On 15 April, 2015 – European markets rose as the central bank kept its monetary policy unchanged

Stocks advanced in Europe and the US as the European Central Bank confirmed its monetary policy and several strong earnings reports boosted investor morale.
United States
Better earnings and rising oil prices pushed US stocks to solid gains Wednesday. The Dow Jones industrials were up 0.4%, the S&P added 0.5% and the Nasdaq advanced 0.7%. Intel led the Dow up after the maker of computer chips turned in better results than expected. Traders said there was no one reason in particular for the move higher pointing to rising oil prices, a handful of earnings reports and a weaker dollar.
Delta Air Lines said its quarterly profit more than tripled as passengers flew more and fuel prices plunged from a year ago. The results were than expected. Intel surged after it reported quarterly profits late Tuesday that beat expectations. Revenue was flat, partly as a result of weak demand for new personal computers. Bank of America was down after it returned to a profit in the first quarter as it put some of its legal troubles behind it. But revenue remained flat for main businesses.
SanDisk reported a decline in quarterly revenue, its first in two years, hurt by lower pricing, lean inventory and weaker than expected sales of storage products used in data centers. SanDisk’s revenue dropped nearly 12% in the first quarter ended March 29 to US$1.33 billion, in line with the company’s own recently lowered expectations. Net income declined to US$39.0 million or 17 US cents per share from US$268.9 million or US$1.14 per share a year earlier.
Netflix quarterly revenue jumped nearly 24% as the TV and movie streaming service provider added 4.88 million net subscribers worldwide, beating its own forecast of 4.05 million. Revenue rose to US$1.57 billion from US$1.27 billion, a year earlier. The company’s net income slipped to US$23.7 million in the first quarter ended March 31 from US$53.1 million a year earlier.
The Federal Reserve released its Beige Book in preparation for its FOMC meeting to be held on April 28 and 29. According to the Beige Book which was compiled by the Federal Reserve Bank of Cleveland, economic activity continued to expand from mid-February through the end of March, but the strong dollar and dropping oil prices were hurting the manufacturing sector. Most regional Fed banks described growth as either progressing at a “moderate” or “modest” pace. The Fed said that demand for manufactured products was mixed. It attributed it in part to the strong US currency, falling oil prices and the harsh winter weather.
Gold at the afternoon London fixing was down US$1.85 to US$1,192.90. Copper futures were up 0.9% to US$2.72. WTI spot crude was up US$2.67 to US$55.96. Dated Brent spot crude was up US$1.89 to US$60.32. The US dollar was down against all of its major counterparts including the euro, yen, pound, Swiss franc and the Canadian and Australian dollars. The Dollar Index declined 0.55%. The yield on US Treasury 30 year bond was up 1 basis point to 2.55% while the yield on the 10 year note slipped 1 basis point to 1.89%.
Europe
European stocks advanced Wednesday after the European Central Bank kept its monetary policy unchanged. The FTSE was up 0.3%, the CAC gained 0.7% and the SMI edged up 0.1%. The DAX was virtually unchanged (up 3.74 points). Investors continued to monitor the situation in Greece. Greece has until April 24 to present a list of reforms which, if found acceptable, would unlock the final tranche of aid to keep the Greek economy afloat. The Greek government denied reports that it is planning to default on its loan repayment to the IMF yesterday.
The European Central Bank held its key interest rates unchanged at a record low for a sixth consecutive policy session amid signs that the bank’s massive stimulus via asset purchases is helping to boost activity in the euro area economy. The Governing Council kept the refinancing rate unchanged at 0.05%. The bank also left the deposit rate steady at minus 0.20% and the marginal lending rate at 0.30%. ECB President Mario Draghi said that the Bank’s asset purchase program is proceeding smoothly and is having an impact on economic activity with volumes in line with the announced figure of €60 billion of securities per month.
E.ON and RWE advanced as did Continental and potash maker K+S. Lanxess, a peer of K+S, also was up. ThyssenKrupp and peer Salzgitter gained. However, Volkswagen retreated. Alcatel-Lucent plunged after Nokia announced a US$16.6 billion all-stock offer for the telecom equipment firm. Both Technip and Total were up. Burberry finished higher after the company reported revenue figures for the second half. Next and Tullow Oil were up on broker upgrades. Dixons Carphone gained after German mobile telephone company Drillisch agreed to buy the UK company’s chain of telecoms shops, The Phone House Deutschland, for a combination of shares and future cash flows.
Asia Pacific
Shares were mixed Wednesday thanks to weaker than anticipated US retail sales and new signs of sluggishness in the Chinese economy reignited concerns over the outlook for global growth. Investors also looked forward to the ECB’s interest rate decision, a slew of key US economic reports and another batch of US earnings for directional cues.
The Shanghai Composite retreated 1.2% on economic concerns after data showed China’s GDP growth slowed to a six year low. However, the Hang Seng added 0.2%. The lackluster mainland economic data reinforced bets that policymakers will unveil more stimulus measures to bolster growth. First quarter gross domestic product expanded 7.0% from a year ago as expected. It was the slowest rate of growth in six years. Industrial production gained just 5.6% in March from a year earlier, well shy of forecasts for an increase of 6.9% and down from 7.9% in February, while retail sales advanced a less than expected gain of 10.2%, down from 11.9% in the previous month.
The Nikkei was down 0.2% in choppy trading although a weaker yen and rising optimism over earnings helped to contain losses. Nippon Paper Industries, Dentsu, Mitsumi Electric Company and Chugai Pharmaceuticals were down. JGC slumped after lowering its dividend outlook. Komatsu dropped on concerns about China’s economy. Toshiba slid after it announced the development of an innovative low power control technology for microcontrollers supporting multi-sensor wearable devices.
The S&P/ASX lost 0.6% and the All Ordinaries shed 0.7% as weak consumer confidence data and a string of weak economic reports out of China, Australia’s biggest export market, soured investor sentiment. Miners closed mostly higher after iron ore prices recovered to above US$50 a ton. The Kospi was up 0.4% extending gains for a fourth consecutive trading session. The Sensex lost 0.8% due to a sudden bout of selling in the last 30 minutes of trading.
Global Stock Market Recap

Please remember, the value of investments and the income from them can do down as well as up. Funds that invest in overseas markets may be subject to currency fluctuations. Investments in small and emerging markets can be more volatile than other overseas markets. Reference in this document to specific securities should not be construed as a recommendation to buy or sell these securities, but is included for the purposes of illustration only.
Looking forward*
Australia posts its March labour force survey. The US releases March housing starts, the April Philadelphia Fed survey and the weekly jobless claims, money supply and Fed balance sheet.
*Note — all releases are listed in local time.
Anne D PickerChief EconomistEconoday