2024-03-24 23:10

March 25 (Reuters) - A look at the day ahead in Asian markets. Investors in Asia may favor playing it conservative ahead of a slew of economic indicators in coming days, especially with Japan's stock market notching consecutive record highs and market closures on Friday for many centers, including Hong Kong. Japan's Nikkei 225 was hardly unique last week, extending its rally on Thursday and Friday. While dovish central bank signals emanated from the Federal Reserve, Swiss National Bank and Bank of England, it was the Bank of Japan that kicked off the hectic central bank news cycle by ending its long-held policy of yield curve control and negative interest rate in a signal of confidence in Japan's economic recovery. But Wall Street and other exchanges paused on Friday to digest their record runs and Japan could be due for its own moment of consolidation in the coming days. Japan does get revised January leading indicators on Monday and services PPI data, while Tokyo CPI is due on Thursday. Consumer price inflation data is also due from Malaysia and Singapore on Monday. YUAN'S SLIDE COULD FURTHER DISRUPT Of more concern for the region's currencies is Friday's sell-off in the China's yuan to a four-month low on the weaker side of the 7.2 per dollar level. It ended the U.S. session at 7.2759 amid growing market expectations that Beijing will have to deliver further monetary easing to shore up economic growth. The yuan swoon hit China's stock market and pressured the Philippine peso , Indian rupee , Indonesian rupiah , Korean won and Thai baht . Meanwhile, Premier Li Qiang on Sunday said China will carefully study issues of market access and cross-border data flows and will soon issue new regulations in these areas. "We cordially welcome companies from all countries to invest in China and deepen their foothold in China," Li told an audience of global CEOs and Chinese policymakers. Profit taking on Friday capped the advances of stock indexes on Wall Street and in Europe, a day after they notched all-time highs. The S&P 500 (.SPX) , opens new tab closed 0.14% lower and the Nasdaq (.IXIC) , opens new tab rose a similar amount. Switzerland's surprise rate cut on Thursday cemented the notion that, BOJ aside, developed country central banks would be easing interest rates soon. That thinking obviously includes the Fed, which on Wednesday left the fed funds rate alone at 5.25% to 5.50% but indicated it was still prepared to lower rates by 75 basis points this year, despite a worrying uptick in U.S. inflation and economic growth solid enough perhaps to dodge a soft landing. Many markets in Europe and in the U.S. will be closed on Friday, for Good Friday. As it happens, since it's not a U.S. public holiday, the most important data of the week, the February personal consumption expenditures inflation index, lands when markets are closed. But Asia will be the first markets to trade on it the following Monday. Meanwhile there is not as much incentive to buy during a holiday-shortened week. Hong Kong's stock exchanges are also closed but Japan's are open. Here are key developments that could provide more direction to markets in the coming week: - Malaysia CPI (Feb) - Singapore CPI (Feb) - Japan revised leading indicators (Jan) - Japan services PPI (Feb) (This story has been corrected to say that markets closed on Friday for Hong Kong, not China, in paragraphs 1 and 15) Get a look at the day ahead in Asian and global markets with the Morning Bid Asia newsletter. Sign up here. https://www.reuters.com/markets/asia/global-markets-view-asia-graphic-pix-2024-03-24/

2024-03-24 13:26

RIYADH, March 24 (Reuters) - Saudi Arabian renewable energy utility ACWA Power International on Sunday reported a storage breakdown at one of the solar plants it operates in Morocco that will cost the company an estimated $47 million. The 150-megawatt plant, part of the Noor Ouarzazate solar complex, will be forced to remain idle until November 2024, the company said on the website of the Saudi Stock exchange. The breakdown highlights the recurrence of technical issues and storage breakdowns at the concentrating solar power (CSP) plant. Technical problems stopped all output there for a year from summer 2021, two sources told Reuters last month. The company said it will repair the storage issue and was also mulling building a new storage tank. In a 2020 report, Morocco's economic, social, and environmental council recommended abandoning CSP altogether due to its high cost compared to photovoltaic and wind energy. Morocco aims for renewables to represent 52% of installed capacity by 2030 from 37.6% now, mostly through investments in solar and wind plants. It is already falling behind on solar, with only 831 megawatts (MW) installed so far, compared to the 2,000 MW that was planned for by 2020. Wind has made up some of the shortfall but polluting coal plants still make up most output. The Reuters Power Up newsletter provides everything you need to know about the global energy industry. Sign up here. https://www.reuters.com/business/energy/breakdown-saudi-solar-plant-morocco-costs-firm-47-million-2024-03-24/

