Foreign Stock Roundup: Eni & BHP Billiton Impress, Barclays & HSBC Disappoint

Global stocks endured significant volatility during a week dominated by the release of the minutes of the Fed’s latest meeting. Investors across Europe chose to focus on earnings numbers and economic data on several occasions. Greater China markets remaining closed for several days due to the Lunar New Year holiday. Brazil’s Bovespa ignored a variety of impediments to post its seventh successive session of gains.

STOXX Endures Volatile Trading

Markets across Europe finished in the red last Monday. Trading volumes remained low even as investors continued to receive fresh earnings numbers. The STOXX 600 lost 0.7% with all sectors expect oil and gas closing in the red. Sluggish volumes were a product of markets remaining closing in Greater China, Mumbai and the United States. Shares of household goods were the heaviest losers, declining 1.4%.

The STOXX 600 gained 0.6% last Tuesday with nearly all major exchanges and sectors finishing in the green. Investors shrugged off volatility concerns, choosing to focus on impressive earnings numbers. The FTSE 100 finished nearly flat, slipping by a mere 0.01%. Meanwhile, the CAC 40 and the DAX increased 0.6% and 0.8%, respectively. Stocks of chemicals companies were the largest gainers, adding 1.2%.

Stocks across Europe finished in the green last Wednesday even as investors chose to focus on earnings numbers and economic data. The STOXX 600 gained 0.2% even though major sectors and exchanges ended the session mixed. Also, manufacturing and services PMIs for the Eurozone declined in February. Stocks of basic resources companies were the best performers, gaining 1.6%.

Concerns surrounding an increase in pace of rate hikes in the United States led to Europe’s stocks closing marginally lower on last Thursday. Global risk appetite took a beating after such fears came to the fore. The STOXX 600 slipped 0.1% with all major sectors and exchanges closing mixed. The FTSE 100 suffered the most among the leading indexes, losing 0.4%. The CAC 40 and the DAX ended nearly flat.

The STOXX 600 gained 0.2% last Friday with major sectors and exchanges closing mixed once again. Investors awaited a crucial report from the Federal Reserve even as they continued to receive earnings numbers. Stocks of retail companies were the worst losers for the day while auto stocks also suffered to close the day 0.7% lower.

Asia’s Stocks Gain over Holiday-Shortened Week

Stocks across Asia finished in the green on last Monday after the S&P 500 posted a six-day winning streak. Markets across China and Hong Kong remained closed for the Lunar New Year holiday. The Nikkei 225 and Topix gained 2% and 2.2%, respectively. South Korea’s Kospi increased by 0.9% while the ASX 200 overcame early losses to end 0.6% higher.

The region’ stocks finished lower on Tuesday following low trading volumes overnight even as U.S. markets were closed on Monday. The Nikkei 225 declined by more than 1%. The Kospi ended 1.2% lower owing to losses suffered by tech heavyweights. The ASX 200 closed marginally below the flat line. The Hang Seng lost 0.8% even as exchanges in China continued to remain closed for the Lunar New Year holiday.

Volatile trading in Japan’s markets failed to prevents Asia’s exchanges from finishing in the green last Wednesday. The Nikkei 225 gained 0.2% after a particularly choppy session. The Kospi gained 0.6% while the ASX 200 inched up 0.1%. The Hang Seng gained more than 1.6% even as China’s markets continued to be closed for the Lunar New Year holiday.

Losses on Wall Street following the release of the latest Fed minutes led to Asia’s markets closing mixed on last Thursday. The ASX 200 added 0.1% even as the Nikkei and the Topix lost 1.1% and 0.9%, respectively. The Kospi finished 0.6% lower. Chinese markets reopened with strong gains with the Shanghai Composite and the Shenzhen Composite increasing 2.2% and 1.9%, respectively.

Stocks across the region closed in the black on last Friday even as the dollar staged a rebound. The Kospi was the leading gainers among the indexes, advancing by 1.5%. The Nikkei 225 and the ASX 200 increased 0.7% and 0.8%, respectively. The Shanghai Composite gained 0.6% while the Shenzhen Composite added 0.2%.

Bovespa Gains for Seventh Straight Session

Stocks from Brazil gained last Monday even as trading volumes remained low despite a string of corporate developments. The Bovespa increased 0.3%, boosted by shares of Petrobras PBR which gained on the back of an increase in crude prices. Fibria Celulose FBR also moved higher after confirming that it had held discussions over “alternative strategies.”

The Bovespa gained 1.6% last Tuesday despite Brazil’s policymakers jettisoning a plan to cut down on social security expenditure. Analysts opined that markets had already accounted for such a move from Brazil’s Congress.

The index gained last Wednesday, increasing 0.8%. Investors anxiously awaited the minutes of the Federal Reserve’s latest meeting. Last Thursday, the Bovespa finished in the green for the seventh successive session, gaining 0.7%. 

Stocks from Mexico were the key losers from Latin America on last Friday. Disappointing growth data pushed the benchmark index IPC index nearly 1% lower on a day during the region witnessed low trading volumes. The Bovespa slipped marginally, by 0.1%. Losses for Brazil’s benchmark were curbed by stellar results from key stocks. 

Stocks in the News

HSBC Holdings plc HSBC reported fourth-quarter 2017 results wherein it incurred net loss attributable to shareholders of $274 million, which improved from a loss of $4.4 billion in the year-ago quarter. Results included a one-time charge of $1.3 billion related to the U.S. tax reforms and several other non-recurring items. HSBC has a Zacks Rank #3 (Hold).

