On 10 July, 2015 – European markets rose on global market cues

Stocks mostly rallied on Friday but were mixed for the week. China’s stock markets’ gyrations and the ongoing Greek saga continued to keep investors wary.
United States
US stocks logged their best day in two months Friday as Greece appeared to move closer to securing a bailout deal that will enable it to avoid bankruptcy and remain in the euro. A second day of gains for Chinese stocks also encouraged US investors. The Dow Jones industrials and S&P added 1.2% on the day while the Nasdaq was 1.5% higher. For the week, the Dow managed to add 0.2% but the Nasdaq lost 0.2% while the S&P was virtually unchanged.
Airline stocks rallied after American Airlines signaled that it was cutting back on its growth plans this year amid signs that average fares are declining. American said it expected to increase passenger carrying capacity by 1% this year, down from an earlier forecast of 2%. Analysts have been urging the airlines to scale back growth plans to prevent fares from falling, but it was unclear whether airlines would continue to talk about their capacity plans after the US the Justice Department began investigating possible collusion among the carriers.
Investors also followed a speech by the Federal Reserve Chair Janet Yellen Friday. Dr Yellen said that the Fed was on track to start raising interest rates later this year, but expressed concerns over headwinds that are still holding back the US economy, in particular lingering weakness in the labor market and new potential threats from overseas.
Greece’s latest proposal to the IMF, EC and ECB seemed closer to creditors’ demands and fueled hopes that the country will strike a deal to keep it in the Eurozone. The 13-page plan for economic policy overhauls and budget cuts which was submitted Thursday night was approved by Greek lawmakers late Friday after financial markets were closed for the week. On Friday, Greece and its creditors appeared to be narrowing their differences after Athens offered reform proposals in order to secure a third bailout of around €53 billion. However, the wrangling continued over the weekend (and at this writing at 4 PM US ET Sunday) making it look doubtful that a final decision will be made on Sunday. However, at this writing, the talks are continuing.
Gold at the afternoon London fixing was down US$4.95 to US$1,159.30. Copper futures were down 0.55% to US$2.54. WTI spot crude was down 4 US cents to US$52.74. Dated Brent spot crude was up 12 US cents to US$58.73. The US dollar was up against the yen but was down against the euro, pound, Swiss franc and the Canadian and Australian dollars. The Dollar Index was down0.6%. The yield on US Treasury 30 year bond was up 9 basis points to 3.19% while the yield on the 10 year note was up 10 basis points to 2.40%.
Europe
European markets ended Friday’s session firmly in positive territory, adding to the gains of the previous two trading sessions. Investors remained optimistic that a solution to the Greek debt crisis was in sight. The continued recovery of the Chinese stock market and the positive performance of the US stock markets also added to the positive mood among investors. The FTSE was up 1.4%, the SMI gained 1.7% and the CAC and DAX added 3.1% and 2.9% respectively. The indices also advanced for the week. The FTSE added 1.3%, the CAC advanced 2.0%, the DAX gained 2.3% and the SMI was 2.5% higher.
Greek Prime Minister Alexis Tsipras submitted a cash-for-reforms proposal to creditors on Thursday that included spending cuts, pension reforms and tax increases in exchange for a €53.5 billion three year bailout. Acceptance will pave the way for further negotiations between both sides. The Greek Parliament approved the proposal late Friday evening. But discussions with the troika continued through the weekend.
Deutsche Bank, Commerzbank, BNP Paribas, Société Générale and Crédit Agricole advanced. Deutsche Telekom and Lufthansa climbed. BASF and K+S finished higher. Orange and Alcatel-Lucent gained. Inter-Continental Hotels was up after the company agreed to sell its ownership interest in InterContinental Hong Kong for US$938 million. Smith & Nephew gained after it acquired the trauma and orthopedics business of DeOst and DC. Ryanair increased after the company’s Board has voted unanimously to accept the IAG offer for Ryanair’s 29.8% shareholding in Aer Lingus Group. IAG also finished higher. Barclays, Lloyds Banking Group, Standard Chartered and Royal Bank of Scotland increased. Insurers including Admiral Group, Aviva, Standard Life, Prudential and RSA Insurance advanced on a broker upgrade. House builders Taylor Wimpey and Barratt Developments climbed after the government announced measures to remove obstacles to building new homes.
Asia Pacific
Asian stocks were mostly higher Friday as Chinese shares continued to rally in the wake of drastic measures announced by regulators to calm the markets. Despite doubts on the potency of Beijing’s aggressive rescue efforts to produce a durable recovery, regional stocks ended mostly higher on hopes that authorities will step up efforts to prevent the fallout from spilling over into the real economy. Meanwhile, Greece submitted new reform proposals to its international creditors on Thursday night, raising hopes a deal would be reached at weekend crisis meetings scheduled for Saturday and Sunday.
The Shanghai Composite rallied for the second consecutive day amid expectations the People’s Bank of China will unveil further support measures over the weekend to support the market that had tumbled around 30% in just three weeks. The index climbed 4.5% and managed to gain 5.1% for the week. There was no announced action by the PBoC over the weekend. The Hang Seng added 2.1% but slid 4.5% on the week.
The Nikkei retreated 0.4% on the day and lost 3.7% on the week. The decline was led by Fast Retailing after the Uniqlo chain operator reported higher sales and profit for the nine months ended May 31, but forecast sales to be weak in the fourth quarter. However, Dentsu, West Japan Railway Company, Daiichi Sankyo, Sharp and Nippon Telegraph & Telecom advanced.
Both the S&P/ASX and All Ordinaries added 0.4% ahead of the weekend EU summit meeting. The S&P/ASX lost 0.8% on the week while the All Ordinaries retreated 0.9%. Miners Rio Tinto, Fortescue Metals Group and BHP Billiton climbed after iron ore prices jumped almost 10% overnight. Newcrest Mining declined as gold prices hovered near a four month low. Banks were mixed. The Kospi was up 0.2% but lost 3.5% on the week. The Sensex was 0.3% higher on the day and down 1.5% for the week.
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 — India posts its consumer price index for June. The US releases its June Treasury budget.
Tuesday — Germany releases preliminary June consumer price index. India posts June WPI. The ECB posts its second quarter lending survey. The UK reports June consumer and producer price indices. The Eurozone releases May industrial production. In the US, the NFIB small business optimism index for June will be posted along with June retail sales and import & export prices and May business inventories.
Wednesday — the Bank of Japan publishes its monetary policy decision. China reports second quarter gross domestic product and June industrial production and retail sales. The UK releases its June labour market report. The Bank of Canada announces its monetary policy decision and publishes its Monetary Policy Report. In the US, June producer prices and industrial production along with July Empire State manufacturing survey are on tap. The Federal Reserve publishes its Beige Book in preparation for its FOMC meeting to be held on July 28 and 29. Fed Chair Janet Yellen gives the first of her two days of her semi-annual testimony.
Thursday — Italy and the Eurozone release May merchandise trade data. The Eurozone also posts final June harmonized index of consumer prices. The European Central Bank announces its monetary policy decision followed by President Mario Draghi’s press conference. In the US, July Philadelphia Fed business outlook survey and housing market index along with weekly jobless claims, money supply and Fed balance sheet will be released.
Friday — June consumer prices and housing starts along with preliminary July consumer sentiment will be reported. Canada also reports June consumer prices.
*Note — all releases are listed in local time.