Japanese equities upbeat on US manufacturing data

Friday, February 21, 2014

US markets managed to hold on to early gains yesterday, recovering much of the previous session’s losses as an improving flash manufacturing PMI reading helped calm fears of slowing demand growth, rising to 56.7 from 53.7 the previous month. Both the S&P 500 and DJIA added 0.6% as market participants placed increasing weight on manufacturing and consumer confidence gauges. Investors were enticed back to the market as slight improvements in the Leading index and Bloomberg weekly consumer comfort index placated concerns that demand momentum was coming to an abrupt halt after the string of lower than expected economic data since the start of the year sparked a sell-off in equity markets in late January. Investors have largely ignored the weaker numbers, blaming the polar vortex for a slowdown in activity and have been reassured by encouraging Fed comments.

Japanese stocks followed Wall Street higher as both the Nikkei and TOPIX snapped a four week bear run, adding 2.88% and 2.32% respectively overnight. Asian investors were encouraged by the better than expected US manufacturing reading as investors positioned themselves for further gains on an improving earnings outlook. Chinese equity indices extended declines after yesterday’s release of flash manufacturing PMI indicated factory output slowed for the fourth consecutive month to 48.3 in February from 49.5 the previous month. Both the CSI 300 and Shanghai Composite spent the entire session under pressure, closing 1.01% and 1.17% lower respectively.

Three month LME nickel prices are headed for a third week of gains as market participants speculate that the Indonesian ban on unrefined nickel ore and upbeat US manufacturing data will help tackle the global surplus in nickel stocks. Prices have added 3.33% since the start of the month as they reached a four week high at $14,652 on Wednesday before a bout of profit taking on the weaker Chinese flash manufacturing PMI reading saw the metal tumble 0.87% yesterday, closing at $14,365. Growth in LME warehouse stocks has begun to slow in recent weeks, adding 2.9% ytd compared to an increase of 10.36% during the same period last year.  

 

LME nickel prices are on track for a third week of gains as LME stock growth slows

 LMNIDS03 Comdty LME NICKEL 3 2014 02 21 08 08 44


Events for today

0930

UK

Jan

PSNCR & PSNB

1500

US

Jan

Existing Homes Sales

OE: 

Jan  FTSE 100 Index & Equity (LIFFE) 

OE: 

Mar   Crude WTI (NYMEX)

Economic Market Calendar

Topics: Equities, PMI, LME, Nickel
More from: Kash Kamal