On 09 September, 2015 – European equities rose on the back of a strong rally in Asian markets

Stocks in Asia and Europe rallied Wednesday. US stocks initially followed overseas indices upward but retreated in afternoon selling after oil prices declined.
United States
Stocks dropped in afternoon trading as the rally that began the day faded. The declines were led by energy companies as the price of oil dropped. An early advance withered after a report showed job openings rose more than forecast. Declines picked up the pace after a jump in Apple lost momentum during an event unveiling new products. Equity futures had soared at the outset, sparked by strong gains in Japan and China. Both the Dow Jones industrials and the S&P dropped 1.4% and the Nasdaq was 1.2% lower.
Barnes & Noble stock sank after the bookseller reported a wider first quarter loss as sales of its Nook e-reader and digital books fell sharply. Its college bookstore business, which was the only unit to post an increase in sales in the quarter, was spun off last month. Netflix gained, breaking a seven-day losing streak, after the company said it would bring its service to four more Asian countries next year. Apple dropped after its latest products were introduced in San Francisco.
US data today showed job openings surged to a record in July, as hiring cooled — a sign employers are having a hard time finding qualified workers. The number of positions waiting to be filled jumped 430,000, the biggest gain since April 2010, to 5.75 million. Investors remain confident the Federal Reserve will raise borrowing costs this year, even as they pare bets on a move at next week’s meeting.
Gold at the afternoon London fixing was down US$11.30 to US$1,109.85. Copper futures were down 0.5% to US$2.42. WTI spot crude was down US$1.59 to US$44.35. Dated Brent spot crude was down US$1.85 to US$47.87. The US dollar was up against the yen, pound and the Canadian and Australian dollar. It was virtually unchanged against the euro. However, it declined against the Swiss franc. The Dollar Index was up 0.1%. The yield on US Treasury 30 year bond was down 2 basis points to 2.95% while the yield on the 10 year note slipped 1 basis point to 2.19%.
Europe
Stocks climbed for a third day after a strong rally in Asia. The Nikkei soared 7.7% after Japanese Prime Minister Shinzo Abe pledged to cut corporate tax rates to shore up economic growth. China’s Shanghai Composite added 2.3%. The continued strength among Chinese stocks is partly due to optimism that the government will take additional steps to support the economy. The FTSE was up 1.3%, the CAC gained 1.4%, the DAX edged up 0.3% and the SMI added 1.3%.
BMW and Volvo advanced on a broker upgrades. Daimler, Volkswagen, Renault and Peugeot also gained. Both RWE and E.ON retreated. Air France-KLM declined after the company reported that traffic in August, measured in terms of revenue per passenger kilometers, increased. GlaxoSmithKline was down after a study of its Relvar/Breo Ellipta 100/25mcg failed to meet its primary endpoint in the treatment of COPD. Wm Morrison Supermarkets advanced after it agreed to sell 140 M local convenience stores for about £25 million in cash, to a team led by retail entrepreneur Mike Greene and backed by Greybull Capital LLP. Ryanair climbed after the Irish airline lifted its forecast for 2016. Mining stocks including Anglo American, Glencore, BHP Billiton and Rio Tinto turned in another strong performance.
UK industrial production dropped unexpectedly and the visible trade gap widened to the highest level in a year in July largely due to a strong pound. Industrial output dropped 0.4% on the month while the July visible trade deficit widened for a second straight month in July to its biggest level in a year.
Asia Pacific
Asian shares rallied on Wednesday, tracking the strong gains in the US and European markets during the Tuesday global market day as positive European GDP data and Beijing’s relentless efforts to prop up the stock market and prevent a hard landing boosted investors’ appetite for riskier assets. Chinese stocks posted strong gains for the second day running, further aiding investor sentiment. The Shanghai Composite was up 2.3% after rallying 2.9% Tuesday. The Hang Seng jumped 4.1% marking its biggest single day gain in nearly four years.
After waiving income tax on dividends for shareholders late Monday, China on Tuesday approved two railway projects worth nearly CNY70 billion in a bid to stimulate the faltering economy. The Ministry of Finance late Tuesday announced a number of new measures to reform taxes, boost infrastructure spending and bring in private financing through increased use of the public private partnership (PPP) model.
The Nikkei soared 7.7% after tumbling to a seven month low the previous day. It was the index’s biggest single day gain since October 2008, after Prime Minister Shinzo Abe pledged to cut corporate tax rates to shore up economic growth. Fast Retailing, Fanuc and Softbank advanced as did automakers Toyota and Honda Motor. Banks including Mitsubishi UFJ Financial, Sumitomo Mitsui Financial and Mizuho Financial jumped. Fuji Heavy Industries on a Nikkei report that it will likely raise its annual dividend by more than 33% to above ¥100 a share for the year ending March 2016.
The S&P/ASX climbed 2.1% while the All Ordinaries added 2.0%. Westpac led the rally along with the other three banks. Miners rallied as well. RBA Deputy Governor Philip Lowe told an audience in Melbourne that business investment is the “missing ingredient” in the economy’s adjustment from mining. He also suggested that movements in China’s stock market are likely to have only limited impact on the overall Chinese economy. The Kospi was up 3.0% on expectations that China will unveil more stimulus measures to bolster growth. The Sensex added 1.6%.
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*
China releases August consumer and producer price indices. Japan posts July machine orders and August producer prices. Australia’s labour force survey for August will be reported. The Bank of England announces its monetary policy decision and publishes minutes of the meeting at the same time. In the US, August import and export prices will be released along with the weekly jobless claims, money supply and fed balance sheet.
*Note — all releases are listed in local time.