World stocks were mixed Thursday, with Asian indexes falling as Chinese authorities tightened liquidity in the financial system of the world’s second largest economy.
KEEPING SCORE: Germany’s DAX edge up 0.1 percent to 12,212 and France’s CAC 40 was flat at 5,067. Britain’s FTSE 100 shed 0.3 percent to 7,353. U.S. shares were poised for a weak open: Dow and S&P 500 futures were both 0.1 percent lower.
CHINESE LIQUIDITY: China’s central bank refrained from open market operations for a fifth straight day, effectively siphoning money from the banking system. The People’s Bank of China said in a statement that liquidity in the banking system was at a “relatively high level,” the official Xinhua news agency reported.
MARKET INSIGHT: “Definitely one of the problems is the liquidity problem at this moment, mainly driven by the People’s Bank of China,” said Dickie Wong, research director at Kingston Financial Group. He predicted that China would continue to hike interest rates this year, which would improve profit margins at Chinese banks and financial services, but investors might be tempted to sell their shares if earnings reports don’t beat expectations. “It gives the perfect reason for investors to sell.”
ASIAN SCORECARD: The Shanghai Composite index skidded 1 percent lower to end at 3,210.24 and Hong Kong’s Hang Seng shed 0.4 percent to 24,301.09. Tokyo’s benchmark Nikkei 225 index lost 0.8 percent to 19,063.22 and South Korea’s Kospi slipped 0.1 percent to 2,164.64. Australia’s S&P/ASX 200 rose 0.4 percent to 5,896.20. Southeast Asian indexes were mixed.
SAMSUNG: Shares of the South Korean electronics giant rose 0.5 percent after it unveiled its first major smartphone since the embarrassing recall of its fire-prone Note 7. The Galaxy S8 comes in two sizes but doesn’t have more battery capacity, giving it more breathing room.
TOSHIBA FILING: The embattled Japanese company’s shares jumped 4 percent after its U.S. nuclear unit Westinghouse Electric filed for bankruptcy protection. The Chapter 11 petition is an important step for Toshiba as it fights to stop hemorrhaging losses at the ailing nuclear business, which has been hit with rising costs because of safety concerns and regulations, and rising anti-nuclear sentiment in some countries.
H&M: Shares in the Sweden-based low-cost fashion retail plunged as much as 13 percent after the company’s sales growth of 7 percent disappointed investors. The company noted that customers are increasingly buying online, something it would focus more on. It also noted that the wider market was challenging.
ENERGY: Oil stabilized after a big rally. Benchmark U.S. crude oil futures edged down 5 cents to $49.46 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.14 on Wednesday. Brent crude, used to price international oils, lost 25 cents to $52.17 a barrel in London.
CURRENCIES: The dollar rose to 111.30 yen from 111.04 yen. The euro fell to $1.0737 from $1.0767.