News with Tags "percent"

NEW YORK (Reuters) - Stocks added to gains in afternoon trading on Tuesday, pushing the Nasdaq up more than 1 percent, as investors were optimistic about the outlook for the Federal Reserve's economic stimulus policies.

The Dow Jones industrial average <.dji> was up 153.55 points, or 1.01 percent, at 15,333.40. The Standard & Poor's 500 Index <.spx> was up 14.37 points, or 0.88 percent, at 1,653.41. The Nasdaq Composite Index <.ixic> was up 35.12 points, or 1.02 percent, at 3,487.25.

(Reporting by Caroline Valetkevitch; Editing by Kenneth Barry)

By Joel Dimmock

LONDON (Reuters) - Emerging markets are suffering a sharp pullback by investors fearful of a shock from China just as confidence in the world economy, and the euro zone in particular, rises, according to a survey of fund managers.

The monthly poll from Bank of America Merrill Lynch, published on Tuesday, showed that allocations to global emerging market equities in June hit their lowest level since December 2008, with a net nine percent of respondents now underweight.

A net 48 percent of fund managers reported an overweight position in equities overall, up from 41 percent in May and back above the 47 percent level seen in April.

The survey, which polled 248 managers with $708 billion in assets, found that a net 25 percent placed emerging markets as the region they would most like to underweight in the coming 12 months, the lowest ever reading.

Last week, emerging markets stocks posted their fifth straight week of losses.

The fears over China come after a Reuters poll on Tuesday signaled more optimism among equity analysts, and Michael Hartnett, chief investment strategist at BofA Merrill Lynch Global Research, reckoned the survey response looked overdone.

"The lows in emerging market equity and commodity allocations suggest the market has over-positioned itself for a shock from China," he said. China was considered the greatest tail risk among those polled, followed by a potential failure of stimulus measures in Japan.

Allocations to commodities reached a record low with a net 32 percent of those surveyed holding underweight positions.

Manish Kabra, equity strategist at Bank of America Merrill Lynch, outlined the implications of what looks like a disconnect.

"It's the sentiment that is running out of anything that is linked to emerging market or the commodity cycle. If China actually surprises on the upside in the coming months there is a big bounce ready to come," Kabra said.

The emerging markets gloom stood in contrast to signs of renewed confidence in prospects for the euro zone, where a net six percent of those polled are now overweight equities. That represents a 14 point swing from the underweight position from May.

The numbers are most stark among local players, with a net 45 percent of European respondents expecting the economy to strengthen in the coming year, close to double last month's result.

"First of all, expectations have been very low ... Anything that is based on mean reversion... cannot be bad forever, then Europe is the place that is more likely to show upside surprises," said Kabra.

(Additional reporting by Franceso Canepa; editing by Mark Heinrich)

By Ayai Tomisawa

TOKYO (Reuters) - Japan's Nikkei will rise 51 percent in 2013 on expectations of higher company earnings, driven by a weaker yen after Prime Minister Shinzo Abe embarked on radical fiscal and monetary expansionary policies to spur growth, a Reuters poll showed,

A gradual economic recovery in the United States, Japan's biggest export market, will also help reignite buying in Japanese stocks after a bout of selling in recent weeks pushed the benchmark index briefly into bear market territory.

The Nikkei <.n225> is expected to rise to 15,700 points by the end of 2013, which would mark its biggest annual percentage rise since 1972, according to the median forecast of 18 analysts polled by Reuters in the past week.

That compared with Monday's close of 13,033.12.

The previous poll in March had predicted that the index would reach 14,000 by end-2013.

"Abenomics' first arrow, or monetary easing, has been successful as it has fixed the excessively strong yen, and as a result it will lift company profits," said Masayuki Kubota, senior fund manager at Daiwa SBI Investments.

Abe's push to reflate the world's third-largest economy, dubbed "Abenomics", has revived foreign investors' interest in Japanese markets.

But the Nikkei suffered a sharp correction in recent weeks, with the index falling to as low as 12,415.85 last week, a level not seen before the Bank of Japan announced sweeping monetary easing in early April as investors worried the U.S. Federal Reserve would soon begin to taper back its massive stimulus program.

The index was also looking overbought on a technical basis, after rallying more than 80 percent from mid-November to a 5-1/2 peak on May 23.

Kubota added that Abe's so-called "third policy arrow", which includes participation in the Trans-Pacific Economic Partnership trade talks, will serve as a long-term growth strategy.

"The third arrow is overlooked as it has no immediate impact. But expanding exports means a lot to the economy, and it should have a positive impact in the long term," he said.

Market observers said investors would continue buying into exporters such as autos and machinery companies, whose earnings are expected to rise this fiscal year ending March, helped by a weaker yen, which boosts companies' competitiveness overseas and their earnings when repatriated.

