China A-share sentiment drops as southbound flows remain positive

Investing.com

Advanced Micro Devices

+0.83%

Alphabet-A

-1.67%

Summary:

Investing.com -- China A-share investor sentiment declined compared to the previous cycle, with the weighted MSASI decreasing 8...

Investing.com -- China A-share investor sentiment declined compared to the previous cycle, with the weighted MSASI decreasing 8 percentage points to 41% versus the November 26 cutoff date.

The weighted MSASI one-month moving average fell 3 percentage points to 57% during the same period.

Trading activity showed notable decreases across multiple segments of the Chinese market. Average daily trading for ChiNext dropped 5% to 506 billion yuan, while A shares declined 6% to 1,801 billion yuan. Equity futures experienced the largest decrease, falling 26% to 404 billion yuan.

Despite these declines, ChiNext turnover remained stable at 2,445 billion yuan. The RSI-30D indicator increased 2% compared to the November 26 cycle.

Consensus earnings estimate revision breadth maintained its negative position, showing no change from the previous week.

Southbound flows continued to show strength with net inflows of $1.6 billion during the November 27-December 3 period. Year-to-date net inflows reached $168 billion, while month-to-date inflows stood at $1.1 billion.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

BofA cuts Shell to Neutral, BP to Underperform, and double-upgrades Neste to Buy

Investing.com

First Commonwealth Financial

Investing.com -- Bank of America (BofA) has reset its European energy sector views for 2026, lowering ratings on Shell and BP while issuing a rare double-upgrade on Neste as the bank positions for what it calls a “soft landing” in a $60 Brent world.

The bank’s analysts expect lower oil and gas prices and fading refining margins to keep free cash flow (FCF) under pressure next year. They argue that share prices across Europe’s Big Oil group already discount roughly $65 Brent long-term, leaving limited room for upside.

Get premium energy market insight, analyst calls, and deep research tools by upgrading to InvestingPro - get 55% off today

Shell’s downgrade reflects what BofA sees as constrained valuation appeal. The company retains strong balance sheet headroom, but the analysts flag “limited valuation upside left as investors await deployment” of that capacity.

They expect most Big Oils to reduce buyback run-rates in 2026, but Shell has not yet followed BP and TotalEnergies in signalling lower repurchase levels. BofA argues that uncertainty around how Shell will deploy its substantial balance sheet headroom limits valuation upside for now.

BP shares were also downgraded. BofA warns that “balance sheet repair” will restrict shareholder returns and dilute free cash flow quality through the medium term.

BP also carries the highest gearing in the group at more than 40%, and its breakeven oil price remains elevated. Under the new assumptions, the bank trims BP’s price objective to 375p from 440p and moves the stock to Underperform.

On the flip side, Neste becomes one of BofA’s most preferred names, lifted two notches to Buy with a higher price objective of €22.

The analysts argue that “organic volume growth in Renewables” will more than compensate for normalizing refining margins. They see Neste and Galp as the only companies able to cover shareholder distributions organically in 2026, and expect Neste’s gearing to fall meaningfully next year.

The broader sector backdrop is shaped by BofA’s revised oil price deck, which now assumes Brent at $60 in 2026 following a “landing” below that level in the first quarter.

The analysts cut their aggregate 2026 Big Oil cash flow estimates by around $10 billion and expect free cash flow payouts to remain stretched, averaging close to 130%.

With fewer inorganic options available and organic cushions thinning, the bank prefers companies offering resilience rather than leverage to higher prices. That keeps TotalEnergies, Galp, and Saipem among its top picks.

Risk Warnings and Disclaimers

Add to Favorites

India stocks higher at close of trade; Nifty 50 up 0.59%

Investing.com

Infinity Natural Resources Inc.

Investing.com – India stocks were higher after the close on Friday, as gains in the Banking, Metals and Technology sectors led shares higher.

At the close in NSE, the Nifty 50 added 0.59%, while the BSE Sensex 30 index climbed 0.52%.

The best performers of the session on the Nifty 50 were Shriram Finance Ltd. (NSE:SHMF), which rose 3.00% or 24.85 points to trade at 853.00 at the close. Meanwhile, State Bank Of India (NSE:SBI) added 2.49% or 23.60 points to end at 971.70 and Bajaj Finserv Ltd (NSE:BJFS) was up 2.17% or 44.50 points to 2,093.70 in late trade.

The worst performers of the session were Hindustan Unilever Ltd. (NSE:HLL), which fell 3.34% or 81.00 points to trade at 2,341.00 at the close. Eternal Ltd (NSE:ETEA) declined 1.34% or 3.95 points to end at 291.80 and Sun Pharmaceutical Industries Ltd. (NSE:SUN) was down 0.86% or 15.60 points to 1,802.70.

