On 05 September, 2016 – Global markets advanced
European shares rose, while Asian markets were supported by global cues. US markets were closed yesterday for Labour Day.
Europe
European shares edged higher to reach an eight-month peak on Monday. The pan-European STOXX 600 index was up 0.1% after setting its highest level since early January and building on a 2% rise in the previous session. France’s CAC 40 was roughly unchanged, while Germany’s DAX 30 slipped by 0.1%.
European markets were supported by Swiss software maker Temenos, whose shares surged after Credit Suisse raised its stance on the stock to “outperform” from “neutral”. Telecom company SFR also rose strongly after rival French telecommunications group Altice said it planned to simplify its ownership structure by exchanging its shares for the outstanding 22.25% of shares of SFR that it does not already own.
However, gains were clouded by a survey that indicated that business growth in the eurozone was at its weakest since the start of last year in August. This indicates that the already struggling economy is losing what little momentum it had.
Meanwhile, UK stocks retreated on Monday, with the FTSE 100 falling 0.22%, as banking stocks declined. Moreover, a stronger-than-expected services-sector update dampened expectations for further monetary easing from the Bank of England. Shares in Royal Bank of Scotland and Lloyds Banking Group tumbled after Deutsche Bank downgraded their ratings. However, commodity and utility shares, such as Randgold Resources and BHP Billiton registered gains.
On the economic front, Markit/CIPS said its UK services-sector Purchasing Managers’ Index logged its largest monthly gain in two decades.
Asia Pacific
Shares in Asia were broadly higher Monday, as weaker-than-expected US jobs data eased worries over an imminent interest-rate increase by the US Federal Reserve. The Nikkei Stock Average rose 0.7%, Hong Kong’s Hang Seng Index advanced 1.7%, while Australia’s S&P/ASX 200 and the South Korean Kospi each gained 1.1%.
Energy and commodities-related stocks gained. In Australia, shares in BHP Billiton, Rio Tinto and Woodside Petroleum rose. In Japan, shares were boosted by robust labour data, which showed cash wages rising for the second straight month in July due to an increase in special bonus payments. Shares in Toyota Motor were relatively unchanged, while Nissan Motor gained. Meanwhile, South Korea’s Hanjin Shipping was among the region’s biggest stock decliners. However, shares in Samsung Electronics rose 0.6% after declines last week amid troubles with the company’s new Galaxy Note 7 smartphone.
Looking forward
The following indicators will be released this week…
Europe
Sep 6
Eurozone
Gross Domestic Product (Q2.2016)
Germany
Manufacturing Orders (July)
Sep 6
Eurozone
Gross Domestic Product (Q2.2016)
Germany
Manufacturing Orders (July)
Americas
Sep 6
United States
Services PMI (August)
Global Stock Markets
*Note — all releases are listed in local time.
Source: Fidelity
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