US markets
US equities lost ground on Tuesday as investors sought to lock in gains in the absence of any major positive market-moving catalysts. The bellwether S&P 500 and the blue-chip Dow Jones Industrial Average both dropped 0.2 percent, while the tech-heavy NASDAQ slipped 0.6 percent.
Minutes from the Federal Reserve (Fed)’s latest policy meeting showed no major surprises. Officials agreed that the central bank was in a position to proceed carefully and that interest rate decisions at every meeting would continue to be based on the totality of incoming data and its implications for the economic outlook as well as the balance of risks. They noted that further tightening would only be needed if information suggested insufficient progress in bringing inflation back to its target.
Most of the S&P sectors finished lower, with information technology, real estate and consumer discretionary declining the most, while health care, materials, and consumer staples held up best. Semiconductor shares retreated, with chip giant NVIDIA sliding 0.9 percent ahead of its quarterly report due after the closing bell. Retailers fell on the back of some disappointing corporate results. Home improvement chain Lowe’s tanked 3.1 percent after forecasting a larger-than-expected decline in annual comparable sales and lowering its full-year profit guidance. Likewise, electronics retailer Best Buy dipped 0.7 percent after projecting a bigger drop in annual comparable sales, while department store Kohl’s tumbled 8.6 percent after third-quarter sales fell short of estimates.
These price data reflect observations at market close: WTI spot crude oil lost US$1.01 to US$77.42, while spot gold gained US$28.15 to US$2,002.55. The US dollar fell vs. major currencies. The US Treasury 30-year bond yield and the 10-year note yield were little changed at 4.58 percent and 4.42 percent, respectively.
European markets
European equities faced slight downward pressure on Tuesday. Investors cautiously awaited the highly anticipated minutes of the US Fed’s last meeting later in the day, seeking more clues on the direction of monetary policy. The Europe-wide STOXX eased 0.1 percent, the UK FTSE 100 and the French CAC 40 slipped 0.2 percent each, while the German DAX ended marginally lower.
Nearly all the Europe-wide STOXX sectors ended in negative territory, with real estate, energy, consumer discretionary and utilities making up the worst-performing group. However, there were some bright spots in consumer staples and healthcare sectors. Italian stocks lagged behind their regional peers, mainly due to negative sentiment surrounding banks. Monte dei Paschi di Siena sank 7.9 percent after Italy sold a 25 percent stake in the bailed-out bank to advance the re-privatization plans. Peers Banco BPM lost 4.0 percent after Deutsche Bank downgraded it to ‘hold’ from ‘buy’ and removed it from its top picks of European banks. Among other stocks, TeamViewer tumbled 12.4 percent after TigerLuxOne (Permira), the largest shareholder of the company, successfully placed 13 million shares in the German software company with institutional investors at a discount of about 8 percent to Monday’s closing price. LVMH shed 1.9 percent after UBS downgraded the French luxury giant to ‘neutral’ from ‘buy’.
Asia Pacific markets
Asian equities showed mixed performance on Tuesday.
Mainland China’s equities struggled for direction as optimism tapered off on expectations that there won’t be strong stimulus early next year. The CSI 300 index edged up 0.1 percent, while the Shanghai index ended flat. Real estate stocks advanced following reports that regulators are drafting a list of 50 property developers eligible for a range of financing. Hong Kong’s equities pared early gains to seesaw lower, with the Hang Seng index down 0.2 percent.
Japanese stocks extended losses from the previous session, with the Nikkei index off 0.1 percent and the broader TOPIX down 0.2 percent. Markets were pressured by export-oriented automakers, as the yen appreciated against the US dollar. The yen’s strength will hurt the price competitiveness of Japan-made products abroad, and overseas profits of exporters would be reduced when they repatriate them to Japan. Toyota Motor sank 1.6 percent, Honda Motor fell 2.2 percent, and Mazda Motor shed 4.5 percent. Conversely, technology shares tracked their US peers higher, with semiconductor-related Advantest and Tokyo Electron gaining 2.9 percent and 1.1 percent, respectively.
Taiwan’s TAIEX jumped 1.2 percent. South Korea’s KOSPI gained 0.8 percent. Indian equities snapped a two-session losing streak, with the BSE Sensex index closing up 0.4 percent, led by a rebound in financials.
Australian shares built on last session’s rebound, with the All Ordinaries rising 0.3 percent. However, gains were capped by minutes from the Reserve Bank of Australia’s latest policy meeting, which showed persistent concerns over rising prices and indicated the possibility of another rate hike. Mining stocks outperformed amid higher commodity prices. Major miners BHP Group, Rio Tinto, and Fortescue Metals Group rose between 0.7 percent and 1.9 percent. Gold, energy and financial stocks also finished higher.