Shares were mixed in Asia but fell in the US and Europe in low volume trade.

 

 

 

United States

 

US stocks ended lower on Wednesday as drop in crude oil prices resumed. The Dow Jones Industrials and the S&P 500 were down nearly 0.7% each, and the Nasdaq declined 0.8%. All 10 main sectors of the S&P 500 Index ended in negative territory, led by decline in the energy and materials sectors. Of note, crude oil prices fell amid an unusual rise in US crude oil inventories and signs that Saudi Arabia will keep adding to the global oil glut.

Shares in energy companies Exxon Mobil, Chevron and ConocoPhillips ended lower. Apple was the heaviest drag on the S&P 500 and the Nasdaq Composite amid reports that the iPhone maker will pay Italy's tax office 318 million euros ($348 million) to settle a dispute over allegations that it failed to pay taxes for six years. Shares in Alphabet, Google's holding company, and Amazon fell after reaching their all time highs on Tuesday.

In a light day of economic news, pending home sales in the US declined 0.9% in November from an upwardly revised October reading, according to the National Association of Realtors.

 

 

 

 

 

Europe

 

European equities declined on Wednesday as investors fretted over renewed weakness in global commodity markets. The Stoxx Europe 600 Index fell 0.5%. France's CAC 40 closed 0.5% lower and Germany's DAX fell 1.1%. UK stocks also declined for the first time in five sessions on Wednesday; the FTSE 100 index fell 0.6%.

The downward momentum in oil markets hit European energy stocks. Shares in the major energy companies BP, Total, Royal Dutch Shell and offshore drilling contractor Seadrill declined. Mining stocks such as BHP Billiton and Glencore also came under pressure as metal prices fell due to persistent concerns about a slowdown in China, the world's biggest consumer of metals. Shares in British online retailer Ocado fell due to escalating concerns over growing competition from Amazon. This dragged UK supermarkets, including WM Morrison and Sainsbury, lower. Meanwhile, Julius Baer climbed after the Swiss bank said that it has reached an agreement with US authorities to settle a long-standing probe of alleged tax evasion.

On the economic front, UK house price growth accelerated more than expected in December to reach an eight-month high. According to the report by the Nationwide Building Society, average house prices rose 0.8% in December compared with 0.1% increase in November. European Central Bank data showed that lending to the private sector in the euro area expanded in November, with a bigger bounce recorded than the previous month. Loans to households increased 1.4% in November after growing 1.2% in October, while lending to non-financial corporations expanded 0.9% last month following a 0.6% increase in October. However, money supply growth in the eurozone slowed in November.

 

 

 

 

 

Asia Pacific

 

Performance within Asia Pacific markets was mixed on Wednesday in light trading sessions as the year draws to a close. The Japanese market ended its final trading day of 2015 in positive territory, with the Nikkei 225 Index gaining 0.3%. Fujifilm Holdings rose on reports that Toshiba will likely sell its medical equipment business to the imaging company as part of restructuring efforts at Toshiba following its $1.3 billion accounting scandal. Shares in Toshiba also ended in positive territory. The Nikkei 225 Index rose 9.1% in 2015, supported by the US economic recovery and the weaker yen as well as the Bank of Japan's asset purchases.

Chinese equities reversed initial losses to end slightly higher, helped by a late rally in banking shares. Rail stocks such as China Railway Construction and CRRC rose on reports that China's state planner approved the second phase of a 170.1 kilometer railway project worth 52.9 billion yuan ($8.16 billion) in Dalian, due to be completed by 2020. Trading activity was thin as investors awaited manufacturing activity surveys for December, due on Friday, for clues on the extent of the slowdown in the world's second largest economy. On the other hand, Hong Kong’s Hang Seng index fell 0.5%, undermined by weakness in energy and financial shares, on lingering concerns over the Chinese economy.

In South Korea, the KOSPI Composite Index fell 0.3% against the backdrop of weak industrial production data. According to news reports, a South Korean regulator ordered Hyundai Motor and Kia Motors to sell part of their stakes in steelmaker Hyundai Steel to comply with regulations concerning big industrial groups. Hyundai Motor shares closed flat, while shares in Kia Motors and Hyundai Steel declined. India's Sensex fell 0.5%, led by weakness in the information technology and oil and gas sectors.

On a positive note, the Australian market gained for the ninth consecutive session, with the ASX 200 index gaining nearly 1.0% as all sectors ended in positive territory.

 

Looking forward

 

 

The following indicators will be released this week…

 

Asia/Pacific

 

 

December 31

Australia

Private Sector Credit (monthly) (November)

 

South Korea

Inflation Rate (monthly and yearly) (November)

January 1

South Korea

Balance of Trade (December)

 

 

Imports and Exports (yearly) (December)

 

China

NBS Manufacturing Purchasing Managers’ Index (December)

 

 

Non Manufacturing Purchasing Managers’ Index (December)

 

 

 

Americas

 

 

December 31

United States

Continuing Jobless Claims

 

 

Initial Jobless Claims

 

 

Chicago Purchasing Managers’ Index (December)

 

 

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.