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Asian stocks hold gains, dollar strong on Fed official comments


Uber posts $509 mln adjusted loss on driver incentives even as trips rise

Aachen, Germany, September 2019: Uber driver holding his smartphone in car. Uber is an American company offering different online transportation services

Uber Technologies Inc (UBER.N) on Wednesday reported widening losses as it spent more to entice drivers to return to its platform, sending shares of the ride-hail and food delivery company down in after-hours trade.

Investors sold the shares despite Uber management’s assurances that the company can deliver a sharp turnaround in profitability even as New York and other major cities reimpose some pandemic restrictions.

Uber posted an adjusted $509 million second-quarter loss before interest, taxes, depreciation and amortization – a metric that excludes one-time costs, including stock-based compensation – widening losses by nearly $150 million from the first quarter.

Analysts on average had expected the company to report an adjusted EBITDA loss of around $324.5 million, Refinitiv data showed.

Shares were down 5% in after-hours trading after closing the regular session down 2.2%.

The company also warned investors that uncertainty from the Delta variant of the coronavirus continues to impact visibility into recovery.

But Uber Chief Executive Dara Khosrowshahi told analysts on a conference call that the company’s food delivery business provided a hedge against potential ride-hail declines and that July trends support the company’s confidence for the second half of the year.

Gross bookings during the second quarter reached an all-time high of nearly $22 billion, with more passengers returning for trips while food delivery orders also increased.

Nevertheless, the earnings call was dominated by questions over driver supply and the ongoing impact of the pandemic.

Full coverage: REUTERS 

DBS bets on rebounding economy, profit jumps on lower credit costs

Singapore’s DBS Group Holdings (DBSM.SI) flagged strong loan growth and weaker credit costs after posting a 37% jump in quarterly net profit, as Southeast Asia’s largest lender benefited from a rebound in its mainstay home market.

The bank joined local peers OCBC (OCBC.SI) and United Overseas Bank (UOBH.SI) in beating market estimates but the sector’s sequential performance slowed sharply, underscoring challenges to maintaining growth. 

“Overall numbers were ok considering net interest margins have fallen over 40 basis points from pre-COVID levels as rates fell, with the fee side largely expected,” said Kevin Kwek, a senior analyst at Stanford C. Bernstein, commenting on DBS.

DBS shares rose as much as 1.2% to a record S$30.95 in a flat market. The stock is up 23% so far this year.

Full Coverage: REUTERS 


Asian stocks hold gains, dollar strong on Fed official comments

Asian shares held on to recent gains in morning trading on Thursday, despite hawkish remarks from a senior official at the U.S. Federal Reserve, that boosted the dollar while weighing on risk appetite, and uncertainty about Chinese policy.

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose 0.22%, and Japan’s Nikkei (.N225) climbed 0.32%.

Australia (.AXJO) gained 0.18%, Chinese blue chips (.CSI300) fell 0.28% and Hong Kong (.HSI) advanced 0.45%.

This week the MSCI Asian regional benchmark has walked back most of the ground lost a week earlier, when a series of Chinese regulatory crackdowns in sectors from property to education squeezed Chinese stocks and overshadowed the region as a whole. 

Chinese equities have been calmer this week, barring sharp swings in tech giant Tencent (0700.HK) after state media criticised the gaming industry. 

“In the short term, the further rebound may continue but uncertainties over policy control will drive long-term investors away from Chinese technology names,” said Edison Pun, senior market analyst at Saxo Markets.

Pun also pointed to remarks about the electronic cigarette business in state media Wednesday, which he said may also bring pressure to related stocks. 

U.S. stocks closed mostly lower on Wednesday, with the S&P 500 (.SPX) receding 0.46% from a record high. The blue-chip Dow (.DJI) slid 0.92%, though the tech heavy Nasdaq (.IXIC) eked out small gains with investors there attaching greater weight to positive data from the services sector than to negative jobs figures.

U.S. stock futures – the S&P 500 e-minis – edged up 0.2% in Asian trading.

Markets are looking at the “mixed signals from the data, and trying to assess what the Fed will do,” said Kyle Rodda, an analyst at IG markets. Rodda said the latest moves were driven by an overnight speech from Fed Vice Chair Richard Clarida which took a more hawkish tone.

Full coverage: REUTERS 

Oil prices rise on Mideast tensions; crude stock build caps gains

Oil prices edged higher on Thursday, supported by tensions in the Middle East, but failed to regain most of the previous day’s losses after a surprise build in crude stockpiles in the United States, the world’s top oil consumer.

Brent crude oil futures rose by 14 cents, or 0.2%, to $70.52 a barrel by 0132 GMT, while U.S. West Texas Intermediate (WTI) crude futures increased by 18 cents, or 0.3%, to $68.33 a barrel. Both benchmarks fell by more than $2 a barrel on Wednesday.

Israeli aircraft struck what its military said were rocket launch sites in south Lebanon early on Thursday in response to earlier projectile fire towards Israel from Lebanese territory. 

Two rockets launched from Lebanon on Wednesday struck Israel, which initially responded with artillery fire amid heightened regional tensions over an alleged Iranian attack on an oil tanker in the Gulf last week. 

Full coverage: REUTERS 

Dollar firms as Fed members talk of tightening

The dollar was poised to push higher on Thursday as hawkish comments from the US Federal Reserve led markets to bring forward the likely timing of a policy tightening there, while action in Europe and Japan remain distant prospects.

The euro was down at $1.1837 , having recoiled from a top of $1.1899 overnight and marking another failure to crack resistance around $1.1910.

The dollar also bounced to 109.51 yen , from a trough of 108.71 on Wednesday, negating what had been a bearish break on the downside.

The rally came after Fed Vice Chair Richard Clarida said conditions for an interest rate hike could be met in late 2022, setting the stage for a move in early 2023. 

He and three other Fed members also signaled a move to taper bond buying later this year or early next depending on how the labor market fared in the next few months.

Full coverage: REUTERS 

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