The top performers on the BSE Sensex 30 were State Bank Of India (BO:SBI) which rose 2.53% to 972.00, Bajaj Finserv Ltd (BO:BJFS) which was up 2.08% to settle at 2,092.80 and Maruti Suzuki India Ltd. (BO:MRTI) which gained 1.80% to close at 16,285.00.

The worst performers were Hindustan Unilever Ltd. (BO:HLL) which was down 3.38% to 2,342.00 in late trade, Eternal Ltd (BO:ETEA) which lost 1.30% to settle at 291.95 and Sun Pharmaceutical Industries Ltd. (BO:SUN) which was down 0.75% to 1,805.00 at the close.

Falling stocks outnumbered advancing ones on the India National Stock Exchange by 1575 to 899 and 40 ended unchanged; on the Bombay Stock Exchange, 2271 fell and 1671 advanced, while 174 ended unchanged.

The India VIX, which measures the implied volatility of Nifty 50 options, was down 4.44% to 10.34 a new 1-month low.

Gold Futures for February delivery was up 0.26% or 11.20 to $4,254.20 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in January fell 0.25% or 0.15 to hit $59.52 a barrel, while the February Brent oil contract fell 0.16% or 0.10 to trade at $63.16 a barrel.

USD/INR was up 0.25% to 90.03, while EUR/INR rose 0.17% to 104.79.

The US Dollar Index Futures was up 0.02% at 98.97.

Risk Warnings and Disclaimers

Add to Favorites

Dj Should Walmart Really Be Trading Like A Tech Company? - Heard On The Street

Reuters

Risk Warnings and Disclaimers

Add to Favorites

Should Walmart Really Be Trading Like a Tech Company? — Heard on the Street — WSJ

Dow Jones Newswires

By Jinjoo Lee |Photography by Thomas Simonetti for WSJ

Think tech stocks are expensive? Try Walmart.

America's biggest retailer has become a true investor darling. Its shares have risen about 27% this year, bringing its market value above $900 billion. The stock is now valued at roughly 40 times forward earnings, more expensive on that metric than six of the Magnificent Seven stocks such as Nvidia and Microsoft. Historically, it has traded at a multiple of about 23 times.

When Walmart moves its listing to the tech-heavy Nasdaq on Tuesday, its shares could move up another leg. Analysts at Morgan Stanley estimate that the Nasdaq inclusion could boost demand for Walmart's shares from passive investment vehicles — such as ETFs and index trackers — by $20 billion or more.

Few on Wall Street are betting against the retail giant. Only one Wall Street analyst out of the 42 that FactSet polls gives it a "sell" rating. As of September, Walmart was the least shorted stock in the S&P 500, according to BofA Securities.

Walmart's multiple has risen over the past three years as its supply chain and e-commerce investment paid off in higher profits. After many years of declining or flat earnings, Walmart's net income is set to grow at a double-digit percentage for the third consecutive year. But there could be a bit of froth building up, too. This year alone, its forward earnings multiple has expanded nearly 20%, even as analysts on average reduced earnings expectations for the upcoming fiscal year.

Bulls point to the powerful moat that Walmart has built over the years, especially in e-commerce. With improved online assortment and delivery, Walmart U.S. e-commerce sales have been growing at over 20% year over year in 10 of the past 11 quarters, according to Visible Alpha. Walmart can now deliver within three hours to 95% of U.S. households, up from about 76% two years ago, according to a report from BofA Global Research. This online growth helps Walmart generate high-margin revenue, such as advertising, membership fees and fulfillment services for third-party marketplace sellers.

It helps that competition looks weak: Target is still reeling from past mistakes and grocery giant Kroger failed to scale up after its Albertsons acquisition fell through.

But can Walmart keep delivering tech-like growth? Steven Shemesh, retail analyst at RBC Capital Markets, notes that Walmart is still in the early stages of expanding its high-margin businesses. Its ad revenue last year was roughly 8% of Amazon's. And only about 18 million U.S. households have signed up for Walmart's paid membership, a small fraction compared with Amazon's 107 million Prime members, according to estimates from Evercore.

Walmart's U.S. advertising business has indeed grown at a healthy year-over-year pace of about 30% in recent quarters. That isn't a huge number compared with Amazon, whose advertising business grew at a compound annual growth rate of about 42% since 2017 when its ad revenues were roughly Walmart's size. Shemesh says Walmart is "very measured" in increasing that business to make sure its website and app aren't flooded with ads. But the bigger concern is that Walmart today isn't operating in a white space as Amazon did many years ago. It also lacks exposure to nonretail-related growth areas such as Amazon's cloud business.

Far-out estimates should be taken with a grain of salt, but analysts expect Walmart's earnings to grow at an average annual rate of about 8% over the long term, according to S&P Global Market Intelligence. Among S&P 500 companies with an earnings multiple exceeding 30 times, Walmart ranks near the bottom on long-term earnings growth expectations, according to data from S&P Global Market Intelligence. (This excludes real-estate investment trusts, which distribute much of their taxable income to shareholders.)

