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Nikkei slumps to 4-month low as inflation scare hits expensive shares

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Author of the article: TOKYO — Japanese shares sank on Thursday, with the Nikkei average hitting a four-month low, as SoftBank Group and highly valued stocks were pummeled by U.S. inflation scare. The Nikkei index dropped 1.84% to 27,628.73, hitting its lowest level since early January, while the broader Topix shed 0.61% to 1,866.57, touching…

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TOKYO — Japanese shares sank on Thursday, with the Nikkei average hitting a four-month low, as SoftBank Group and highly valued stocks were pummeled by U.S. inflation scare.

The Nikkei index dropped 1.84% to 27,628.73, hitting its lowest level since early January, while the broader Topix shed 0.61% to 1,866.57, touching a three-month low.

“Inflation worries are hitting high-tech stocks while rising domestic coronavirus infections are raising concerns about political stability. And, companies’ guidance is pretty soft,” said a strategist at a Japanese brokerage.

“But I do expect the market to bottom out soon. You can’t keep selling forever when earnings are still improving.”

A shocking rise in U.S. inflation published on Wednesday fanned worries U.S. interest rates may need to rise sooner than expected.

That bludgeoned Wall Street overnight, especially tech shares whose high valuations have been based on the assumption of low interest rates, and hit Japanese equivalents as well.

SoftBank Group dropped 7.2% as concern over its frothy portfolio valuations eclipsed the fact that it has announced a record profit for a Japanese firm.

Other richly valued shares, mainly from the tech and healthcare sectors, fell sharply, with medical equipment maker Terumo down 4.3%, chip-making machine maker Tokyo Electron losing 4.4% and lens maker Hoya dropping 3.2%.

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Also hurting market sentiment, Japan is struggling to contain the COVID-19 pandemic, forcing dozens of towns to abandon plans to accept overseas athletes competing in the Olympics from July due to concerns about inadequate resources.

Earning results also continued to weigh on the market, with softer-than-expected guidance often enough to trigger big selling, dwarfing improving profits.

Game company Nexon lost 15.3%, while electronics maker NEC dropped 11.7%. JGC Corp fell 10.6%.

Meanwhile, about a third of shares on the main board managed to gain, led mainly by value shares, such as steelmakers and banks. The Topix Value index was almost flat.

Retailer Seven&i Holdings jumped 6.8% to a two-year high after activist investor ValueAct Capital amassed a $1.53 billion stake in the firm.

Sumitomo Mitsui Trust Holdings gained after the Nikkei business daily reported the banking group planned to sell down all of its cross-holding shares. (Reporting by Hideyuki Sano; Editing by Subhranshu Sahu)

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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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