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Chinese stocks in Hong Kong headed for a seven-week high

27 Nov 2016

Asia:  Asian stock markets were mixed Monday after oil prices slid on unease about this week's meeting of OPEC member to discuss possible output cuts. Chinese stocks in Hong Kong headed for a seven-week high as railway companies advanced. A measure of small-cap companies in Hong Kong rose after regulators announced the start date for a trading program between Hong Kong and Shenzhen. The Hang Seng China Enterprises Index climbed 1.1% at the midday-trading break. CRRC Corp. led gains on the measure after saying its unit is planning an offshore acquisition and a separate unit signed a train contract with the Australian government. Zhuzhou CRRC Times Electric Co. climbed 3.8%. China Communications Construction Co. rose 1%. Tokyo shares fluctuated near the highest level since January as a rally in bank shares wiped out an earlier loss sparked by a strengthening yen. The Topix index was up 0.1%, reversing a drop of as much as 0.5% as bank stocks advanced. The benchmark gauge has rallied for 11 straight day and on Friday closed at the highest level since the BoJ introduced negative interest rates. Exporters were among the biggest drags on the gauge Monday as the yen strengthened the most against the dollar in three weeks. Indian stocks fluctuated between gains and losses as lenders offset an advance in energy companies and metal makers. State Bank of India tumbled for a second day and Bank of Baroda was the worst performer on the S&P BSE Bankex Index after the central bank announced steps to drain cash from the financial system.

U.S Equities:   For the first time since that 1999, the four major benchmark indexes hit all-time highs, thanks to an ongoing post-election rally that has lasted for three weeks and lifted almost everything from banks to industrials to small-cap stocks. Investors kept piling into equities for the week, with the amount of money deposited to exchange traded funds since the Nov. 8 vote accounting for almost 40 % of this year’s total. About $1 trillion has been added to equity values since Donald Trump’s victory, driven by speculation that his plans to cut taxes and boost fiscal spending will accelerate a rebound in corporate profits. Companies that rely more on domestic sales have led the charge higher, with the Russell 2000 Index of small-cap shares rising 15 days in a row, the longest since 1996. The S&P 500 Index ended the holiday-shortened week up 1.4%, while the Dow advanced 1.5%. The Nasdaq Composite Index rose 1.5% and the Russell 2000 added 2.4% to top off a 15-day, 16% rally. With equities booming, investors are now showing some fear of missing out on the stock market action. They added more than $3 billion to U.S. equity ETFs during the week, bringing the flurry of inflows to more than $40 billion over the past three weeks. At the same time, demand for protection against losses is collapsing. The CBOE Volatility Index slipped for a third-week, extending its drop to 44% from its peak prior to the election. Ten of 11 sectors of the S&P 500 rose. Energy companies fell with the price of oil. The climb in utilities on Friday reflects investor desire for steady dividends. Telephone companies, which are also big dividend payers, rose, too.

Commodities: Zinc is heading for its highest close in more than nine years in London, while lead is set for its strongest finish since 2011, as bullish speculative sentiment leads to a fresh surge in industrial metals.  Oil halted declines near $46 amid skepticism over OPEC’s ability to reach an agreement to cut output and as representatives prepare to meet Monday amid last-minute negotiations over the deal the group aims to formalize Wednesday.
Gold advanced for a second day to trim the biggest monthly decline in a year as the dollar continued to weaken and amid signs that prices have fallen too far, too fast.

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