On 23 September, 2015 – European markets were mixed on bargain hunting and private sector data

Most stocks indices retreated Wednesday after a weak Chinese flash manufacturing PMI reading for September added to global demand worries.
United States
Trading was choppy Wednesday. Along with a disappointing manufacturing PMI, investors continued to fret about the Federal Reserve’s lack of action last week. Traders said there was no news in particular driving Wednesday’s action, adding that volumes were light amid the Jewish holiday of Yom Kippur and lighter than in previous sessions, which tends to exacerbate swings. Stocks briefly traded higher in the afternoon following comments by Chinese President Xi Jinping that his country was capable of maintaining a relatively high growth rate for a long time. The US manufacturing PMI remained at a two year low reading of 52.0 while Chinese factory activity contracted to a 6-1/2 year low of 47.0. The Dow Jones industrials were down 0.3%, the S&P retreated 0.2% and the Nasdaq slipped 0.1%.
First Niagara Financial was up after Bloomberg reported the regional bank was exploring a sale. Real estate investment trust Biomed Realty posted a standout gain after reports said the company is in talks to sell itself. Copart moved to the downside even though the provider of online vehicle auction and remarketing services reported better than expected fourth quarter results.
Gold at the afternoon London fixing was up US$8.45 to US$1,131.35. Copper futures were down 0.15% to US$2. WTI spot crude was down US$1.60 to US$44.76. Dated Brent spot crude was up US$1.19 to US$47.89. The US dollar was up against the yen, pound, Swiss franc and the Canadian and Australian dollars. However, it declined against the euro. The Dollar Index slipped 0.1%. The yields on both the US Treasury 30 year bond and 10 year note edged up 1 basis point to 2.95% and 2.15% respectively.
Europe
European stocks were mixed Wednesday after retreating the day before. Bargain hunting was partly responsible for the increase as investors picked up stocks at low prices. The rebound in Volkswagen after two days of sharp declines also improved the mood among investors. The markets shrugged off weak manufacturing data from China overnight. Meanwhile, European private sector data were largely in line with expectations. The FTSE added 1.6%, the CAC edged up 0.1% and the DAX added 0.4%. However, the SMI retreated 0.3%.
Volkswagen advanced after the company announced that CEO Martin Winterkorn had decided to resign amid the automaker’s diesel emission scandal. Porsche, the parent company of Volkswagen, also gained as did BMW and Daimler. Deutsche Lufthansa surged. In Paris, Total gained after the company reported higher production for the first half, expecting further output growth until 2019. In London, Smiths Group was up after the company reported pretax profit of £325 million for the year ended 31 July 2015 compared to £302 million a year ago.
TUI climbed after it said that winter 2015/2016 is trading in line with its expectations and it has seen a good start to UK sales for summer 2016. TUI also announced the strategic realignment of its management structure from 2016 onwards. Diageo gained after it said its financial year has started well and performance is in line with the Group’s expectations. Swiss Re increased in Zurich — the company’s business unit, Admin Re, has agreed to acquire Guardian Holdings Europe Limited from private equity company Cinven for £1.6 billion.
European Central Bank President Mario Draghi said in remarks today that it’s too soon to decide whether risks to the economic outlook warrant a step-up in the ECB’s stimulus. The macroeconomic environment is “more challenging,” Draghi said, and he vowed the ECB won’t hesitate to act if risks increase. Similar to the Federal Reserve, Draghi’s comments suggest the ECB is also having a hard time assessing the impact of slowing growth.
Asia Pacific
Asian stocks were mostly lower Wednesday as slumping commodity prices, fallout from the Volkswagen emissions scandal and uncertainty about the Federal Reserve’s first interest rate increase spurred risk aversion and drove investors back to safe haven assets such as the Japanese yen and government debt. Weak factory output data from China also added to fears that a slowdown in the country will constrain global growth.
The Shanghai Composite dropped 2.2% on growth concerns after the preliminary Caixin China manufacturing PMI sank to a six-and-a-half-year low of 47.0 in September — below expectations of 47.5 and down from 47.3 in August. The figure for September was the worst since 44.8 in March 2009. In his first policy address during his visit to the United States, Chinese President Xi Jinping pledged to implement difficult economic reforms without resorting to competitive currency devaluation to boost exports. He also defended government intervention into the country’s stock market, but said the market has now reached a point of “self-recovery and self-adjustment.” The Hang Seng lost 2.3%. The Japanese market was closed for a third day but will reopen Thursday.
Australian shares hit a two-year low amid a broad-based selloff thanks to the disappointing Chinese manufacturing data. The country is Australia’s most important trading partner. The S&P/ASX declined 2.1% while the All Ordinaries lost 1.9%. The four big banks dropped as did investment bank Macquarie Group and insurer QBE. BHP Billiton slumped after the miner unveiled plans to issue hybrid capital to help refinance existing near-term liabilities. Rival Rio Tinto and Fortescue Metals Group also declined. Newcrest Mining and Evolution Mining tumbled after gold prices sank overnight to extend declines for a second straight session.
The Kospi slid 1.9% on foreign fund selling on concerns a Chinese slowdown could have wider implications for global growth. However, the Sensex advanced 0.7% after falling in early trading on concerns about slower growth in China, the fallout from the Volkswagen emissions scandal and uncertainty about the Federal Reserve’s first interest rate increase.
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*
Japan’s September flash manufacturing PMI will be reported. Germany’s September Ifo survey is on tap. In the US, September durable goods orders and the weekly jobless claims, money supply and Fed balance sheet will be reported. Fed Chair Janet Yellen speaks at 5:00 PM US EDT.
*Note — all releases are listed in local time.