Asia-Pacific stocks mixed as China's industrial profit growth slows; trading in Hong Kong set to resume

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CNBC 27 June, 2021 - 10:29pm 51 views

What is a black rainstorm?

Listen to radios or check weather. BLACK rainstorm signal. This signal means: Very heavy rain has fallen or is expected to fall generally over Hong Kong, exceeding 70 millimetres in an hour, and is likely to continue. wikipedia.orgHong Kong rainstorm warning signals

SINGAPORE — Stocks in Asia-Pacific were mixed in Monday trade. Meanwhile, official data showed that China's industrial profits for May slowed.

Mainland Chinese stocks were mixed, with the Shanghai composite fractionally lower while the Shenzhen component gained 0.924%.

Data released Sunday by China's National Bureau of Statistics showed profits at China's industrial firms rose 36.4% in May as compared with a year earlier. That was a slowdown from the 57% year-on-year growth posted in April.

Elsewhere, the Nikkei 225 in Japan slipped 0.28% while the Topix index sat below the flatline. South Korea's Kospi dipped 0.1%.

Australia stocks slipped, as the S&P/ASX 200 fell slightly.

MSCI's broadest index of Asia-Pacific shares outside Japan traded 0.11% lower.

Trading in Hong Kong's markets was set to resume at 1:30 p.m. HK/SIN on Monday after an earlier weather warning was lowered.

Hong Kong Exchanges and Clearing announced earlier on Monday that the morning trading sessions of both the securities and derivatives markets, including Stock Connect trading, have been delayed due to a black rainstorm warning.

Black rainstorm signals are issued as a warning of heavy rain that is likely to bring about flooding on the roads, leading to traffic congestion.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 91.866 after a decline earlier this month from above 92.1.

The Japanese yen traded at 110.68 per dollar after last week's weakening from below 110.4 against the greenback. The Australian dollar changed hands at $0.7582 after rising last week from below $0.756.

Oil prices were lower in the morning of Asia trading hours, with international benchmark Brent crude futures down 0.26% to $75.98 per barrel. U.S. crude futures shed 0.19% to $73.91 per barrel.

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Stocks in mainland China hold near 3-week high while Hong Kong halts trading

South China Morning Post 27 June, 2021 - 09:34pm

Hong Kong stocks halted for morning trading on ‘black rainstorm’ warning

South China Morning Post 27 June, 2021 - 08:58pm

ASX dips; Temple & Webster soars amid lockdowns

The Australian Financial Review 27 June, 2021 - 04:35pm

Hong Hong Kong Exchanges and Clearing (HKEX) has confirmed trading in securities and derivatives markets will resume trading at 1.30pm local time after the morning session was cancelled due to a black rainstorm warning.

The exchange said there would be no pre-opening session. For those futures contracts to which the pre-opening session applies, the pre-opening session will begin at 1pm local time before trading resumes.

Oil markets are delicately poised ahead of a bumper meeting between the largest petroleum exporters this week, as prices hit three-year highs on the back of accelerating demand for transport fuel.

A surge in global travel pushed Brent crude oil 0.8 per cent higher to $US76.18 a barrel, while West Texas Intermediate climbed 1 per cent to $US74.05 a barrel, with both benchmarks rising for a fifth straight week and trading at levels not seen since October 2018.

It comes as the Organisation of Petroleum Exporting Countries and its allies (OPEC+) prepares to meet on July 1 to discuss an easing of supply cuts as the oil market heads into a period of heightened demand.

“So far [OPEC] has been able to negate the impact of travel restrictions on demand by co-ordinating a supply response that has kept the market from being flooded with excess cargo,” ANZ senior commodity strategist Daniel Hynes said.

“It has reached a point, however, where its cautious approach could ultimately hurt the market.”

The alliance has been overly vigilant since last year’s price rout, but with supply tightening in the US and China and demand rebounding, there is a growing expectation that OPEC will announce an increase in supply, which would “support higher prices”, ANZ said.

Hong Kong’s stock market operator cancelled its morning trading session on Monday after the city’s weather observatory issued a black rainstorm warning, as school classes and other services were suspended.

The Hong Kong Observatory issued the warning at 8.20am local time and it has stayed in place since then. That prompted Hong Kong Exchanges and Clearing Ltd. to cancel morning trading of securities and derivatives markets, including Stock Connect, in accordance with its rules.

If the rainstorm warning is lowered before 11am, the afternoon session will take place as usual from 1pm. Trading will not begin on Monday if the warning is still in force by midday. Average daily turnover in Hong Kong is about $HK188 billion ($US24.2 billion), according to data compiled by Bloomberg.

Earlier, the city’s education bureau suspended classes across Hong Kong due to the severe weather conditions. The government also suspended COVID-19 vaccination services and court hearings were adjourned.

Morning trading in the city was last cancelled in October last year, when tropical storm Nangka prompted authorities to close businesses and schools.

