On 25th January 2016 – Global stock indices mixed

Asia rallied while Europe and the US retreated.
United States
After sliding modestly at the start, Monday turned into a selloff in the final hour of trading amid a renewed drop in crude. Unsurprisingly, energy was the worst performing major sector. The Dow Jones industrials were down 1.3 percent and the S&P and Nasdaq tumbled 1.6 percent. Materials stocks slumped as paper and packaging companies lost ground.
Exxon Mobil and Chesapeake Energy retreated. Shares of paper and packaging companies stumbled on concerns about product prices, which led to downgrades from several investment firms. WestRock, Packaging Corporation and International Paper declined. Tyco International and Johnson Controls announced they would combine in a US$3.9 billion deal. Tyco makes fire suppression systems and Johnson Controls makes ventilation systems, auto seating and car batteries. Both stocks have struggled as investors worried about their growth. Tyco advanced while Johnson Controls retreated. Verizon Communications shares were up. McDonald’s advanced after the restaurant chain said its United States sales grew 5.7 percent in the fourth quarter, its best result in more than three years. Halliburton declined after posting a quarterly loss.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$10.35 to US$1,106.60. Copper futures were down 0.6 percent to US$1.99. WTI spot crude was down US$2.34 to US$29.85. Dated Brent spot crude was down US$2.08 to US$30.10. The US dollar was up against the pound and the Canadian and Australian dollars. However, it declined against the euro, yen and Swiss franc. The Dollar Index was down 0.2 percent. The yield on US Treasury 30 year bond was down 3 basis points to 2.79 percent while the yield on the 10 year note declined 4 basis points to 2.01 percent.
Europe
European markets retreated Monday after rallying at the end of last week. The markets swung back and forth between gains and losses over the course of the trading session. Ultimately, the pullback in crude oil prices and weakness in financial stocks proved too strong to overcome. The FTSE retreated 0.4 percent, the CAC declined 0.6 percent, the DAX was down 0.3 percent and the SMI lost 0.2 percent. Profit taking also contributed to the weak performance in Europe Monday. The markets staged a two-day rally at the end of the prior trading week. Investors are also looking forward to Wednesday’s Federal Reserve meeting announcement.
S&P upgraded its sovereign rating for Greece as it expects the nation to meet the conditions attached to €86 billion bailout package. The agency lifted the ratings to ‘B-‘ from ‘CCC+’ with stable outlook. The Greek government has recapitalized the country’s systemic banks and put into place budgetary consolidation measures since last summer. Moreover, the economy proved more resilient than previously expected despite multiple shocks. The rating agency expects Greece to meet the conditionality attached to the bailout package, opening the way for discussions on official debt relief.
Wincor Nixdorf climbed after the automated teller machines maker upgraded its earnings guidance for the current fiscal year 2015/2016. Siemens gained after it agreed to buy CD-adapco, a privately held US engineering software firm. Automakers BMW, Daimler and Volkswagen were down. US regulators announced a new recall of about 5 million vehicles with potentially defective Takata Corp air bags. Banks including Deutsche Bank, Commerzbank, Société Générale, Crédit Agricole and BNP Paribas finished lower. In London, Kingfisher dropped after the home improvement retailer as investors reacted negatively to the cost of a plan to boost its profit. The plan will cost £800 million over the next five years to deliver. BT Group was down after a report into broadband investment from cross-party MPs urged the company to spin off its Openreach access network business. Royal Bank of Scotland, Lloyds Banking Group, Barclays and Standard Chartered retreated. Miners including BHP Billiton, Antofagasta and Rio Tinto declined.
German business confidence eased sharply at the start of the year to its weakest level in 11 months, as global concerns such as market volatility and the slowdown in the emerging economies hurt expectations significantly. The Ifo business climate index dropped to 107.3 from 108.6 the month before.
Asia Pacific
Asian shares continued to rally Monday after oil prices rose above $32 a barrel following the onset of a massive snowstorm on the US East Coast and Chinese shares began the week on a firm note amid indications that the Chinese government will hold the yuan steady. Chinese officials at the Davos World Economic forum in Switzerland last week said they have no intention of pushing the value of the yuan down further to gain a competitive advantage. Investors also noted gains in US stocks that helped them notch their first weekly gain in a month.
The Shanghai Composite was up 0.8 percent, extending a weekly gain after the government pledged to address overcapacity in sectors such as steel and coal and the offshore yuan rose for the first time in five days. The Hang Seng added 1.4 percent.
The Nikkei was up 0.9 percent, building on the 6 percent surge in Friday’s session despite a firmer yen and weak trade data. Both Japanese exports and imports contracted more than expected in December. Exports fell 8.0 percent on the year and imports tumbled 18 percent from a year earlier. The surplus was ¥140 billion. Fast Retailing and Softbank advanced. Energy explorer Inpex, JX Holdings and Japan Petroleum rallied. Japan Tobacco soared on reports it is considering increasing the price of Mevius products by ¥10 per pack. Sharp retreated on profit taking after sharp gains last week. Takata plummeted after US regulators announced a new recall of about 5 million vehicles equipped with its airbag inflators. Toshiba dropped to hit a near 7-year low on reports it plans to sell part of its chip business.
Both the S&P/ASX and All Ordinaries added 1.8 percent. The big four banks all advanced. Woodside Petroleum and Santos climbed after oil prices soared 10 percent on Friday to post one of their biggest daily rallies ever. Miners ended mixed, with Atlas Iron and BHP Billiton closing marginally higher while Rio Tinto declined. The Kospi was 0.7 percent higher while the Sensex added 0.2 percent.
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*
China reports October industrial production and retail sales. The UK posts the October labour market report. In the US, banks are closed for the Veterans Day holiday but markets are open.
*all releases are listed in local time.