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Asian Stocks Erase 2021 Gains on Concerns Over Inflation, Virus

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Author of the article: Bloomberg News Min Jeong Lee (Bloomberg) — Asian stocks dropped, with the regional benchmark briefly erasing its gains for the year, as mounting worries over inflation and a resurgence in Covid-19 cases soured investor sentiment. The MSCI Asia Pacific Index slid as much as 1% and was down 0.9% as of…

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Min Jeong Lee

(Bloomberg) — Asian stocks dropped, with the regional benchmark briefly erasing its gains for the year, as mounting worries over inflation and a resurgence in Covid-19 cases soured investor sentiment.

The MSCI Asia Pacific Index slid as much as 1% and was down 0.9% as of 12:52 p.m. in Tokyo, tracking losses in American shares after data on Wednesday showed U.S. consumer prices climbed in April by the most since 2009. The Asian gauge has now fallen more than 9% from a Feb. 17 peak.

Tech stocks have been at the forefront of a selloff in global equities this week as an explosive rally in commodity prices threatens to push up inflation. Asia’s tech shares, which are contending with higher U.S. bond yields and stretched valuations just like their global peers, have also been hurt by regulatory tightening in China. Further, a fresh surge in infections in several countries including India, Japan and parts of Southeast Asia is weighing on regional stocks.

“We need to kind of price in a more normal interest-rate environment, more normal inflation environment,” said Ken Peng, head of Asia investment strategy at Citigroup Inc.’s private-banking arm. “The shake up could last a while longer. But I’m still not too worried because, growth will comeback to be the most important element once interest rates normalize.”

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Technology and communication services were the worst-performing sectors on the Asian gauge Thursday.

Japanese shares declined for a third day on Thursday, while stocks in China snapped a two-day winning run. Markets in Singapore, India, Indonesia, Malaysia and the Philippines were shut for a holiday. In Taiwan, the benchmark stock index extended losses after slumping the most since March last year on Wednesday partly due to concern over tightening of virus-linked restrictions.

SECTORS TO WATCH

Stocks linked to cryptocurrencies fell in line with the slump in Bitcoin, after Tesla Inc. Chief Executive Officer Elon Musk expressed concerns over its energy usageTraditional Chinese medicine firms advanced as President Xi Jinping called for the development of the treatments after experience gained from COVID-19

MARKETS AT A GLANCE

Japan’s Topix index down 0.6%; Nikkei 225 down 1.8%Hong Kong’s Hang Seng Index down 1%; Hang Seng China Enterprises down 1.2%; Shanghai Composite down 0.7%; CSI 300 down 0.8%Taiwan’s Taiex index down 0.7%South Korea’s Kospi index down 0.5%; Kospi 200 down 0.7%Australia’s S&P/ASX 200 down 0.6%; New Zealand’s S&P/NZX 50 down 1.1%Thailand’s SET down 1.4%; Vietnam’s VN Index down 0.2%

ADVANCERS

Seven & i Holdings jumped as much as 7.4% in Tokyo as ValueAct Capital disclosed the acquisition of a 4.3% stake in the operator of convenience storesKirin rose as much as 4.3%, the most since Nov. 16, after the Japanese beer maker beat quarterly profit expectationsChina Mengniu Dairy jumped as much as 5.4% after Danone finalized its HK$15.4 billion ($1.98 billion) sale of approximately 9.8% stake in MengniuGrainCorp added as much as 8.3%, the most since Nov. 13, after the Australian agricultural company raised its FY earnings forecastHanwha Life Insurance surged as much as 8.7% after its 1Q report showed earnings jumped nearly four foldNTT climbed as much as 2.8% after the telecom giant’s quarterly profit and forecast for the current fiscal year beat analyst estimates

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DECLINERS

SoftBank Group declined as much as 6.7% as its record quarterly profit failed to impress a market reeling from a global selloff in tech stocksGongniu Group dropped as much as 9.7% in Shanghai after the company said it was under investigations by local authorities for monopolistic behaviorPerenti Global tumbled as much as 28%, the most since March 2020, after the Australian mining services company cut its guidanceChina Evergrande New Energy Vehicle Group sank 8.7% in Hong Kong after its parent sold 260m shares at HK$40.92 apiece, a 20% discount to last closeNexon slid as much as 17% after the game developer forecast as much as a 19% y/y decline in operating profit in 1H

©2021 Bloomberg L.P.

Bloomberg.com

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Soybeans fall 1%, Chinese demand limits losses

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Author of the article: CANBERRA — U.S. soybean futures fell 1% on Monday as the dollar strengthened, although strong Chinese demand limited the losses. FUNDAMENTALS * The most-active soybean futures on the Chicago Board Of Trade were down 1.1% to $13.80-1/4 a bushel by 0131 GMT, having firmed 5% percent on Friday. * Corn futures…

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CANBERRA — U.S. soybean futures fell 1% on Monday as the dollar strengthened, although strong Chinese demand limited the losses.

FUNDAMENTALS

* The most-active soybean futures on the Chicago Board Of Trade were down 1.1% to $13.80-1/4 a bushel by 0131 GMT, having firmed 5% percent on Friday.

