Stocks
Stocks mixed, dollar rises as traders weigh Trump shooting
Asian markets were mixed Monday as investors weigh the impact of the assassination attempt on Donald Trump with data suggesting it has boosted his chances of being re-elected president.
Eyes are also on a key meeting of China’s top leadership in Beijing, with hopes for measures to boost the world’s number two economy, which grew less than expected in the second quarter.
Investors struggled to extend the rally enjoyed on Wall Street, where all three main indexes ended on a positive note despite a forecast-topping read on US wholesale prices.
The figures were not enough to overshadow Thursday’s news that the consumer price index had slowed more than expected in June, which ramped up bets on a Federal Reserve interest rate cut in September.
That came after central bank chief Jerome Powell told lawmakers that inflation did not need to come in at decision-makers’ two percent target for them to begin lowering borrowing costs.
However, investors are keeping a close eye on developments in the United States after Trump was hit with a bullet on Saturday at a rally ahead of the Republican convention this week.
While the odds of him beating President Joe Biden had been rising in recent weeks, they got an extra lift from the shooting.
Observers said a Trump victory could see lower corporate taxes — a boost for companies’ bottom lines — but also an increase in tensions with China with fresh tariffs possible.
Still, Katrina Ell at Moody’s Analytics said: “The assassination attempt might lead to a temporary boost in the polls for Trump, but a lot can change before November.
“Financial markets are expected to soon refocus on the Federal Reserve and the growing likelihood of a rate cut in September.”
The dollar rose Monday, having softened last week owing to the prospect of lower rates, while equity markets were mixed.
Hong Kong, Shanghai, Seoul, Taipei and Jakarta dropped, while Sydney, Singapore, Manila and Wellington rose.
Official data showed the Chinese economy expanded just 4.7 percent in the second quarter, well below the 5.1 percent forecast in a survey by Bloomberg.
Separate data showed retail sales slowed sharply in June as the country’s army of consumers remain cautious.
The readings highlight the tough work leaders face as they grapple with a real estate debt crisis, weakening consumption, an ageing population and trade tensions with Western rivals.
President Xi Jinping and other top leaders are gathered in Beijing to hammer out plans to kickstart growth, though analysts warned there was unlikely to be any major announcement for the short-term.
“A Trump victory would be damaging for China’s economy given manufacturing and exports are powering the recovery,” Moody’s Ell added.
“Trump has indicated a number of significant trade barriers would be imposed on China under his leadership.”
– Key figures around 0230 GMT –
Hong Kong – Hang Seng Index: DOWN 0.9 percent at 18,123.67
Shanghai – Composite: DOWN 0.2 percent at 2,965.55
Tokyo – Nikkei 225: Closed for a holiday
Dollar/yen: UP at 158.04 yen from 157.88 yen on Friday
Euro/dollar: DOWN at $1.0889 from $1.0906
Pound/dollar: DOWN at $1.2966 from $1.2989
Euro/pound: DOWN at 83.95 pence from 83.97 pence
West Texas Intermediate: DOWN 0.5 percent at $81.80 per barrel
Brent North Sea Crude: DOWN 0.5 percent at $84.64 per barrel
New York – Dow: UP 0.6 percent at 40,000.90 (close)
London – FTSE 100: UP 0.4 percent at 8,252.91 (close)
Asian investors trod cautiously Monday as they struggled to build on recent equity gains, with debate swirling around how big an expected US interest rate cut will be this week, while sentiment was being dragged by worries about the Chinese economy.
The yen edged to a new high since December ahead of the Federal Reserve decision on Wednesday and a policy meeting at the Bank of Japan two days later.
Data showing US inflation slowed more than expected last month to its weakest pace since February 2021 has sparked fresh talk that Fed officials will announce a bumper 50-basis-point cut and continue easing into the new year.
However, while bets on such a move have risen, some analysts warned that it could send a signal that decision-makers are worried about the economy, particularly after two readings showing the labour market was softening.
While bank officials have played their cards close to their chest, they have hinted that they are willing to discuss a bigger cut, while former New York Fed chief Bill Dudley said he thought “there’s a strong case for 50”.
Michael Krautzberger at AllianzGI said: “The Fed, like other central bankers, are now focused on economic growth rather than inflation risks and becoming increasingly worried about being behind the curve on policy — cutting rates too late to avert a recession or sharper growth slowdown.
“Therefore, in our view, the risks of larger rate cuts at subsequent meetings this year cannot be discounted, especially if labour market activity deteriorates faster than currently expected and inflation continues to head towards target.”
All three main indexes on Wall Street pushed higher Friday, with the Dow and S&P 500 within a whisker of their record highs.
But Asian investors were unable to extend the rally, with Hong Kong, Singapore and Wellington down but Sydney, Taipei and Manila edging up.
Trade was muted by holidays in Tokyo, Shanghai, Jakarta and Seoul.
On currency markets the yen hit 140.43 per dollar, its strongest level since the end of December, while gold remained at all-time highs after hitting a record $2,586.10 per ounce Friday.
