Kong’s Hang Seng Index was flat in choppy afternoon trade.

 

Shares of China Minsheng Banking Corp.  slid 2%, Jiangxi Copper Co. dropped 1.4% and Poly Real Estate Group Co.  skidded 3.1% in Shanghai.

 

Resource- and financial-sector shares also pulled back in Hong Kong after strong recent gains, with China Shenhua Energy Co.  losing 1.7% and PetroChina Co.  dropping 2.3%, while Bank of Communications Co.   gave up 0.8%.

 

Meanwhile, Japan’s Nikkei Stock Average  lost 0.3% after a two-day advance, and Taiwan’s Taiex  dropped 0.2%, while Australia’sS&P/ASX 200 and South Korea’s Kospi added 0.4% each.

 

India’s Sensex  dropped 1.3% a day after the Reserve Bank of India further tightened liquidity in the banking system as part of its efforts to support the rupee. Banks led the drop, with ICICI Bank Ltd.   sliding 4% and State Bank of India  shedding 3.5%.

 

Shares of several technology firms defied the weak tone in regional equity markets to rise, however, after Apple Inc. reported better-than-expected sales despite suffering a steep decline in quarterly profits.

 

Among Apple suppliers, shares of Rohm Co.  gained 5.5%, and Taiyo Yuden Co.  rose 1.5% in Tokyo, LG Display Co.  added 2.4% in Seoul, and Hon Hai Precision Industry Co.   climbed 1.4% in Taipei.

 

KDDI Corp. , which offers iPhone service plans to its customers in Japan, advanced 1.7% in Tokyo trade. Apple’s rival Samsung Electronics Co.  gained 0.6% in Seoul.

 

EUROPE

European stocks rose to an almost eight-week high as data signaled Germany is leading a revival in euro-area manufacturing and companies posted results that exceeded estimates.

 

The Stoxx Europe 600 Index added 0.6% to 301.1 in London, the highest close since May 30. The benchmark pared earlier gains of as much as 1%.

 

National benchmark indexes climbed in all 18 western European markets today, except Greece:

 

Preliminary data today showed euro-area manufacturing is expanding this month for the first time since July 2011. A manufacturing index based on a survey of purchasing managers increased to 50.1 from 48.8 in June, Markit Economics said. Economists had predicted 49.1. A reading of 50 is the dividing line between expansion and contraction.

 

In Germany, manufacturing unexpectedly expanded in July and services growth accelerated.

 

A gauge of travel and leisure companies posted the best performance on the Stoxx 600.

 

EasyJet advanced 3.7%. Europe’s second-largest discount airline said third-quarter sales rose 11% and that full-year earnings should beat analyst estimates as it adds customers on routes where network carriers are withdrawing.

 

Ryanair Holdings Plc, which posts quarterly results next week, rose 4.8%.

 

Syngenta, the biggest maker of crop chemicals, fell 4%, its largest decline since September 2011. Adjusted earnings of $15.92 a share in the first half missed the average analyst projection for $17.15, as cold weather across Germany and the U.S. hurt demand for its fungicides.

 

USA

U.S. stocks fell, after the Standard & Poor’s 500 Index approached the 1,700 level, as investors weighed global manufacturing data and earnings reports from Caterpillar Inc. and Apple Inc.

 

The S&P 500 (SPX) slid 0.4% to 1,686.27, after earlier climbing to within 2 points of 1,700.  The Dow Jones Industrial Average lost 41.42 points, or 0.3%, to 15,526.32, retreating from a record close yesterday.

 

The Fed has said economic data will determine the timing and pace of any reduction in its $85 billion in monthly asset purchases. A report today showed sales of new U.S. homes rose more than forecast in June to the highest level in five years.

 

Separate data from London-based Markit Economics showed manufacturing indexes based on surveys of purchasing managers rose in the U.S. and Germany this month, while China’s manufacturing contracted more than economists estimated.

 

Investors have turned to corporate earnings, with some 48 members of the S&P 500 reporting today, for additional clues about the health of the U.S. economy. Of the 169 companies in the benchmark gauge that have posted quarterly results so far, 72% have exceeded analysts’ profit estimates and 56% have topped sales projections, data show.

 

Caterpillar slipped 2.3% after cutting its forecast. Broadcom Corp. sank 14% after predicting revenue that trailed estimates. Utility shares and homebuilders tumbled amid rising interest rates. Apple advanced 5.8% after profit and sales topped forecasts. Ford Motor Co. added 2.3% after raising its full-year earnings target.

 

 

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