"Most companies base their earnings on the assumption that the dollar will trade between 90-95 yen. We based our assumption at 100 yen to the dollar, but even at 95 yen, a lot of them can still post record profits," said Hiromichi Tamura, chief strategist at Nomura Securities, who expects the Nikkei to hit 18,000 by the end of the year.

By mid-2014, the Nikkei is expected to rise only slightly more to 16,000, according to the poll.

Risks include a steep rise in the long-term interest rate, which could spur fears about higher mortgage loan interest rates, possibly hurting real estate and bank shares and dampening sentiment.

Analysts noted that next year's planned consumption tax hike could also be a risk, which could hurt consumer spending.

"An adverse effect from the weaker yen will likely surface in the fall or the winter," said Makoto Kikuchi, the chief executive of Myojo Asset Management, adding that rising material prices could hurt companies' bottom-lines, while higher consumer prices could impact family finances.

(Editing by Kim Coghill)

By Sumanta Dey

BANGALORE (Reuters) - China and other East Asian stock markets will be able to shrug off recent turmoil and post some gains in 2013 on hopes of an economy recovery, policy easing in the second half of the year and attractive valuations, a Reuters poll showed on Tuesday.

Fears that the U.S. Federal Reserve may soon start rolling back its stimulus programme caused large outflows of investor money from emerging Asian stock markets in recent weeks, sending most Asian indexes, except Taiwan's Taiex, into the red.

Indeed, the rout sent valuations in China, Hong Kong, South Korea and Taiwan below their 5-year average, as measured by their 12-month forward price-to-earnings ratios, according to Thomson Reuters data.

But equity analysts polled by Reuters between June 10-17 said those markets would claw back those losses, and gains from now until the end of the year would range anywhere between 7 percent in Taiwan to 11 percent in Shanghai and as much as 13-14 percent in Hong Kong and South Korea.

Still, most analysts were caught off-guard by the recent sharp plunge in stocks and earlier estimates of double-digit gains for 2013 have now been scaled back sharply.

"Markets will continue to speculate when the U.S. Federal Reserve will start to taper its quantitative easing, but I don't think the Fed will act anytime this year," said Linus Yip, strategist at First Shanghai Securities.

The Fed's latest two-day policy meeting ends on Wednesday and markets will be keen for fresh guidance on when it would begin withdrawing its stimulus support, especially after recent jobs and housing data showed the world's largest economy appeared to be on a stable recovery track.

Notwithstanding the risk of stimulus tapering, equity strategists, usually a bullish lot, have again predicted almost double-digit gains from now until mid-2014 for stock indexes in China, Hong Kong, South Korea and Taiwan.

The Shanghai SSE composite index is expected to end the year at 2,400 points, representing a rise of around 11 percent from current levels and a full-year gain of nearly 6 percent.

It is then expected to climb to 2,500 by June next year.

"China's economy is likely to recover gradually, lending support to the stock market. However, the rise would be limited in the second half, curbed by resumption of IPOs and tighter liquidity," said Dongguan Securities Co strategist Pan Shaochang.

Analysts said soft Chinese economic data, sluggish corporate earnings and the People's Bank of China's reluctance to inject funds into interbank markets despite a cash shortage have contributed to pulling down stock indexes in Hong Kong and mainland China.

But attractive valuations could bring the shine back on these stocks.

The Shanghai SSE composite index and Hong Kong's Hang Seng index (.HSI) are currently trading at over 9 times their 12-month forward earnings projections, way lower than their 10-year average of over 15 percent and 13 percent, respectively.

The Hang Seng is predicted to reach 24,000 by end-2013, according to the poll. That would translate into a rise of more than 13 percent from current levels and a full-year gain of close to 6 percent.

The index was seen hitting 24,500 by mid-2014.

SOUTH KOREA, TAIWAN STOCKS TO SURGE

South Korea's key share index also is seen making firm gains in the second half of the year, led by domestic consumption stocks and technology heavyweights on expected signs of improvement in both domestic and global economies and companies' earnings.

The median forecast was for the benchmark Korea Composite Stock Price Index (KOSPI) to rise 14.2 percent to 2,150 points by the end of this year from Monday's close of 1,883.1 points. That would mark a gain of close to 8 percent for the full year.

"We expect market fundamentals including economic health and corporate earnings to improve in the second half of this year," said Cho Yong-hyun, market analyst at Hana Daetoo Securities in Seoul.

Meanwhile, Taiwan's TAIEX is expected to end the year at 8,550 points, little changed from earlier expectations, but up 4 percent from current levels and 11 percent higher than its 2012 close of 7699.5.

Shares in Taiwan have weathered the recent turmoil better than their peers in the region largely due to a more resilient electronics and diversified semi-conductor market that relies on demand from global technology giants such as Apple Inc.

(Polling by Chen Yixin and Samuel Shen in SHANGHAI, Yimou Lee and Clement Tan in HONG KONG, Jung Youn Park in SEOUL, Carol Lee in TAIWAN, Ashrith Doddi and Snehashish Das in BANGALORE; Editing by Kim Coghill)