Traders are keeping tabs on developments in China after more weak data on credit, retail sales, industrial production and house prices stoked concerns about the state of the world’s number two economy.
The figures “collectively add to concerns that policy measures announced in recent weeks and months have so far failed to have any measurable impact in lifting economic growth thus far in the third quarter after the weak second quarter performance”, said National Australia Bank’s Ray Attrill.
He added that investors will be keenly watching the government’s upcoming Politburo meeting — the date of which has yet to be set.
In light of the latest batch of disappointing figures, the central bank outlined plans to support the economy, saying it will “make maintaining price stability and pushing for the mild rebound in prices an important consideration for monetary policy and meet reasonable financing demand for consumption in a more targeted way”.
The Fed’s decision is set to be followed by the BoJ on Friday, with most analysts expecting it to hold rates after a surprise hike at the end of July sparked turmoil on markets.
“A consecutive hike would likely be seen as too aggressive, especially given criticism that the BoJ’s hawkish stance contributed to global market turbulence in early August,” said IG analyst Tony Sycamore.
“That said, stronger-than-expected inflation and wage growth in Japan over the past month have given the BoJ confidence in a wage-price cycle that could keep inflation above two percent, paving the way for more policy tightening.”
– Key figures around 0230 GMT –
Hong Kong – Hang Seng Index: DOWN 0.6 percent at 17,271.92
Tokyo – Nikkei 225: Closed for a holiday
Shanghai – Composite: Closed for a holiday
Dollar/yen: DOWN at 140.53 yen from 140.76 yen on Friday
Euro/dollar: UP at $1.1088 from $1.1079
Pound/dollar: UP at $1.3141 from $1.3125
Euro/pound: DOWN at 84.37 pence from 84.40 pence
West Texas Intermediate: UP 0.5 percent at $68.98 per barrel
Brent North Sea Crude: UP 0.4 percent at $71.86 per barrel
New York – Dow: UP 0.7 percent at 41,393.78 (close)
London – FTSE 100: UP 0.4 percent at 8,273.09 (close)
Khan Brothers PP Woven Bags has raised eyebrows after a significant and unexpected surge in its share price, despite the company posting losses and not declaring dividends for the last two fiscal years, including 2022-23. Over a brief period of just 14 trading sessions, from 25 August to 15 September, the company’s stock saw an extraordinary rise of 150%, closing at Tk176.2 on Sunday.
In light of this unusual price movement, the Bangladesh Securities and Exchange Commission (BSEC) has requested the Dhaka Stock Exchange (DSE) to conduct an investigation. The BSEC noted suspicious fluctuations in both the price and trading volume of Khan Brothers’ shares and called for an inquiry to uncover possible causes, including potential market manipulation or insider trading.
The DSE is required to submit a detailed investigation report to the BSEC’s Surveillance Department within 30 working days. Furthermore, the exchange has been directed to alert its AR/Compliance Officer or CEO of any irregular trade activities that may point to violations of securities regulations.
This is not the first time Khan Brothers’ shares have seen a steep rise. Earlier this year, in mid-February, the stock price surged to Tk231 before dipping below the face value of Tk10 by April. On 25 August, the shares traded at Tk78.4, only to climb again and hit Tk176.50 on Sunday, representing a 5.94% increase, or Tk9.9 per share.
Despite the sharp rise, the company reported a loss of Tk20 lakh during the first nine months of the 2023-24 fiscal year. Previously, the DSE issued query notices regarding the stock’s rising price on 10 July and 1 September. The company responded that no undisclosed price-sensitive information existed to explain the surge.
Khan Brothers PP Woven Bags Industries, which went public in 2014, raised Tk20 crore through its listing to fund machinery purchases, building construction, and debt repayment.
Dhaka Stock Market DSE, Bourse on the first working day of the week, 15th September, ended with a mixed performance in Indices and hike in Turnover from the previous working session. This information is known from DSE sources.
668 crore 95 lakh taka shares were traded on this day. 64 crore 43 lakh less tradings were done in DSE today compared to the previous workday, 12th September, Shares worth Tk 733 crores 39 lakh shares were traded last time, Thursday.
The benchmark DSEX lost 14.74 points or 5,726 The Shariah-based index DSES gained 1 point or 1,246 and the blue-chip index DS30 decreased by 15.22 points or 2,085.
Of the issues traded, 169 advanced, 182 declined and 46 remained unchanged.
SK Trims & Industries Limited ranked top gainer on DSE, the share price increased by Tk 1.70 paisa or 10.00 percent. On this day, the share was last traded at Tk 18.70 paisa.
Trust Bank 1st Mutual Fund ranked top loser on the DSE, the unit price dropped by Tk 0.40 paisa or 9.30 percent. On this day, the unit was last traded at Tk 3.90 paisa.
DSE topped on trade is Linde Bangladesh Limited 42 crore 32 lakh takas of company shares have been traded.
A total of 32 companies’ shares were traded in the Block on Dhaka Stock Exchange. A total of 69 lakh 16 thousand 672 shares of the companies were traded. The financial value of which is 37 crore 43 lakh taka.