2024-03-24 12:59

NEW YORK, March 22 (Reuters) - A reassuring economic outlook and dovish signals from the Federal Reserve are encouraging investors to look beyond the massive growth and technology stocks that have fueled the U.S. stock market’s gains over the past year. Though rallies in stocks such as Nvidia (NVDA.O) , opens new tab and Meta Platforms (META.O) , opens new tab have been the market’s main individual drivers in 2024, the financials (.SPSY) , opens new tab, industrials (.SPLRCI) , opens new tab and energy (.SPNY) , opens new tab sectors are also outperforming the S&P 500’s 9.7% year-to-date gain. That has eased worries that the market was becoming increasingly tied to the fortunes of a small group of stocks. A belief that the economy will remain resilient while inflation fades has prompted investors to look for winners outside of the megacaps. That view received a boost from the Fed earlier this week, when the central bank expressed confidence it would be able to tamp down inflation and cut interest rates this year, even as it raised its forecast for how much the U.S. economy will grow. “There is more confidence that the Fed is going to be able to ... get inflation approaching their longer-term targets without a recession," said Scott Chronert, head of U.S. equity strategy at Citi, which is overweight the technology, financial and industrial sectors. “You are going to take a little bit more comfort that you can own a bank or an industrial if you think the Fed is going to lower rates at some point here.” Investors in the coming week will be watching Friday's personal consumption expenditures price index that will offer the latest read on inflation. The end of the first quarter also could prompt volatility as fund managers adjust their portfolios. The broadening rally contrasts with last year, when uncertainty over the economic outlook prompted investors to seek shelter in the so-called Magnificent Seven group of megacap stocks, drawn by their dominant industry positions and strong balance sheets. Only the sectors that housed megacaps - tech (.SPLRCT) , opens new tab, communication services (.SPLRCL) , opens new tab and consumer discretionary (.SPLRCD) , opens new tab - outperformed the S&P 500’s 24% gain last year. This year, the financial and industrial sectors are up 10.1% and 9.9%, respectively, while energy has gained 10.3%. More broadly, the Magnificent Seven - Apple (AAPL.O) , opens new tab, Nvidia (NVDA.O) , opens new tab, Alphabet (GOOGL.O) , opens new tab, Tesla (TSLA.O) , opens new tab, Microsoft (MSFT.O) , opens new tab, Meta Platforms (META.O) , opens new tab and Amazon.com (AMZN.O) , opens new tab - have been responsible for 40% of the S&P 500’s gain as of Thursday, according to S&P Dow Jones Indices. That compares with a share of over 60% last year. The wider rally "means that leadership isn't so concentrated and susceptible to a correction," said Robert Pavlik, senior portfolio manager at Dakota Wealth. After the Magnificent Seven all posted huge gains in 2023, performance among them has diverged more this year, giving investors another reason to look at the rest of the market. Enthusiasm over artificial intelligence has helped fuel a 90% gain in shares of Nvidia so far this year, while Microsoft has gained 14.5%. On the other side of the ledger, Apple and Tesla are down about 11% and 32%, respectively, for the year. The latest blow for Apple came this week when the Department of Justice alleged the iPhone maker monopolized the smartphone market, highlighting the regulatory risks that could make investors wary of Big Tech. In another sign of broadening, more S&P 500 stocks are outperforming the benchmark, 180 so far this year as of Thursday versus 150 last year. Some corners of the market, such as small caps, still look subdued. The Russell 2000 (.RUT) , opens new tab, which is focused on smaller companies, is up just 2.2% year-to-date. Some investors believe the group could get a boost from the Fed’s outlook, which kept in place a previous forecast of three 25 basis-point interest rate cuts, despite the central bank’s upgraded growth projections. "As the Fed starts to lower interest rates, that creates liquidity and makes financing easier," said Jack Ablin, chief investment officer at Cresset Capital. "Who's most advantaged? Not the megacap stocks that have unfettered access to capital no matter what rates are, but really the smaller, lesser-known names." The broadening trend could take a hit if the economy begins floundering or runs too hot, upsetting the so-called Goldilocks narrative that has supported markets in recent months. Some investors also believe the market is due for a pullback after a run in which the S&P 500 has gained 27% since late October. Others, however, are betting the trend will continue. Peter Tuz, president of Chase Investment Counsel, said his firm recently purchased shares of Goldman Sachs (GS.N) , opens new tab and oil services company Tidewater (TDW.N) , opens new tab while reducing its megacap holdings, including selling its Apple stake. "The market is broadening out," he said. "You're just seeing that there's more ways to make money this year than the Mag 7." Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here. https://www.reuters.com/markets/us/wall-st-week-ahead-broadening-us-market-rally-gets-boost-dovish-fed-2024-03-22/