“If the market reopens in the afternoon, there will still be plenty of time to digest weekend news and A-share movements,” said Steven Leung, executive director of UoB Kay Hian (Hong Kong) Ltd. “Markets have been relatively stable in both Hong Kong and A shares lately.”

The world of central banking right now has a bit of a Harry Potter flavour to it. The market is like a kind of Sorting Hat, looking at each central bank in turn and trying to decide which house to put it in.

The US Federal Reserve set this off in mid-June when it relocated to the shady Slytherin dungeon (if you’re an inflation dove) or the noble Gryffindor tower (if you’re a hawk), after chairman Jerome Powell reset expectations towards an interest rate increase in early 2023.

Who will join the Fed’s common room, and who will join the more dovish ranks? The Czechs and Hungarians have already raised their rates, and the Norwegians are primed to go in September.

The Reserve Bank of Australia wants to be in the 2024 crowd, but many Martin Place watchers reckon it will end up in the Fed’s Quidditch team.

If the RBA is Harry Potter, then the Bank of England and the European Central Bank could be boon companions Ron and Hermione: both seem firmly wedded to a long period of loose policy, even as inflation casts an ever-darkening shadow.

China’s state planner said that it expects a coal supply crunch to ease and coal prices to fall in July, according to a report from the official Xinhua news agency on Sunday.

“With the growth of hydropower and solar power generation in the summer, as well as the increase in coal production and imports, the contradiction between coal supply and demand will tend to ease,” said the National Development and Reform Commission, according to the report.

“It is expected that coal prices will enter a downward channel in July, and prices will drop significantly.”

Chinese coal miners and coal prices have both tumbled during the morning trade.

China’s state planner and market regulator earlier in June jointly launched an investigation into coal prices, saying they would crack down on speculation and hoarding.

China also plans to release more thermal coal from its reserve to ensure market supply ahead of summer peak demand, although the amount was not disclosed, according to the report.

The state planner has said it plans to build up around 100 million tons of deployable coal reserves in the country in 2021.

Gold explorer Barton Gold has fallen on its opening day of trading, in line with other gold miners.

The company’s shares were down 8 per cent to 23¢ after listing at 25¢ a share. They traded as low as 21.5¢ earlier in the session.

“I would like to thank the entire Barton team, our advisers at Taylor Collison, Sprott Capital Partners, Canaccord Genuity, Ashurst and the ASX, the SA Government and Department for Energy and Mining, and the more than 500 shareholders who now join us on this next phase of the Company’s development,” said Barton managing director Alexander Scanlon.

“Over the past two years, the company has built an excellent team, adopted a new exploration-driven approach to the central Gawler Craton’s most exciting ground, and identified significant new discovery potential across two large-scale, historically underexplored mineral systems.

“The company will begin initial major exploration programs quickly during the coming weeks, aimed at systematically testing multiple priority targets across Tarcoola and Tunkillia.“

Star Entertainment Group has been forced to close The Star Sydney and implement restrictions its The Star Queensland properties after new restrictions were introduced.

The Star Sydney will remain closed until at least 11:59pm AEST on July 9 apart from limited hotel facilities. The Star said it will continue to pay staff during this further seven-day stay-at-home period.

The Star Queensland’s properties will be subject to capacity limits, mandatory mask-wearing and the seating of patrons while eating or drinking.

The Star said it remains committed to the health, safety and wellbeing of its team members and guests.

In the decade since the global financial crisis, fiscal consolidation has left monetary policy to do the heavy lifting, and the combined forces of globalisation and technology have left central banks well short of their inflation targets.

The United States has missed its target by 1 per cent, having been nearly 4 per cent behind a year ago. The European Central Bank is cumulatively 8 per cent behind, and the Reserve Bank of Australia nearly 6 per cent behind. Examining the cumulative undershooting of inflation targets shows why central banks are keen to ride the rebound out of COVID-19 shutdowns to launch.

Be careful what you wish for.

It is very much in their interests to contain the tightening narrative until it is clear that there needs to be a tightening narrative. Inflation is being described as “transitory”. Central banks have shifted to one where inflation has to be seen, not just forecast, and Federal Reserve members are currently wrestling with this concept.

As we learnt, Fed chairman Jerome Powell surprised the market with a departure from describing inflation as being transitory to perhaps being a little more persistent: “I will say that these effects have been larger than we expected and they may turn out to be more persistent than we expected,” he volunteered.

Travel stocks have been hit hard by the introduction of lockdown measures, leading the losses on the ASX this morning.

Gold Road Resources is the worst performer, down 8.5 per cent to $1.30.

The travel stocks have been hit hard. Webjet fell 4.2 per cent to $4.85, Flight Centre is trading 4.1 per cent lower at $14.45 and Qantas dropped 3.8 per cent to $4.55.

A number of stocks set to benefit from the lockdowns are trading higher. Kogan.com is up 8 per cent to $13.18 and Metcash is trading 3 per cent higher at $3.77 after reporting strong results.

Coles is trading 1.8 per cent higher at $17.13 and Woolworths has firmed 1.7 per cent to $37.42.

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