On 10 September, 2015 – European markets slid on profit taking

Stocks in Europe and Asia declined while those in the US advanced in volatile trading thanks to improving oil prices.
United States
Stocks ended higher in choppy trading Thursday, supported by gains in Apple and biotech shares, but nervousness ahead of a much-anticipated Federal Reserve meeting next week limited the advance. Stocks, which had climbed more than 1% in midday trading, ended up roughly a half percentage point higher. The swings accompanied rising concerns over the state of the Chinese economy and the Federal Reserve’s monetary policy setting meeting next week. The Dow Jones industrials and S&P both added 0.5% while the Nasdaq gained 0.8%.
Fewer Americans applied for unemployment benefits last week, keeping this key indicator of the labor market near historic lows. The Labor Department said weekly applications benefits dropped 6,000 to 275,000. This followed Wednesday’s JOLTS report that indicated US job openings had jumped to the highest level in 15 years in July.
Krispy Kreme Doughnuts plunged after the company lowered its outlook following disappointing second-quarter results. Lululemon sank after the apparel maker predicted profits for the current quarter would be lower than expected. Con-Way jumped after agreeing to be acquired by XPO Logistics. Health-care and biotechnology shares gained. Gilead advanced after the drug developer filed a prospectus to sell US$10 billion in bonds spurring speculation that an acquisition could be in the works.
Gold at the afternoon London fixing slipped 35 US cents to US$1,109.50. Copper futures were up 0.8% to US$2.46. WTI spot crude was up US$1.55 to US$45.70. Dated Brent spot crude was up US$1.15 to US$48.73. The US dollar was down against the euro, pound, Swiss franc and the Canadian and Australian dollars. However, it was up against the yen. The Dollar Index was down 0.65%. The yield on US Treasury 30 year bond was up 4 basis points to 2.99% while the yield on the 10 year note added 3 basis points to 2.22%.
Europe
European stocks declined for the first day this week on Thursday. The retreat was attributed to profit taking after the recent run up in prices. Disappointing economic data from China and Japan also had a negative impact on investor sentiment. Economic data from the United States for import prices and wholesale trade came in weaker than anticipated, adding to the slump in afternoon trading. The FTSE was down 1.2%, the CAC dropped 1.5%, the DAX declined 0.9% and the SMI lost 1.1%.
The Bank of England kept its policy interest rate unchanged at 0.5%. At the same time it maintained the £375 billion asset purchase ceiling. The vote was 8 to 1. The monetary policy committee judged it premature to conclude that overseas events, especially those in China, had a huge adverse impact on the British economy. Committee member Ian McCafferty repeated his call for a 25 basis point increase as he assessed that building domestic cost pressures would otherwise be likely to lead to inflation overshooting the 2% target in the medium term.
German utility E.ON will post a massive loss after ditching plans to unload its nuclear operations into a new company, in a nod to government proposals to saddle utilities with liabilities related to nuclear energy. E.ON expects to book impairment costs this quarter of as much as €9 billion triggering a multibillion euro loss. Shares plunged to an all-time low on the news. Lufthansa gained after the airline reported improved traffic and load factor for August. Fraport climbed after reporting the passenger data for August. ThyssenKrupp and Salzgitter declined as did Technip and Total. Also retreating were Carrefour, Kering and Pernod Ricard. In London, Wm Morrison Supermarkets declined after the company reported lower first-half profit and cut its dividend. The company said the turnaround would take time and require sustained investment in the proposition. Next increased after the retailer announced a higher profit for its first half with improved sales performance. The company also backed its forecast for growth in fiscal 2015 profit and sales. Miners Glencore, BHP Billiton and Anglo American declined.
Asia Pacific
Stocks mostly were lower Thursday as weak Japanese and Chinese data as well as renewed talk of an interest rate increase in the US kept investors on edge ahead of next week’s FOMC meeting.
The Shanghai Composite ended the session down 1.4% on profit taking, after rallying sharply in the previous two days. The Hang Seng dropped 2.6% after climbing more than 4% the previous day. China’s August PPI dropped 5.9% — the 42nd straight monthly decline while consumer price inflation rose an annual 2.0% in August, up from 1.6% in July thanks to pork prices.
Japanese July core machinery orders unexpectedly fell 3.6% from the previous month. The series serves as a proxy for capital spending and reflects a stalling economy. At the same time, August producer price index dropped 3.6% on the year indicating that deflation remains entrenched. The Nikkei tumbled 2.5% after rallying 7.7% on Wednesday to post its biggest single day gain in nearly seven years. Among the companies that declined were Alps Electric and Murata Manufacturing. TDK retreated after shares of Apple sank overnight. Fast Retailing, automakers Honda Motor and Toyota and Mitsubishi UFJ Financial Group also retreated.
Australian shares tumbled as lower commodity prices weighed on the resources sector and banks surrendered Wednesday’s gains. The S&P/ASX dropped 2.4% while the All Ordinaries dropped 2.3%. Miners BHP Billiton and Rio Tinto declined. Gold miner Newcrest slumped after gold futures suffered their largest one-day fall in more than six weeks on Wednesday on the dollar’s strength and strengthening global markets. August’s unemployment rate slipped to 6.2% from 6.3% in July while employment was up 17,400.
The Kospi posted a 1.4% gain amid expectations that China will maintain reforms to ensure its financial stability. The Sensex lost 0.4%.
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*
India releases July industrial production. Germany posts final August consumer prices. Italy reports July industrial production. In the US, August producer prices and September preliminary consumer sentiment will be released.
*Note — all releases are listed in local time.