2024-03-24 12:16

KYIV, March 24 (Reuters) - An underground gas storage site in Ukraine was attacked on Sunday in the latest wave of Russian missile strikes on power facilities, while officials restored power in cities, ordered imports and imposed rolling blackouts to deal with shortfalls. Ukraine's state-run Naftogaz energy firm reported the attack on the gas storage site (UGS), but added that gas supplies to consumers had not been affected. Naftogaz CEO Oleksiy Chernyshov said equipment damaged in the strike was being repaired. "The situation will not critically impact the UGS operations since the gas is stored deep underground," Chernyshov wrote on Facebook. President Volodymyr Zelenskiy said efforts to restore power supplies were under way in various regions, with the greatest difficulties in Kharkiv, Ukraine's second-largest city. The country's energy ministry and distributors said Ukraine ramped up imports of electricity and halted exports after the recent series of Russian attacks, in which top energy producer DTEK lost 50% of its capacity. Volodymyr Kudrytskyi, head of Ukrenergo, which operates Ukraine's transmission lines, said the latest wave of strikes had caused damage of at least 90 million euros ($97 million). Russia attacked Ukrainian generating and transmission facilities on Friday, causing significant blackouts in many regions, and energy facilities in three Ukrainian regions were also attacked early on Sunday. POWER CUTS, ROLLING BLACKOUTS Zelenskiy, in his nightly video address on Sunday, said more than 200,000 residents of Kharkiv, a frequent target of Russian attacks, were without reliable power. The network had been restored elsewhere, he said. Zelenskiy said "strict schedules" for power use were in force in Kharkiv. DTEK, the biggest private power company, said rolling blackouts had been imposed in the port of Odesa. Odesa regional governor Oleh Kiper, in a posting just after midnight on the Telegram messaging app, said parts of the city were without power after damage to infrastructure caused by a new night-time drone attack. Emergency services were on the scene, but he gave no further details. The energy ministry said in a statement: "For the current day, electricity imports are forecast at 14,900 megawatt hours (MWh). No exports are expected." Ukraine imported 3,300 MWh a day before the attack on March 22, with exports of 2,148 MWh. "Losses (from Friday's attack) have already been assessed and the DTEK group has lost 50% of its generating capacity, we can say this information officially," Serhiy Kovalenko, the head of distribution firm Yasno, said on national television. Kovalenko said Russia had attacked two parts of the energy system - generation and distribution, hitting both thermal and hydropower plants. "The enemy hit hard at grid nodes and transformers," he said. The ministry said that Russia had attempted on Sunday to hit a critical energy infrastructure facility in the Lviv region in western Ukraine. "Equipment caught fire and the facility was de-energised. There were no casualties," the ministry said. The head of the Lviv region's military administration, Maksym Kozytskyi, later said firefighters had taken most of the day to bring the blaze under control. The ministry said that power lines in the Kyiv region were damaged and 1,400 households in two settlements had lost power. Naftogaz's Chernyshov said his company was currently working on localising and eliminating the impact of the Russian attacks. Most of Ukraine's gas storage capacity is in the western part of the country and it is able to store around 30 billion cubic metres of gas. The Reuters Power Up newsletter provides everything you need to know about the global energy industry. Sign up here. https://www.reuters.com/business/energy/ukraine-boosts-power-imports-after-russian-attack-losing-generation-capacities-2024-03-24/

