On 29 September, 2015 – Global growth concerns continue to weigh on sentiment

Stocks in the Asia Pacific region tumbled while those in Europe and the US stabilized somewhat but still declined on the day. Continued worries about global growth obscured mostly positive economic data from the Eurozone, the UK and US.
United States
Stocks gyrated between gains and losses Tuesday as health shares rebounded from heavy losses incurred in the last week. The Dow Jones industrials added 0.3% while the S&P inched up 0.1%. However, the Nasdaq lost 0.6%. Investors are waiting for key economic data that will be released later in the week culminating in the nonfarm payrolls number on Friday.
Worries over China have resurfaced recently, pushing commodity prices lower and hurting mining companies stocks. The fallout from Volkswagen’s scandal is also a worry as investors fear a regulatory clampdown on the auto industry. At the same time, Federal Reserve officials are signaling that they will raise interest rates this year to end of the ultralow interest rates that have underpinned stock markets for the last six years.
IHS advanced after the information and analytics provider said profits in its latest quarter were up 26%. Yahoo was up a day after the Internet company’s board decided to proceed with spinning off its Alibaba stake. Nexstar gained after activist investor Starboard Value urged regional TV company Media General to sell itself to Nexstar. Republic Airways gained on a broker upgrade. Energy stocks followed oil prices higher.
September consumer confidence index rose to 103.0 topping expectations of 96.0. The September reading was the highest since January.
Gold at the afternoon London fixing was up US$1.05 to US$1,132.10. Copper futures were up 0.4% to US$2.26. WTI spot crude was up 75 US cents to US$45.18. Dated Brent spot crude was up 87 US cents to US$48.21. The US dollar was down against the euro, yen and Swiss franc. It was virtually unchanged against the Australian dollar. It advanced against the pound and Canadian dollar. The Dollar Index was down 0.15%. The yield on US Treasury 30 year bond was down 2 basis points to 2.86% while the yield on the 10 year note declined 5 basis points to 2.05%.
Europe
Stocks retreated again on Tuesday. Mining stocks regained some ground today, after weak Chinese economic data Monday sparked a drop in commodity prices. Pharmaceutical stocks were down, following weakness in US pharma and biotech stocks. The FTSE retreated 0.8%, the SMI declined 0.7% and both the CAC and DAX lost 0.3%.
Continental climbed on a broker upgrade. However automakers Volkswagen, BMW and Daimler declined. Axel Springer slid after it agreed to acquire an 88% stake in US based business and financial news website Business Insider for €306 million. RWE and E.ON increased. Fresenius and Fresenius Medical Care declined. In Paris, Sanofi dropped after the company and US-based Eli Lilly entered into a settlement agreement to resolve patent litigation regarding its insulin glargine product, Basaglar. Both Technip and Total advanced. Both Peugeot and Renault were higher on the day.
In London, Wolseley plunged after the company reported a sharp decline in profit for the year, reflecting impairment and certain exceptional charges. Mitie Group said it has had a good start to the year with good organic revenue growth driven by new and recently expanded contracts. Glencore surged, recovering some of the sharp losses of the previous session. BHP Billiton, Antofagasta and Rio Tinto climbed. Hikma Pharmaceuticals and Shire retreated. SABMiller climbed after people familiar with the matter said Anheuser-Busch InBev is lining up banks to arrange as much as US$70 billion in financing as it prepares to make a takeover bid for the brewer.
September Eurozone economic confidence improved to a 4-year high withstanding concerns about China woes and slow global growth. The economic sentiment index rose to 105.6 — the highest since June 2011, from a revised 104.1 in August.
Germany’s consumer prices remained unchanged in September following an increase of 0.2% in both July and August. UK high street sales and orders logged stronger than expected growth in September according to the latest Distributive Trades Survey from the Confederation of British Industry. The retail sales balance rose to plus 49% from plus 24% in August.
Asia Pacific
Stocks retreated Tuesday, following the sharp losses in US shares during the Monday global market day. Weak Chinese industrial profits data combined with the IMF’s warning of slower economic growth for commodity exporters over the 2015 to 2017 period spooked investors. Mixed messages from Federal Reserve officials, who are looking for further progress in the labor market and upward pressure on inflation, also did little to provide clarity on when the Fed would raise rates.
The Shanghai Composite dropped 2.0% in thin trading, reflecting anxiety ahead of PMI manufacturing numbers slated for release on October 1 and the seven day National Holiday starting on Thursday during which time the markets will be closed. The Hang Seng tumbled 2.0% to its lowest level since July 2013 as trading resumed after a long weekend.
The Nikkei plunged 4.0% to an eight-month low with a stronger yen weighing on sentiment. Canon, Honda Motor, Nissan Motor, Sharp Corp, Panasonic and Sony tumbled. Energy related stocks such as Inpex and JX Holding dropped. Steelmaker Kobe Steel plummeted after a profit warning. Also lower were trading house Mitsui and construction machinery manufacturer Komatsu. Softbank declined after Yahoo said it would proceed with the planned spinoff of its stake in Alibaba Group. Daiichi Chuo Kishen Kaisha shares were placed in a trading halt on a Nikkei report that the bulk carrier will apply for bankruptcy protection as early as Tuesday. Mitsui OSK Lines retreated along with Kawasaki Kisen Kaisha. Japan Tobacco dropped on reports the company has entered the final stages of talks to buy Reynolds American’s subsidiary Santa Fe Natural Tobacco.
BoJ Governor Haruhiko Kuroda told business leaders in Osaka on Monday that employment and wage growth should rise further in order to attain the country’s inflation target. With a slowdown in emerging economies, particularly China, leading to the sluggishness in Japan’s exports and production, he vowed to make adjustments without hesitation if judged necessary to reach the consumer price target at the earliest possible time.
The S&P/ASX and All Ordinaries tumbled 3.8% and 3.6% respectively — resource stocks got hammered in the face of weaker commodity prices on renewed concerns about China. Miners Rio Tinto, BHP Billiton and Fortescue Metals Group tumbled after London-listed commodities group Glencore lost almost one third of its value overnight on the back of concerns about the Chinese economy and downbeat analyst comments that Glencore and another debt laden mining firm Anglo American could see their value “evaporate” if low commodities prices persist.
The Sensex however, added 0.6% after the Reserve Bank of India surprised and cut its interest rate by 50 basis point to 6.75% thanks to cooling inflation and the FOMC’s decision on September 17 to leave interest rates unchanged. This marks the fourth repo rate cut by the RBI since January 2015. Describing the decision as a “front-loaded policy action”, RBI Governor Raghuram Rajan said he would work with the government to ensure that impediments to banks passing on the bulk of the cumulative 125 basis points cut in the policy rate this year are removed. With the Indian economy facing multiple headwinds, Rajan said that the central bank will remain accommodative to the extent possible.
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*
August industrial production and retail sales will be posted in Japan. France releases July and August consumption of manufactured goods and August producer prices. Germany posts September unemployment. The UK reports its final second quarter gross domestic product data. The Eurozone releases August unemployment and September flash harmonized index of consumer prices. In the US, ADP private employment for September will be posted along with September’s Chicago PMI index.
*Note — all releases are listed in local time.