On 08 May, 2015 – European markets rallied after the Conservative Party unexpectedly won the UK election

Most indices rallied Friday but were mixed for the week. The positive US employment report boosted stocks in Europe and the US but was too late in the global market day to help indices in the Asia Pacific region.
United States
US shares had their best day in two months Friday after encouraging news about the job market. Investors cheered news that 223,000 jobs were added in April, a solid gain suggesting that the economy may be recovering from its first quarter slump. The unemployment rate fell to 5.4% from 5.5% in March, the lowest rate since May 2008. The Dow Jones industrials were up 1.5% (0.9% on the week), the S&P gained 1.3% (0.4% last week) and the Nasdaq added 1.2% but was virtually unchanged on the week (down1.84 points).
Visa gained in late afternoon trading after Bloomberg News reported it was in talks to buy Visa Europe. Visa Europe was split off from Visa in 2007 when the United States based Visa decided to become a publicly traded company. Visa Europe is owned by European banks, which is similar to how Visa was structured before it went public. Biogen gained after announcing a US$5 billion share repurchase program. Microsoft advanced after Reuters reported that the company was not weighing an offer for Salesforce.com. Salesforce.com retreated. AOL surged after reporting revenue above analysts’ expectations. Bojangles jumped after the chicken and biscuits chain held a well-received initial stock offering. Monster Beverage sank after the energy drink maker late Thursday reported lower profits in the first quarter.
Gold at the afternoon London fixing was down US21.00 to US$1,186.00. Copper futures were down 0.1% to US$2.92. WTI spot crude was up 45 US cents to US$59.39. Dated Brent spot crude was down 15 US cents to US$65.39. The US dollar was up against the euro and Swiss franc. It was virtually unchanged against the yen. However, it declined against the pound and the Canadian and Australian dollars. The Dollar Index was up 0.2%. The yield on US Treasury 30 year bond was down 1 basis point to 2.90% while the yield on the 10 year note slipped 3 basis points to 2.15%. 
Europe
European markets rallied Friday after Prime Minister David Cameron’s Conservative Party unexpectedly won the UK general election. A strong US employment report also gave stocks a lift. The FTSE rallied 2.3%, the CAC gained 2.4%, the DAX jumped 2.6% and the SMI added 2.5%. Friday’s gains helped the indices gain for the week. The FTSE, and CAC added 0.9%, the DAX gained 2.2% and the SMI was a modest 0.2% higher.
Centrica and Babcock International posted strong gains as did Lloyds Banking, RBS, Barclays and Royal Bank of Scotland. Severn Trent and National Grid also advanced. InterContinental Hotels was up after the company said its first quarter comparable revenue per available room grew 5.9%, driven by an increase in rate and growth in all four regions. BG group climbed even though first quarter profit fell on lower commodity prices. Syngenta soared after the Swiss crop chemicals firm rejected a takeover offer from Monsanto. Nokia rose following a New York Times report that Uber wants to buy the company’s mapping service for as much as US$3 billion.
Many investors had backed the Conservatives over the opposition, centre-left Labour Party which had promised tough regulation of industries such as banking, utilities, real estate and gambling which could have hit the profits of companies in those sectors. But the political uncertainty isn’t going to go away. Now a referendum on Britain’s EU membership looms.
Asia Pacific
Stocks here were mixed Friday after heavy selling in the past two trading sessions. Chinese and Hong Kong shares rebounded on bargain hunting after recent sharp losses. Other major markets elsewhere across the Asia-Pacific region followed US shares higher amid an easing of bond yields. Australian shares retreated however, dragged down by energy and mining stocks after iron ore and oil prices declined overnight. Seoul shares also ended slightly lower in response to softer trade data out of China.
Chinese shares ended a choppy session sharply higher as weak data spurred bets for further economic stimulus measures to avert a sharper economic slowdown. The Shanghai Composite added 2.3% while the Hang Seng was up 1.1%. The expectations of further stimulus were rewarded Sunday when the People’s Bank of China once again lowered its one year benchmark rate by 25 basis points to 5.10%. The PBoC last cut rates on February 28 also by 25 basis points. The move was in response to the latest round of weak economic data. The Bank also cut the one year deposit rate by 25 basis points, to 2.25%. For the week, the Shanghai Composite and Hang Seng dropped 5.3% and 2.0% respectively.
The Nikkei rebounded 0.5% from Thursday’s one month low as the global bond market rout slowed and Nintendo posted its first annual profit in four years. Automakers Honda Motor and Mazda Motor gained as the yen weakened to near ¥120 per US dollar. Toyota Motor closed higher before releasing its results after market hours. The company said its annual profit increased 19% from last year to a record US$18.1 billion, helped by strong sales growth in North America. Nintendo shares gained after the company forecast a doubling of its annual operating profit this year and announced a partnership with Universal theme parks to license its characters. Banks also rallied.
Both the S&P and All Ordinaries slipped 0.2% and were down 3.1% and 2.8% respectively on the week. Soft Chinese trade data fanned fears that global growth is losing momentum. The Reserve Bank of Australia lowered its growth and inflation estimates for 2015 and 2016, further dampening investor sentiment. The Kospi was down 0.3% on the day and 2.0% on the week. The Sensex rallied 1.9% Friday and the rupee also rebounded from a 20-month low hit the previous day as a fall in oil prices overnight and an announcement by the Modi government that it would form a panel to resolve a tax dispute with foreign investors triggered heavy short covering in most depressed stocks. On the week, the index edged up 0.3%.
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*
Monday — Bank of England announces its monetary policy decision. In the US, the labor market conditions index is on tap.
Tuesday — Australia posts March home loans. India posts April consumer prices and March industrial production. The US reports March industrial production. In the US, March JOLTS and April NFIB small business optimism index will be released along with the April Treasury budget.
Wednesday — Flash first quarter gross domestic product will be reported for the Eurozone, France, Germany and Italy. Germany, Italy and France release April consumer price indices. The Eurozone also reports March industrial output. The UK releases its April labour market report. The Bank of England publishes its quarter Inflation Report. The European Central Bank publishes minutes from its meeting on April 15. In the US, April retail sales and import/export price indices will be released along with May Atlanta Fed business inflation expectations and March business inventories.
Thursday — India posts April’s WPI. In the US, April producer prices along with weekly jobless claims, Fed balance sheet and money supply will be posted.
Friday — May Empire State manufacturing survey will be posted along with April industrial production and May preliminary consumer sentiment. March Treasury international capital also will be released. 
*Note — all releases are listed in local time