Asian shares edge down from five-month high

Friday, 27 February 2015 00:00 - - {{hitsCtrl.values.hits}}

Reuters: Asian shares prices edged away from five-month highs on Thursday, while the dollar steadied after slipping on Federal Reserve Chair Janet Yellen’s indication that the US central bank is in no hurry to hike interest rates. MSCI’s broadest index of Asia-Pacific shares outside Japan fell about 0.2%, as investors took profits after Yellen’s testimony and a China factory survey’s better-than-expected headline number lifted it to a five-month high on Wednesday. Japan’s Nikkei stock average outperformed, rising about 0.9% to a 15-year high, helped by news that the Federation of National Public Service Personnel Mutual Aid Associations, the body managing Japan’s national civil service pensions, will raise its target allocation for domestic stocks to 25% from 8%. “This officially-announced drastic investment strategy is giving renewed excitement to the market,” said Shigemitsu Tsuruta, senior strategist at SMBC Friend Securities. MSCI’s 46-country world index was up 0.1%, and stood just below its double-top of its September peak and a record high hit in July. “On the whole, the world’s markets seem likely to be in a risk-on mode. The valuation still looks not that expensive, except for US markets,” said Hirokazu Kabeya, senior strategist at Daiwa Securities. The price-earnings ratio of US shares stood at 19.6, but the world’s markets on the whole were traded at 16.3 times earnings, according to Thomson Reuters StarMine.

Gold holds above $ 1,200 on view US rate rise will be delayed

Reuters: Gold rose for a second session and held above $ 1,200 an ounce on Thursday as comments from Federal Reserve Chair Janet Yellen led investors to believe US interest rates would start to rise later than expected this year. Firm Chinese physical demand also supported bullion as buyers from the world’s No. 2 consumer trickled back into the market after the long Lunar New Year break, although it was not strong enough to push the spot price above Wednesday’s peak. Bullion was up 0.3% at $1,208.50 an ounce at 0302 GMT. It rose as much as 1% to $1,211.80 on Wednesday after Yellen indicated the Fed would be flexible in raising rates. She told the Senate Banking Committee on Tuesday that while the Fed was preparing to consider rate hikes on a ‘meeting-by-meeting basis’, an increase was not likely for at least the next couple of meetings. Yellen did not offer any additional insight on the timing of a rate increase before the House of Representatives’ Financial Services Committee on Wednesday. Markets had until now been focusing on June. The comments support ‘market thinking that the Fed may hike rates later this year and the path will be a little flatter than what was previously expected’, said ANZ Bank analyst Victor Thianpiriya.

Oil rises above $62 after Saudi comments on demand

Reuters: Oil rose above $62 a barrel on Thursday as indications of a coming recovery in demand offset a further jump in US crude stockpiles which underlined currently ample supplies. Crude benchmarks in the US and Europe posted their largest%age gains in nearly two weeks on Wednesday, supported by remarks from Saudi Arabia’s oil minister, Ali al-Naimi, and a slightly stronger-than-expected Chinese manufacturing survey. Brent crude LCOc1 rose 71 cents to $62.34 by 5.23 a.m. ET, after jumping more than 5% on Wednesday. US crude CLc1 fell 40 cents to $50.59, following a more than 3% gain in the previous session. “The comments yesterday, the change of tone from Saudi Arabia, is still an element,” said Olivier Jakob, analyst at Petromatrix, of Brent’s gain. “The market is still reacting to that.” Brent collapsed from $115 in June on global oversupply, in a decline that deepened after the Organization of the Petroleum Exporting Countries chose to defend market share against rival supply sources, rather than cut its own output. The price has rallied more than 35% from a near six-year low of $45.19 reached in January, supported by signs that lower prices are starting to reduce investment in US and other non-OPEC supply. A growing number of OPEC officials are making cautiously hopeful comments on the market outlook. This week, the Saudi minister said demand is growing while a Gulf OPEC delegate said demand would rise more strongly in the second half of 2015. OPEC officials including Naimi had been making more bearish comments. Naimi was quoted in December as saying OPEC would not cut output even if oil fell to $20.