Stock Market News (European Open) – European stocks head lower, losses limited though; Hang Seng at decade high
November 21, 2017 10:25 am
Equities in Asia were broadly on the rise during today’s trading. The Nikkei 225 and the Topix, which more widely gauges Japanese equity performance, finished the day higher by 0.7% and 0.65% respectively. Hong Kong’s Hang Seng added 1.9%, closing at its highest in a decade, and the Shanghai Composite rose by 0.55%. Australia’s S&P/ASX 200 advanced by 0.3% as RBA minutes pertaining to the central bank’s early November meeting showed policymakers not being confident about rising wage growth and thus price pressures, suggesting interesting rates could potentially stay lower for longer and pushing the local dollar to a multi-month low relative to the greenback. The currency later recovered during European trading.
Financials led gains in the Hang Seng and were one of the lead gainers within the Shanghai Composite as investors were repositioning following concerns about an overextended market and a government crackdown on shadow banking.
Europe projected a different picture to Asia – at least during early trading – with major benchmarks heading lower for the most part. Losses though were contained. At 0924 GMT, the pan-European Stoxx 600 traded 0.2% lower on the day and the blue-chip Euro Stoxx 50 down by 0.1%.
The UK’s FTSE 100, the German DAX both traded down by 0.1%. The French CAC 40 was down on the margin. The Italian FTSE MIB (up 0.2%) and the Spanish IBEX 35 (up 0.1%) outperformed relative to other major European blue-chip indices.
Attention in Europe remains on a potential breakthrough in discussions to form a coalition government in Germany. It should be noted though that yesterday’s fall in the DAX and subsequent sharp rebound to finish the day higher are indicative of investors’ assessment for strong fundamentals in Europe’s largest economy, with political uncertainty not having the capacity to alter by much the macroeconomic picture in Germany.
EasyJet (up 6.2%) sat on top of the list of gainers within the Stoxx 600 (and the FTSE 100). The airline anticipates pricing trends in Q1 2018 to be positive, while it said it was benefiting from failing rivals (for example Monarch Airlines).
Aggreko (down 9.1%), the UK-based mid-cap supplier of temporary power generation equipment, was one of the worst underperformers within the Stoxx 600 as the negative effects of discounts it made to win a contract in Argentina are seen as persisting to the detriment of financial results.
Volkswagen (up 2.3%) led gains in the DAX and the Euro Stoxx 50 after reports the automaker raised its guidance for profit and revenue for 2020, attributing it to an improving performance in Brazil and Russia. The firm also announced that it will invest more than 34 billion euros ($40 billion) through 2022 on developing electric cars, autonomous driving and other new technologies.
Dow, S&P 500 and Nasdaq 100 future contracts were last little changed with speculation on tax reforms remaining at the center of attention in the US in an otherwise quiet week with the Thanksgiving holiday on Thursday. Data on existing home sales due at 1500GMT will be gathering some attention though.
Hewlett Packard Enterprise will be reporting quarterly results after today’s market close in the US.
Equities in Asia were broadly on the rise during today’s trading. The Nikkei 225 and the Topix, which more widely gauges Japanese equity performance, finished the day higher by 0.7% and 0.65% respectively. Hong Kong’s Hang Seng added 1.9%, closing at its highest in a decade, and the Shanghai Composite rose by 0.55%. Australia’s S&P/ASX 200 advanced by 0.3% as RBA minutes pertaining to the central bank’s early November meeting showed policymakers not being confident about rising wage growth and thus price pressures, suggesting interesting rates could potentially stay lower for longer and pushing the local dollar to a multi-month low relative to the greenback. The currency later recovered during European trading.
Financials led gains in the Hang Seng and were one of the lead gainers within the Shanghai Composite as investors were repositioning following concerns about an overextended market and a government crackdown on shadow banking.
Europe projected a different picture to Asia – at least during early trading – with major benchmarks heading lower for the most part. Losses though were contained. At 0924 GMT, the pan-European Stoxx 600 traded 0.2% lower on the day and the blue-chip Euro Stoxx 50 down by 0.1%.
The UK’s FTSE 100, the German DAX both traded down by 0.1%. The French CAC 40 was down on the margin. The Italian FTSE MIB (up 0.2%) and the Spanish IBEX 35 (up 0.1%) outperformed relative to other major European blue-chip indices.
Attention in Europe remains on a potential breakthrough in discussions to form a coalition government in Germany. It should be noted though that yesterday’s fall in the DAX and subsequent sharp rebound to finish the day higher are indicative of investors’ assessment for strong fundamentals in Europe’s largest economy, with political uncertainty not having the capacity to alter by much the macroeconomic picture in Germany.
EasyJet (up 6.2%) sat on top of the list of gainers within the Stoxx 600 (and the FTSE 100). The airline anticipates pricing trends in Q1 2018 to be positive, while it said it was benefiting from failing rivals (for example Monarch Airlines).
Aggreko (down 9.1%), the UK-based mid-cap supplier of temporary power generation equipment, was one of the worst underperformers within the Stoxx 600 as the negative effects of discounts it made to win a contract in Argentina are seen as persisting to the detriment of financial results.
Volkswagen (up 2.3%) led gains in the DAX and the Euro Stoxx 50 after reports the automaker raised its guidance for profit and revenue for 2020, attributing it to an improving performance in Brazil and Russia. The firm also announced that it will invest more than 34 billion euros ($40 billion) through 2022 on developing electric cars, autonomous driving and other new technologies.
Dow, S&P 500 and Nasdaq 100 future contracts were last little changed with speculation on tax reforms remaining at the center of attention in the US in an otherwise quiet week with the Thanksgiving holiday on Thursday. Data on existing home sales due at 1500GMT will be gathering some attention though.
Hewlett Packard Enterprise will be reporting quarterly results after today’s market close in the US.
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