On 18 January, 2016 – Most global markets declined
Most European and Asian markets fell, although oil prices pared some losses. US markets were closed yesterday for Martin Luther King Jr. Day.
Europe
European stocks switched between gains and losses on Monday, with energy company shares coming off session lows as oil prices pared declines. Trading volume was lower than usual as US markets are closed for the Martin Luther King, Jr. holiday. The Stoxx Europe 600 fell 0.2%, Germany’s DAX 30 rose 0.1%, France’s CAC 40 slid 0.2% to 4,203.54 but the UK’s FTSE 100, trading at a three-year low, rose 0.1%.
Prices for Brent crude and West Texas Intermediate crude were off session lows after a report that Oman is ready to cut oil production by 5% to 10%. Shares of European oil shares were lower, but some companies posted gains. For instance, shares in France’s Total and Finnish oil refiner Neste Oil Oyj rose. However, Tullow Oil and Italian energy-services contractor Saipem declined. Meanwhile, shares in Renault fell even after the car maker reported a 3.3% rise in global last year. Shares in Adidas surged after the German sportswear maker announced that Karsten Rorsted will become its CEO in October. Goldman Sachs upgraded LVMH Moët Hennessy Louis Vuitton to a buy rating from neutral, but its shares declined. In a broader research note, Goldman projected a 20% upside in shares of European luxury goods makers over the next 12 months.
Asia Pacific
Chinese shares edged up on Monday following a roller-coaster week, reflecting moves by Chinese authorities to stabilize the yuan and bargain hunting by investors. The Shanghai Composite Index rose 0.4%. Markets were propped up by an announcement that China will require foreign banks engaged in offshore yuan trading to place reserves with the central bank. The step was aimed at speculators, who have been pushing the yuan sharply lower in offshore trading as expectations on China’s economy sour. However, the stabilisation seen in Chinese markets may be short lived. Investors expect China to report that its economy grew at around 7% last year, the slowest pace in a quarter-century.
Elsewhere in Asia, most shares slipped amid worries about slowing growth in China and a further drop in oil prices. Australia’s S&P ASX 200 was down 0.7%, while the Nikkei Stock Average lost 1.1%. Hong Kong’s Hang Seng Index slid 1.5%, and South Korea’s Kospi was flat. India, which is expected to grow faster than many Asian countries, has also been caught up in the recent global stock market rout. The country’s benchmark S&P BSE Sensex had lost 6.3% of its value this year through Friday. On Monday, the Sensex was trading slightly lower.
Global Stock Markets
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*
The following indicators will be released this week…
Europe
January 19
EU
Current Account (November)
Inflation rate (monthly and yearly) (December)
ZEW Economic Sentiment Index (January)
UK
Core inflation rate (December)
Retail Price Index (monthly and yearly) (December)
Inflation rate (monthly and yearly) (December)
Asia/Pacific
January 19
China
GDP growth rate (Q4)
Americas
January 19
United States
Redbook
NAHB Housing Market Index (January)
*Note — all releases are listed in local time.