· UBS reports a 137% jump in profit, but has concerns over economic recovery
UBS, the world’s largest wealth manager, has reported net income of $1.71 billion for the fourth quarter of 2020, a 137% jump on the year before.
Double-digit profit growth in UBS’ wealth management and asset management division contributed to the quarterly performance.
However, despite beating analyst expectations with its results, UBS was cautious on the economic outlook.
· Asian stocks post biggest fall in two months on U.S. stimulus worries
Asian stocks fell on Tuesday, retreating from record highs as lingering concerns about potential roadblocks to the Biden administration’s $1.9 trillion stimulus weighed on sentiment, dragging U.S. Treasury yields to three-weeks lows.
The lower risk appetite lent some support to the dollar against a basket of currencies, while oil prices edged down.
EUROSTOXX 50 futures eased 0.1% while FTSE futures added 0.03%, indicating a mixed open for European stock markets. E-Mini futures for the S&P 500 ESc1 shed 0.5%.
MSCI’s broadest index of Asia-Pacific shares outside Japan shed 1.5% to 717.3 but was not far off a record high struck on Monday and is still up 8% so far this year. The index was on course to log its biggest fall since late November.
· Japan shares end lower on vaccine delay, caution ahead of earnings season
Japanese shares closed lower on Tuesday as worries about delays in distributing coronavirus vaccines, delay in U.S. stimulus package and jitters before earnings season triggered profit-taking.
The Nikkei 225 Index ended down 0.96% at 28,546.18 points, with consumer cyclicals, energy and materials makers leading the decline. The broader Topix fell 0.75% to 1,848.00.
The United States has struggled to ramp up vaccinations, European countries are facing delays from suppliers, and Japan is yet to start vaccinations, which is weighing on investor sentiment.
In addition, Merck & Co Inc has ended development of its COVID-19 vaccines, raising additional concern about a lack of supply.
Japanese shares jumped to a 30-year high last week, but a busy earnings calendar in the United States and Japan this week, as well as a Federal Reserve meeting ending Wednesday, is prompting investors to take profits.
· China shares end lower amid speculation of policy tightening
China’s blue-chip stock index fell on Tuesday, marking its biggest daily loss since September after touching a 13-year high in the previous session, amid tightening liquidity conditions and Sino-U.S. tensions.
At the close, the Shanghai Composite index was down 1.51% to 3,569.43, its biggest daily drop since Dec. 22.
The blue-chip CSI300 index tumbled 2.01%, its biggest one-day loss since Sept. 9.
Financial firms came under pressure against a backdrop of tightening liquidity conditions. Short-term rates jumped to pre-COVID levels on Tuesday, with some investors speculating that the central bank might adopt a tightening bias in its monetary policy.
China-U.S. relations continue to weigh on sentiment. China said on Tuesday it will conduct military exercises in the South China Sea this week, just days after Beijing bristled at a U.S. aircraft carrier group’s entry into the disputed waters.
· Tencent falls over 5% after hitting an all-time high that pushed it close to a $1 trillion valuation
Tencent shares dropped more than 5% on Tuesday — one day after a huge rally pushed its valuation to nearly $1 trillion for the first time.
The Chinese internet giant saw its shares hit as high as 767.5 Hong Kong dollars on Monday, rallying 11% at one point. That pushed the company’s market capitalization to 7.35 trillion Hong Kong dollars ($949 billion) on Monday.
· Hong Kong stocks off to a ‘very strong start’ in 2021 — thanks to China investors, Goldman says
Strong mainland Chinese investor interest has propelled stocks in Hong Kong to a “very strong start” in 2021, according to Goldman Sachs’ Timothy Moe.
As of Monday’s close, the Hang Seng index is up more than 10% so far this year. In comparison, the Shanghai composite on the mainland has gained about 4.35% while the Shenzhen component has also advanced around 8.57%.
“The amount of money coming in (to Hong Kong) is a record high,” Moe, co-head of Asia macro-research and chief Asia-Pacific regional equity strategist at the investment bank, told CNBC’s “Street Signs Asia” on Friday.
The top five most actively traded Hong Kong-listed stocks by mainland investors in January as of Monday were: tech juggernaut Tencent, on-demand delivery services firm Meituan, China’s largest chipmaker SMIC, telco China Mobile and electronics maker Xiaomi — according to a tally by CNBC based on data from Hong Kong Exchanges and Clearing.
Among those companies, China Mobile, SMIC as well as Xiaomi have been blacklisted by Washington for their alleged military ties.
· European markets open mixed with Italian politics, vaccine challenges in focus
European stocks opened in mixed territory on Tuesday, with investors focusing on an emerging battle between vaccine maker AstraZeneca and the EU, and on political uncertainty in Italy.
The pan-European Stoxx 600 hovered fractionally above the flatline in early trade, with chemicals adding 1.1% while travel and leisure stocks dropped 0.9%.
Reference: CNBC, Reuters
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