Stock Market News Today 2018/08/20
Atlantia shares sink again on risk of losing Italy concessions
Shares in Atlantia, the parent company behind the operator of the bridge that collapsed in Genoa, have fallen by 9 per cent after the country’s leaders indicated they were planning to revoke Autostrade per L’Italia’s licences.
Matteo Salvini, Italy’s interior minister and leader of the League, on Sunday evening said the government was “going ahead with the withdrawal” of all Autostrade’s concessions after last week’s disaster killed more than 40 people.
“Autostrade should be ashamed of itself. It should open its wallet and rebuild everything and repay everyone,” Mr Salvini said at a League rally in Tuscany.
Autostrade had already made an initial offer of €500m for building work and compensation, a gesture dismissed by Mr Salvini as “a minimum wage offer”.
In morning trading on Monday, Atlantia shares were down 9.1 per cent at €17.57, close to the intraday lows struck last week.
Apple culls thousands of apps from China store
Apple has removed thousands of gambling apps from its China app store, according to official media, which criticised the technology company for inadequately protecting users against illegal apps.
“Gambling apps are illegal and not allowed on the App Store in China. We have already removed many apps and developers for trying to distribute illegal gambling apps on our App Store, and we are vigilant in our efforts to find these and stop them from being on the App Store,” the company said in a statement on Monday.
The statement comes a day after CCTV, China’s state broadcaster, accused Apple of not doing enough to screen gambling and other illegal apps.
“Apple established the rules for allowing apps onto its store, but it did not itself respect them, resulting in a proliferation of fake lottery apps and gambling apps,” CCTV said in a report.
The CCTV report also stated that Apple had taken offline 500 apps with the keyword “lottery” in the app name between July 31 and August 13, as well as removed 4,000 gambling-related apps on August 9. Apple says it routinely removes apps from its store for various reasons.
Chinese stocks rise ahead of US-China trade talks
Asia-Pacific equities had a broadly positive start to the week on Monday ahead of trade talks between the US and China.
A delegation led by China’s vice commerce minister, Wang Shouwen, will conduct two days of talks in Washington starting on Wednesday, the first formal negotiations since Washington imposed tariffs on $50bn of Chinese imports.
Chinese stocks started the week on a positive footing following an announcement from China’s banking regulator over the weekend urging banks to support infrastructure projects and exporters in a bit to boost economic confidence.
The CSI 300 index of Shanghai and Shenzhen-listed stocks was up 0.2 per cent after closing at a near two-year low on Friday as the healthcare sector dragged on the index following the sacking of officials over a vaccine scandal.
The index has fallen 19.7 per cent for the year to date as concerns over the slowing of the Chinese economy and worries over the US-China trade war have weighed on sentiment.
In Hong Kong, the Hang Seng index was 0.7 per cent higher as the technology sector gained 1.8 per cent and telecommunications stocks rose 1.3 per cent. The Hang Seng China Enterprises index of Hong Kong-listed Chinese companies gained 0.3 per cent.
Japan’s Topix was down 0.3 per cent as technology stocks shed 0.3 per cent and industrials dipped 0.2 per cent.
Australia’s S&P/ASX 200 was up 0.1 per cent with the basic materials sector up 0.3 per cent and consumer cyclical stocks gaining 0.3 per cent. Fortescue Metals was down 0.3 per cent after the miner reported a sharp fall in full-year profits as Chinese mills switched to higher-grade iron ores.
On Wall Street on Friday, the S&P 500 ended the week within striking distance of its record high set in January. The index rose 0.3 per cent on the day while the tech-heavy Nasdaq Composite gained 0.1 per cent.
Fortescue profits tumble as China seeks higher-grade iron ore
Fortescue Metals Group reported a sharp fall in full-year profits as Chinese steel mills, the key destination for the company’s product, began favouring higher-grade iron ores.
The Australian mining giant reported net profit after tax of $878m for the 12 months to the end of June, down 58 per cent from a year earlier.
Revenues fell 18 per cent to $6.9bn as the average price the ASX-listed miner received for its iron ore fell to $44 per dry metric tonne, from $53 a wet metric tonne in the year prior, the company said.
“The reduction in average price received is primarily attributable to high steel mill profitability in China which incentivises use of higher iron content ores to maximise production,” Fortescue said in a statement.
Over the past several years China has moved to slash steel production capacity in a bid to modernise outdated industrial sectors and limit environmental damage.
Fortescue chief executive Elizabeth Gaines noted operating costs – per tonne of iron ore mined and moved to port – were down 4 per cent for the year and at a record low of $12.36 per wet metric tonne, thanks to “ongoing productivity and efficiency improvements”.
The company, which shipped 170m tonnes in the fiscal year, reaffirmed its 2019 outlook for shipments of 165m-173m tonnes, and costs of $12-$13 a tonne.
Fortescue shares were up 1.3 per cent in Sydney on Monday while the S&P/ASX 200 index rose 0.2 per cent. But that on-the-day gain still left the company’s stock down about 10 per cent year to date.
Euro zone limping as global trade war escalates
More evidence that euro zone growth has slowed this year is likely to be seen on Thursday, when surveys are expected to show an escalating global trade war is hurting producers.
The currency bloc was a surprise economic star last year, outpacing its peers, but the rate of expansion is steadily slowing and a succession of Reuters polls have said it has already peaked — although a recession is seen as unlikely.
Protectionist policies on trade are likely to tap the brakes significantly on global growth and have already caused turmoil in financial markets.
Manufacturers have been spooked by the escalating trade war between the United States and its trading partners although reports China is to send a delegation to Washington for discussions may allay some of those fears.
Thursday’s composite Purchasing Managers’ Index (PMI) for the euro zone, compiled by IHS Markit, will be the first gauge of the economy’s health in August.
A reading above 50 indicates expansion, and if the 54.3 forecast in a Reuters poll for a composite PMI is realized it will confirm growth remains robust but is far weaker than the decade-high pace witnessed earlier this year.
“European growth momentum is losing steam. (But) We only expect a small setback compared to last month, despite relatively weak European financial markets so far in August,” Nordea economists said.
With growth holding strong and inflation confirmed above the European Central Bank’s target in July, ECB policymakers are unlikely to go back on plans to end its 2.6 trillion euro bond buying program this year.
They are expected to begin raising borrowing costs in the second half of 2019.
Across the Atlantic, where growth has also already peaked, the U.S. Federal Reserve has been tightening policy and is expected to plow ahead with planned interest rate hikes. It is alone among peers in carrying on with a tightening campaign, which has driven the dollar sharply higher.
The Bank of England raised interest rates earlier this month, above financial crisis lows, but signaled it was in no hurry to raise them further.
Trade fears in Britain are focused on what deal it can strike with the European Union before leaving the bloc at the end of March. If no agreement is struck, market watchers expect sterling to fall and growth to slow further.