DJI - NEW YORK, Feb 5 (Reuters) - Global
equity markets and oil prices bounced back on Tuesday after data showed the
vast U.S. services sector extended a three-year expansion in January, while
business activity in the euro zone showed signs of recovery.
U.S. and European stocks rallied,
with the S&P 500 and Nasdaq gaining more than 1 percent, recouping most of
their losses after a sharp sell-off the previous session that was sparked by
renewed worries about the euro zone crisis.
A measure of world equity markets
also was higher, though only slightly, because of a decline in emerging market
shares.
Strong fourth-quarter earnings and
signs of improving economic growth suggested the trend for equities remains
higher.
"Yesterday was the first real
down day of the year, which shows that we are in this strong bull market. Today
we are back to the normal pattern. People are realizing that we've over-reacted
to Europe yesterday," said Uri Landesman, president of hedge fund Platinum
Partners in New York.
The Institute for Supply Management
said its U.S. services sector index eased slightly, to 55.2 last month from
55.7 in December. The reading was in line with economists' forecasts, according
to a Reuters survey.
In Europe, Markit's Eurozone
Composite PMI, based on business activity across thousands of companies and a
good gauge of economic growth, rose in January to a 10-month high of 48.6 from
47.2 the previous month.
The day's data bolstered the view
that the world economy was improving, a sentiment that has lifted stock markets
around the globe and pushed the benchmark U.S. S&P 500 to a fresh five-year
intraday high on Tuesday.
Corporate results also helped the
rally. With 56 percent of S&P 500 companies reporting, 68.7 percent posted
earnings that beat expectations, or better than the 65 percent rate over the
past four quarters or the 62 percent pace since 1994.
The Dow Jones industrial average closed up 99.22 points, or 0.71 percent, at 13,979.30. The Standard &
Poor's 500 Index rose 15.58 points, or 1.04 percent, at
1,511.29. The Nasdaq Composite Index gained 40.41 points, or 1.29 percent, at 3,171.58.
"We do not envisage prices
receding for any great length of time," said Carsten Fritsch, an analyst
at Commerzbank. "The supply-side risks still prevailing, shrinking OPEC
supplies and the brightening global economic outlook all suggest that such a
retreat is unlikely."
The euro rose against the dollar and
yen, returning to its months-long trend of appreciation, as
better-than-expected euro zone data affirmed expectations that the European
Central Bank will keep policy steady when it meets this week.
NYMEX - SINGAPORE, Feb 5 (Reuters) - U.S.
crude slipped on Tuesday to trade near $96 per barrel as traders booked profits
on renewed euro zone worries following signs of political uncertainty in the
troubled region, while a slightly firmer dollar also hurt prices.
CBOT Soybean - Soybean futures on the Chicago Board of Trade rose for a
third
session on Tuesday, buoyed by uncertainty about crop weather
in
Argentina, traders said.
·
Some
midday weather forecasts for Argentina's crop belt looked warmer and drier,
raising concern about crop stress in the world's No. 3 soy producer.
·
Crop
weather in Brazil remains mostly favorable but rains are expected to slow the
harvest in Mato Grosso this week.
·
Brazil's
vegetable oils association Abiove raised its soy crop forecast to a record 82.3
million tonnes from 81.6 million in December. The adjustment came a day after
Brazilian analytical firms AgRural and Celeres both lowered their forecasts for
the crop.
·
Canadian
canola supplies dropped to a six-year low as of Dec. 31, highlighting a
disappointing crop and strong demand for oilseeds, a Statistics Canada report
said.
·
A group of
Paraguayan farmers asked the courts to stop U.S. biotech company Monsanto from
charging royalties for use of its genetically modified soybeans in the world's
No. 4 soy exporter. The farmers were inspired by a similar case in neighboring
Brazil.
FCPO - SINGAPORE, Feb 5 (Reuters) -
Malaysian palm oil futures eased on Tuesday on profit-taking after four
straight sessions of gains, but hopes of better-than-expected inventory and
export data next week limited losses.
Persistent concerns over dry weather
in South America and its impact on the soy crop there also kept a floor under
palm oil prices. Lower soybean oil production could shift some demand to the
cheaper palm oil, which in turn may help ease record stocks for the tropical
oil.
"We are revising our January
inventory forecast to 2.57 million tonnes from 2.66 million tonnes as we
believe that exports in the month may have turned out better than expected at a
7 percent decline as compared to our earlier estimate of an 11 percent
decline," Alan Lim Seong Chun, research analyst with Malaysia's Kenanga
Investment Bank, said in a note.
"Although we believe the
overall data will be positive on prices, the upside should still be limited in
view of the still high inventory level at way above 2 million tonnes."
January palm oil stocks data from
the Malaysian Palm Oil Board is due on Feb. 13. Inventory levels in the world's
No.2 producer hit an all-time high of 2.63 million tonnes in December.
Traders are also eyeing Feb. 1-10
export data after a better-than-expected performance in January.
By the close, the benchmark April
contract on the Bursa Malaysia Derivatives Exchange
had shed 0.7 percent to 2,549 ringgit ($826) per tonne, after adding almost 5
percent in the last four sessions.
It rose to 2,592 ringgit the
previous day, just slightly off a 3-month high touched on Thursday.
Total traded volumes stood at 25,536
lots of 25 tonnes each, slightly higher than the average 25,000 tonnes.
In other markets, oil edged higher
above $115 a barrel on Tuesday as investor concerns faded about political risks
in the euro zone, although ample supply could hinder its chances of extending a
three-week rally.
In competing vegetable oil markets,
U.S. soyoil for March delivery eased 0.1 percent in late Asian trade, giving up some gains from the previous
sessions.
The most active September soybean
oil contract on the Dalian Commodity Exchange also
edged lower, coming off the previous day's three-month high.
Regional Equities - BANGKOK, Feb 5 (Reuters) - Southeast
Asian stock markets ended mostly lower on Tuesday as weaknesses in broader Asia
prompted profit-taking, with Singapore falling to a one-week low while
Indonesia ending off record high after weaker-than-expected fourth quarter GDP
data.
Singapore's Straits Times Index was down 0.8 percent at 3,272.66, the lowest close since Jan. 29, matching a
0.9 percent fall in the MSCI's broadest index of Asia-Pacific shares outside
Japan
Jakarta's Composite index eased 0.3 percent to 4,479.44, climbing at one point to an intraday record of
4,492.53 and after Monday's record finish of 4,490.57.
Stocks in Malaysia and Thailand
recouped most of their early losses amid late buying into battered energy names
such as PTT Pcl and Petronas Gas Bhd
Malaysia's index edged down 0.07 percent to 1,633.35 and Thai index eased 0.04 percent to 1,505.72. The Philippines pared early losses to rise 0.5 percent to 6,470.49, topping Monday's record
finish of 6,435.98.
Valuations of some Southeast Asian
blue chips has recently increased amid optimism about 2013 earnings growth.
"Last week, MSCI Thailand 2013
consensus earnings growth estimates were revised up the most by 35 basis
points, followed by MSCI Singapore by 3 bps," Morgan Stanley Research said
in its ASEAN weekly chartbook dated Feb. 1.
"During the last one month, PER
for Indonesia has increased the most, by 3 percent... MSCI Thailand is
currently trading at 16 percent premium to its 7-year average at 12.0x,"
it said.