2024-03-24 10:04

March 24 (Reuters) - China Petroleum & Chemical Corp (600028.SS) , opens new tab, known as Sinopec, reported a 9.9% decline in 2023 net profit on Sunday, weighed by falling oil and gas prices but supported by recovering fuel demand. The world's largest oil refiner by capacity posted net income of 60.5 billion yuan ($8.37 billion), based on Chinese accounting standards, in a filing to the Shanghai stock exchange. Sinopec faced a "complicated operating environment and intense competition" last year, it said in a statement to Reuters. That was slightly worse than 2022, when the company recorded a 6.9% decline in net income as COVID-19 curbs hit fuel and chemicals demand. Aviation fuel and gasoline, however, led a post-pandemic demand recovery last year as passenger air traffic surged and people drove more in China. The state oil and gas major's gasoline sales rose 14.3% and diesel 6.4%. Aviation fuel sales expanded by 49.5%. The figures include sales into the domestic market as well as exports. Refiners in 2023 cashed in robust export profits with strong growth in overseas shipments of diesel and jet fuel. Refinery throughput rose 6.3% last year to a record 257.52 million metric tons, or about 5.15 million barrels per day. The company forecast a rise to 260 million tons this year. Sinopec expects its crude oil production to dip to 279.06 million barrels this year from 280.23 million barrels in 2023, while natural gas rises to 1,380 billion cubic feet from 1,292 billion cubic feet. Its petrochemical business, however, remained lacklustre with sales of chemical fibres and plastics down 1.8%. Sinopec plans capital spending of 173 billion yuan this year to cover key investments such as exploration and development, down from 176.8 billion yuan last year. The Reuters Power Up newsletter provides everything you need to know about the global energy industry. Sign up here. https://www.reuters.com/business/energy/sinopecs-2023-net-income-falls-99-complicated-environment-2024-03-24/

2024-03-24 07:07

LONDON, March 24 (Reuters) - A year after the closure of the Iraq-Turkey oil pipeline, the conduit that once handled about 0.5% of global oil supply is still stuck in limbo as legal and financial hurdles impede the resumption of flows, three sources told Reuters. About 450,000 barrels per day of crude once flowed through Iraq's northern oil export route via Turkey, and its closure has led to the loss of roughly $11 billion to $12 billion for Iraq, the Association of the Petroleum Industry of Kurdistan (APIKUR) estimates. A restart is not being discussed at the moment, one of the sources with knowledge of the matter told Reuters. Ankara halted flows on March 25, 2023, after an arbitration ruling found it had violated provisions of a 1973 treaty by facilitating oil exports from the semi-autonomous region of Kurdistan without the consent of the Iraqi federal government in Baghdad. The court ordered Ankara to pay Baghdad $1.5 billion in damages for unauthorised exports between 2014 and 2018. A second ongoing arbitration case covers the period from 2018 onwards. The countries remain embroiled in a protracted legal tussle, two sources familiar with litigation said. Meanwhile, Iraq owes Turkey minimum payments as long as the pipeline is technically operational - estimated by consultancy Wood Mackenzie at around $25 million per month - as part of the treaty, in theory providing an incentive to restart flows. But with Iraq deepening oil export cuts as part of OPEC+'s broader mission to support oil prices, a resumption of northern flows is not on the agenda, two sources told Reuters. POLITICAL LANDSCAPE Geopolitical factors are also a stumbling block. The Iraqi government's strained relations , opens new tab with the Kurds, a feature of Iraq's political landscape since Saddam Hussein was toppled in the 2003 U.S.-led invasion, have recently soured further. The United States, which would benefit from the pipeline restart lowering oil prices, has also made a handful of attempts to help broker a deal, said Michael Knights, an Iraq expert at the Washington Institute think-tank. But with war raging in Ukraine and Gaza, the U.S. government is spread thin, he said. "They've tried to fix this problem about five or six times. And they're tired of it." The U.S. State Department did not respond to a request for comment. Also key to any restart deal are the international oil companies operating in the Kurdistan region, who were forced to halt exports as a result of the pipeline closure. Instead, they can only sell oil locally in Kurdistan at a significant discount. With more than $1 billion collectively owed in overdue payments for oil delivered between October 2022 and March 2023, according to APIKUR, the group continues to push for compensation in line with their contracts. The companies have also collectively lost more than $1.5 billion in direct revenue since the closure, the group said. Despite several meetings, neither APIKUR nor its members have received any formal proposals or agreements from Iraqi or Kurdish officials that would lead to a resumption of exports, an APIKUR spokesperson said. The Reuters Power Up newsletter provides everything you need to know about the global energy industry. Sign up here. https://www.reuters.com/business/energy/year-after-iraq-turkey-pipeline-halt-no-progress-resume-flows-2024-03-24/