UK MARKET TALK ROUNDUP: SHARES LOSING -2-

28th Jul 2010 12:50

0643 GMT [Dow Jones] KLCI +0.2% at 1355.21; local dealer says market remains in consolidation phase, sentiment remains positive; index "seems to be well supported at the 1350 level;" providing base for further gains, dealer says. Notes thin volume (380 million shares) today may keep index within 1350-1360 range for rest of day. Market breadth positive with 339 advancers vs 262 decliners. Advancers include newly listed Ivory Properties (5175.KU) +29% at MYR1.29, MISC (3816.KU) +1.1% at MYR8.90, Proton (5304.KU) +1.6% at MYR4.52. Decliners include Mudajaya (5085.KU) down 4.7% at MYR5.31, Aeon (6599.KU) down 1% at MYR4.97. ([email protected]) 0636 GMT [Dow Jones] China's consumers have been spending more than previously believed, according to latest revisions to country's economic data, but newfound spending isn't enough to alter balance of power in economy still primarily driven by investment. Over past few months, China's statistical authorities revised several years of figures to reflect results of latest economic census, which uncovered much activity missed by earlier surveys, resulting in increase in household spending estimates by about $126 billion over eight years. China's statistical system, formed in planned-economy era, tends to be better at counting state enterprises' output than tracking consumption decisions of 1.3 billion people; but overall picture of economy where consumption accounts for unusually low share, investment unusually high one unchanged. Huge government stimulus program appears to have worsened imbalance. Though China's government leaders have long urged transition to economy driven by sustainable growth in household spending, rather than investment boom-and-bust cycles, it looks like they still have a long way to go. See: =WSJ BLOG/China Real Time Report: Revisions Show Stronger Consumption In China ([email protected]) 0635 GMT [Dow Jones] Bunds have opened slightly lower as European equities look set to open higher in line with their Asian peers. Strong corporate earnings and news that the Basel Committee will relax liquidity and capital rules have dragged on bunds, while yield spreads on peripheral government bonds versus bunds have also tightened in recent sessions. On Wednesday, Portugal sells bonds for up to EUR1.25 Bln and German CPI figures are also out. "The safe haven bid for Bunds may continue to unwind today should the Portuguese issuance go particularly well while today's key data - German CPI and US durable goods orders - do not look likely to prove particularly bond-friendly," says WestLB. September bunds are 0.09 down at 127.60 and the 10-year bund is down at 101.96 to yield 2.771%. ([email protected]) 0626 GMT [Dow Jones] ASIAN SUMMARY: Regional markets mostly higher; Nikkei +2.7%, Shanghai Composite +2.1%, S&P/ASX +0.7%, NZX-50 +0.5%, HSI +0.5%, STI +0.5%, Kospi +0.3%; but Sensex flat, SET flat. In FX markets, EUR/USD at 1.3021 vs 1.2997 late NY trade, EUR/JPY at 114.49 vs 114.37, USD/JPY at 87.94 vs 87.97. AUD/USD down at 0.8972 vs 90.18 just prior to country's 2Q CPI data coming in below expectations at +0.6% on-quarter, +3.1% on-year vs expectations of +1.0%, +3.4%, likely ensuring RBA to keep rates on hold at meeting next week, possibly until 2011. Australia Treasurer Wayne Swan says underlying inflation rate encouraging, continuing to moderate in line with official forecasts; also says while global economy's downside risks rising, Australia's outlook bright, Asia Pacific region's growth likely to remain strong for some time. BOJ policy board member Hidetoshi Kamezaki said central bank to take "proactive" steps to tackle deflation, suggesting BOJ prepared to keep extremely accommodative monetary policy while nation's economic outlook remains uncertain. South Korea's June current-account surplus totaled $5.04 billion at one-year high vs May's revised $3.82 billion. Indonesia's 1H actual investment by foreign and local investors +40% on-year at IDR92.9 trillion, says Gita Wirjawan, chairman of country's investment board. Philippine Bureau of Internal Revenue said collection next year expected to exceed PHP910 billion target; could increase by more than 10% from this year's collection goal of PHP860 billion. National Bank of New Zealand's Business Outlook survey showed NZ's July business confidence eased to net 27.9% of respondents expecting conditions to improve over next 12 months vs June's 40.2%. Spot gold at $1,162.70/oz, up $1.10 vs NY close. September Nymex crude oil futures down 7 cents at $77.42/bbl. ([email protected]) 0614 GMT [Dow Jones] The improvement in investor appetite for riskier assets, as mirrored in recent stock market gains, is putting the Swiss franc under pressure, says Commerzbank. "When risk aversion sinks, so does the franc," says currency analyst Lutz Karpowitz. The only potential support on the horizon for CHF is Friday's KOF barometer, which is expected to hold near a four-year high. EUR/CHF at 1.3778 by 0612 GMT. ([email protected]) 0707 GMT [Dow Jones] Morgan Stanley cuts its African Barrick Gold (ABG.LN) price target to 668p from 733p to reflect lower production guidance and higher cash cost guidance for '10 in the company's 1H numbers. Still, African Barrick has a balanced portfolio of assets, with the largest planned volume growth among London-listed gold miners, says the bank. Its strong liquidity position will not only help the company finance its organic growth, but should also provide deal-making flexibility, says the bank. Overweight. Shares -0.5% at 545p. ([email protected]) Contact us in London. +44-20-7842-9288 [email protected] (END) Dow Jones Newswires July 28, 2010 07:50 ET (11:50 GMT)