* Corn futures fell 1.3% to $6.46-3/4 a bushel, having gained 3.5% in the previous session.

* Wheat futures slid 0.9% to $6.57 a bushel, having closed up 3.7% on Friday.

* Chinese state-owned importers bought at least eight cargo shipments of U.S. soybeans on Friday, the country’s largest U.S. soybean purchases in 4-1/2 months, two U.S. traders familiar with the deals said.

* About 41% of Iowa, the nation’s top corn producer and No. 2 soybean state, was under severe drought last week, according to the weekly U.S. drought monitor published last week.

MARKET NEWS

* The dollar held near multi-month peaks against other major currencies, after the U.S. Federal Reserve surprised markets last week by signaling it would raise interest rates and end emergency bond-buying sooner than expected.

* Oil prices nudged up, underpinned by strong demand during the summer driving season and a pause in talks to revive the Iran nuclear deal that could indicate a delay in resumption of supplies from the OPEC producer. (Reporting by Colin Packham; editing by Uttaresh.V)

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Boral sells U.S. products business after rejecting Seven bid

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Author of the article: Australia’s Boral Ltd said it would sell its North American building products business to a unit of NYSE-listed Westlake Chemical Corp for $2.15 billion, throwing a spanner in the works of a takeover bid by Seven Group. Boral’s shares rose as much as 4% to A$7.06, their highest since October 2018,…

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Australia’s Boral Ltd said it would sell its North American building products business to a unit of NYSE-listed Westlake Chemical Corp for $2.15 billion, throwing a spanner in the works of a takeover bid by Seven Group.

Boral’s shares rose as much as 4% to A$7.06, their highest since October 2018, after the building and construction materials supplier revealed its deal to sell the U.S.-based business in a disclosure responding to Seven’s bid.

Boral had already asked shareholders to reject an off-market zero premium bid by Seven Group, a conglomerate controlled by Australian media owner Kerry Stokes, saying it undervalued the company.

Seven owns 23.18% of Boral, and made the offer in May after failing to raise its stake to 30% due to regulatory setbacks.

Seven Group said the business had been sold for a loss in a rushed response to their offer.

“Our view is that Boral should have secured more. This business has been outperforming while the Australian business is under-performing,” a Seven spokesperson said in an email.

One analyst said the U.S. deal would not have a great impact on Seven’s takeover attempt.

“Seven Group made a bid that was expected to get turned down to clear the way for them to keep buying more,” said Mathan Somasundaram, CEO at Deep Data Analytics.

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“Seven Group’s historical trend in these scenarios suggests that they will get as much as they are allowed and stay there as a blocking stake. When the cycle turns weak, they will move in and take control gradually,” he said.

Boral’s shares have surged more than 30% this year, as monetary and fiscal stimulus helped Australia’s property market rebound from last year’s pandemic lows.

Boral CEO Zlatko Todorcevski said the company expected significant surplus to be returned to shareholders from the sale, with its net debt target falling from A$1.5 billion to A$1.3 billion.

($1 = 1.3330 Australian dollars) (Reporting by Arundhati Dutta and Tejaswi Marthi in Bengaluru; Editing by Stephen Coates)

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Gold prices claw back as U.S. Treasury yields retreat

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Author of the article: Gold prices firmed on Monday, after posting a 6% drop last week, as a retreat in U.S. Treasury yields boosted the allure of the non-yielding metal. FUNDAMENTALS * Spot gold was up 0.5% at $1,772.34 per ounce, as of 1004 GMT. Last week, bullion prices posted their worst week since March…

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Gold prices firmed on Monday, after posting a 6% drop last week, as a retreat in U.S. Treasury yields boosted the allure of the non-yielding metal.

FUNDAMENTALS

* Spot gold was up 0.5% at $1,772.34 per ounce, as of 1004 GMT. Last week, bullion prices posted their worst week since March 2020 on the U.S. Federal Reserve’s hawkish outlook.

* U.S. gold futures edged 0.2% higher to $1,772 per ounce.

* The benchmark U.S. Treasury yields fell to their lowest since March 3, reducing the opportunity cost of holding bullion, which pays no return.

* The U.S. dollar held near multi-month peaks against other major currencies on Monday, after the Fed surprised markets last week by signaling it would raise interest rates and end emergency bond-buying sooner than expected.

* Minneapolis Federal Reserve President Neel Kashkari said on Friday he wants to keep the U.S. central bank’s benchmark short-term interest rate near zero at least through the end of 2023 to allow the labor market to return to its pre-pandemic strength.

* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 1.1% to 1,053.06 tonnes on Friday from 1,041.99 tonnes on Thursday.

* Gold purchases in India ticked up last week after a decline in local rates, although dealers cautioned that demand is unlikely to return to normal levels soon.

* Russia’s gold reserves stood at 73.7 million troy ounces, as of the beginning of June, the central bank said on Friday.

* Silver was up 0.6% at $25.95 per ounce, palladium climbed 1% to $2,490.93, while platinum rose 0.4% to $1,037.89. (Reporting by Eileen Soreng in Bengaluru, Editing by Sherry Jacob-Phillips)

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