If tech-like growth isn't in the cards, Walmart's multiple might be justified if it can achieve reliable, even if not eye-watering, growth in earnings and returns over a long period of time. Costco, for example, commands an earnings multiple higher than Walmart even with modest earnings growth expectations.

But what it lacks in flashiness, Costco makes up for in consistency that Walmart hasn't yet matched. Costco has seen growth in same-store sales every year since 2000 and delivered a return on invested capital exceeding 10% almost every year since 1998. The last time Walmart U.S. saw a same-store sales decline was in 2014, but it also suffered disappointingly slow growth from 2015 to 2017. And returns on investment have been patchier because of its aggressive spending.

Perhaps greater consistency is in the cards for Walmart. In part, this will depend on whether the company is done with its heavy cycle of investment. On Walmart's latest earnings call, an analyst asked if the company's leadership succession — Chief Executive Doug McMillon will be stepping down next month — signals another phase of spending. So far, incoming CEO John Furner, the head of Walmart U.S., has said the company will take a "disciplined" approach. But expanding an already big business could involve even more spending, and it will be difficult for Walmart to avoid hefty spending on artificial intelligence if that's what it takes to keep up with Amazon.

At these high multiples, the market is counting on Walmart to deliver tech-like growth or Costco-like consistency, two things that the company doesn't have a long track record of. Walmart still has a lot to prove.

Write to Jinjoo Lee at jinjoo.lee@wsj.com

Risk Warnings and Disclaimers

Add to Favorites

Norsk Hydro shares rise despite mixed Q4 guidance

Investing.com

Investing.com -- Norsk Hydro shares rose 1.5% in Oslo trading after the aluminum producer provided its fourth quarter guidance with mixed results across business segments.

In its Bauxite & Alumina division, Alunorte production is expected to reach nameplate capacity. The realized price for Q4 is projected at $340 per ton, below consensus estimates of $359 per ton. The company also anticipates a negative currency effect of NOK30 million, with stable raw material and fixed costs.

For the Aluminium Metal segment, sales volumes are expected to remain stable quarter-over-quarter. The realized LME aluminum price is guided at $2,632 per ton, with realized premiums between $310-360 per ton. The segment faces higher fixed costs of NOK100-200 million without significant currency effects.

In the Extrusions business, Norsk Hydro forecasts limited year-over-year recovery in sales volumes. While the company expects a positive metal effect of NOK50-150 million from elevated Midwest premiums, this benefit will be fully offset by continued pressure on sales margins.

The Metal Markets division anticipates lower quarter-over-quarter results from recycling and from sourcing and trading activities. The company reiterated its full-year 2025 Commercial EBITDA guidance of NOK200-400 million.

For the Energy segment, production is expected to be seasonally higher alongside higher prices, though price area differences are projected to be lower in Q4 compared to Q3 by NOK330 million.

The company also guided for positive eliminations in Q4 due to the decrease in PAX alumina price.

Despite the share price increase, RBC analysts noted they "expect a negative reaction to today’s announcement with updated guidance implying consensus downgrades to numbers."

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Risk Warnings and Disclaimers

Add to Favorites

Boliden updates 2026 production guidance, delays Odda expansion

Investing.com

Investing.com -- Swedish mining and smelting company Boliden has provided throughput and grade guidance for its mining assets in 2026, indicating slightly lower production than analysts expected.

Based on the guidance and assuming 2025 year-to-date recovery levels, implied zinc concentrate production would reach 426,000 tonnes, 3% below RBC estimates and 6% below consensus forecasts. Implied copper production would be 118,000 tonnes, 2% below both RBC estimates and consensus.

For the Aitik mine, Boliden expects throughput of 41 million tonnes with copper grades of 0.18%. At Garpenberg, throughput is projected at 3.7 million tonnes with zinc grades of 2.9%.

The Kevitsa mine is expected to process 10 million tonnes with copper grades of 0.24% and nickel grades of 0.17%. For the Boliden area, throughput guidance is 1.8 million tonnes with zinc grades of 3% and gold at 1.6 grams per tonne.

Tara mine is projected to process 1.8 million tonnes with zinc grades of 5.6%, while Somincor is expected to handle 2.2 million tonnes with zinc grades of 6.7%. Zingkruvan’s throughput is forecast at 1.1 million tonnes with zinc grades of 7%.

In its smelting operations, Boliden announced that commissioning of the Odda expansion project has been delayed by two months, with first feed now expected in the first quarter of 2026. At the Rönnskär facility, a final reassessment of recoveries will lead to a SEK400 million adjustment in the third quarter, representing 5% of the expected full-year 2025 consensus operating profit.

The company also noted that planned maintenance shutdowns are expected to impact operating profit by SEK450 million in 2026.

Boliden’s capital expenditure for fiscal year 2026 is projected at SEK15 billion, 7% below RBC estimates but 11% above consensus forecasts.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Risk Warnings and Disclaimers

Add to Favorites