For 2017, net income attributable to shareholders was $9.7 billion, a significant rise from $1.3 billion recorded last year. Also, pre-tax income of $17.2 billion was up substantially from $7.1 billion in 2016.

Adjusted total revenues of $12.4 billion grew 13% year over year. Increase in all revenue components supported the growth. Adjusted loan impairment charges and other credit risk provisions jumped 41% from the year-ago quarter to $658 million. Adjusted total operating expenses rose 4% from the prior-year quarter to $8.8 billion. (Read: HSBC Incurs Q4 Loss as Costs Rise, Records $1.3B Tax Charge)

Eni S.p.A. E reported fourth-quarter 2017 adjusted earnings from continuing operations of 65 cents per American Depository Receipt/ADR, beating the Zacks Consensus Estimate of 44 cents. The company reported earnings of 26 cents in the year-earlier quarter.

Total revenues in the quarter were €20,881 million, up from €16,154 million in the year-ago period and €15,783 in third-quarter 2017. Total liquids and gas production in the fourth quarter was 1,892 thousand barrels of oil equivalent per day (MBoe/d), up 2% year over year.

Zacks Rank #3 Eni expects Exploration & Production to witness 3% growth in 2018. This will be driven by increase in the number of fields where production started in 2017. The company expects full-year capital spending to be around €8 billion. (Read: Eni Beats on Q4 Earnings Estimates, Guides For 2018)

Barclays BCS incurred fourth-quarter 2017 net loss attributable to ordinary equity holders of £1.3 billion ($1.8 billion). Results included £0.9 billion ($1.25 billion) charges pertaining to the U.S. tax reforms. Net income attributable to ordinary equity holders was £99 million ($131.4 million) in the prior-year quarter.

Net operating income was £4.45 billion ($6.18 billion), up 2.5% year over year. The rise was mainly driven by higher net fee, commission and other income. Operating expenses (excluding U.K. bank levy and litigation and conduct) totaled £3.62 billion ($5.03 billion), declining 5% from the year-ago quarter.

The company targets to achieve return on tangible equity (ROTE) of greater than 9% in 2019 and more than 10% in 2020. Management expects operating expenses (excluding litigation and conduct charges) to be in the range of £13.6-£13.9 billion in 2019.

The company intends to announce dividend of 6.5 pence per share (subject to regulatory approvals) in 2018. The stock has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

America Movil S.A.B. AMX reported disappointing financial results in the fourth quarter of 2017 wherein both the top and bottom line lagged the Zacks Consensus Estimate. America Movil has a Zacks Rank #4 (Sell).

Net loss was $596 million, up a whopping 98% year over year. Quarterly loss per ADR (American Depository Receipt) of 16 cents was in contrast with the Zacks Consensus Estimate of earnings of 14 cents.

Total revenues of approximately $13,917 million highlighted a decrease of 2% on a year-over-year basis missing the Zacks Consensus Estimate of $14,275 million. Total cost and expenses in the fourth quarter decreased 4.9% year over year to $10,218 million. (Read: America Movil Posts Q4 Loss, Revenues Miss Estimates)

BHP Billiton Limited BHP, reported robust financial results for first-half fiscal 2018 (ended Dec 31, 2017). For first-half fiscal 2018, earnings per American Depositary Share (ADS) came in at nearly 76 cents per share, up 25% year over year. BHP Billiton has a Zacks Rank #3.

Revenues for first-half fiscal 2018 totaled $21.8 billion, up from $18.8 billion recorded in the prior-year period. Underlying earnings before interest, taxes, depreciation, and amortization (EBITDA) came in at $11.3 billion for first-half fiscal 2018, marking an increase of 14% year over year. (Read: BHP Billiton's 1H FY18 Earnings & Revenues Up Y/Y)

SAP SE’s SAP board has recommended a dividend of €1.40 per share for 2017, which represents a 12% year-over-year hike. Based on the weighted average 1,197 million shares outstanding, this will amount to a total dividend outlay of approximately €1.67 billion, representing a pay-out ratio of 41% (assuming the shareholders approve the Board’s recommendation). SAP has a Zacks Rank #4.

The dividend for 2017 is scheduled to be paid on or after May 22, 2018. Additionally, SAP decided to pay 40% or more of after-tax profit as dividends from now on, which is higher than the earlier ratio of more than 35%. (Read: SAP's Board Recommends 12% Dividend Hike for Shareholders)

Performance of Leading Foreign Stocks

The table given below shows the price movements of 10 of the largest stocks listed on indexes worldwide, over the last five days and during the last six months.

Next Week’s Outlook

The minutes of the Federal Reserve’s latest meeting dominated market proceedings last week. Concerns about rising inflation and creeping interest rates are likely to influence market movement in the days ahead as well. These fears are likely to be accompanied by significant volatility. Overall, global markets may have to traverse rough waters in the days to come.

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Petroleo Brasileiro S.A.- Petrobras (PBR) : Free Stock Analysis Report
 
Barclays PLC (BCS) : Free Stock Analysis Report
 
HSBC Holdings PLC (HSBC) : Free Stock Analysis Report
 
SAP SE (SAP) : Free Stock Analysis Report
 
BHP Billiton Limited (BHP) : Free Stock Analysis Report
 
ENI S.p.A. (E) : Free Stock Analysis Report
 
Fibria Celulose S.A. (FBR) : Free Stock Analysis Report
 
America Movil, S.A.B. de C.V. (AMX) : Free Stock Analysis Report
 
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