Market Briefing: UK markets closed higher yesterday, following a rebound in oil companies
Date
9/29/2016 5:55:34 AM
(MENAFN- ProactiveInvestors - UK) Proactive Investors, 08:27
UK Market Snapshot
UK markets closed higher yesterday, following a rebound in oil companies. Royal Dutch Shell and BP added 0.7% and 1.0%, respectively, tracking higher crude oil prices. UK Mail Group rallied 43.3%, after Germany-based, Deutsche Post DHL Group, agreed to buy the former for £242.7 million. Smiths Group climbed 4.0%, as its pretax profit rose for the fiscal 2016. The company reported a marginal decline in its adjusted operating profit for the same period. Royal Bank of Scotland Group gained 1.0%, after the lender agreed to pay $1.1 billion to a US regulator to resolve two claims about mortgage-backed securities. On the contrary, J Sainsbury lost 3.9%, after it reported weaker comparable sales for the second quarter. The FTSE 100 rose 0.6%, to close at 6,849.4, while the FTSE 250 gained 0.9%, to settle at 17,792.3.
US Market Snapshot
US markets ended firmer yesterday, helped by a surge in energy sector shares after the OPEC agreed to limit crude oil output for the first time in eight years. Chevron, Exxon Mobil and Devon Energy climbed 3.2%, 4.4% and 8.3% respectively. BlackBerry jumped 5.7%, after the smartphone company boosted its guidance for the full year and named its new Chief Financial Officer (CFO), Steven Capelli. On the losing side, Tempur Sealy International sank 22.4%, after the company slashed its financial outlook for the year. NIKE declined 3.8%, as it reported a slowdown in growth for future sales. AT & T lost 1.5%, after a leading broker downgraded its rating on the stock to 'Neutral' from 'Buy' and also reduced its target price to $43.0 from $46.0. The S & P 500 advanced 0.5%, to settle at 2,171.4. The DJIA gained 0.6%, to settle at 18,339.2, while the NASDAQ rose 0.2%, to close at 5,318.5.
Europe Market Snapshot
Other European markets finished in positive territory yesterday, bolstered by a rally in energy producers and a rebound in banking sector shares. Deutsche Bank climbed 3.2%, after it agreed to sell its Abbey Life insurance business to Phoenix Group in a deal valued at €1.09 billion. Other lenders, BNP Paribas, Banco Santander and Commerzbank advanced 1.0%, 1.3% and 1.5%, respectively. TOTAL, Repsol and Statoil gained 0.5%, 1.0% and 1.1%, respectively, as crude oil prices jumped. Anheuser-Busch InBev rose 1.2%, after its shareholders approved all resolutions regarding its $100.0 billion-plus merger with competitor, SABMiller. Deutsche Post edged up 0.9%, after it agreed to acquire UK Mail Group for £242.7 million. The FTSEurofirst 300 index added 0.7%, to close at 1,348.3. Among other European markets, the German DAX Xetra 30 rose 0.7%, to close at 10,438.3, while the French CAC-40 advanced 0.8%, to settle at 4,432.5.
Asia Market Snapshot
Markets in Asia are trading higher this morning, amid an overnight rally in crude oil prices. In Japan, Tokuyama has soared 16.0%, after the company stated that it will sell its Malaysian unit to the South Korean OCI Co. Oil giants, JX Holdings, Inpex and Japan Petroleum Exploration have jumped 3.3%, 6.7% and 9.4%, respectively. Bucking the trend, Nippon Express and Nichirei have declined 2.1% and 3.4%, respectively. In Hong Kong, oil stocks, Sinopec Oilfield Service, China Petroleum & Chemical and CNOOC have advanced 4.1%, 4.6% and 5.8%, respectively. In South Korea, index majors, POSCO and Samsung Electronics have gained 0.7% and 2.9%, respectively. The Nikkei 225 index is trading 1.4% higher at 16,699.2. The Hang Seng index is trading 0.3% up at 23,693.7, while the Kospi index is trading 0.9% higher at 2,071.2.
Commodity, Currency and Fixed Income Snapshots
Crude Oil
At 0330GMT today, Brent Crude Oil one month futures contract is trading 0.12% or $0.06 lower at $48.63 per barrel. Yesterday, the contract climbed 5.92% or $2.72, to settle at $48.69 per barrel, on the back of news that the OPEC agreed to limit the crude oil production in November. Additionally, the US Energy Information Administration reported that domestic crude inventories fell unexpectedly for a fourth week in a row, by 1.9 million barrels for the week ended 23 September 2016.
Gold
At 0330GMT today, Gold futures contract is trading 0.70% or $9.20 higher at $1328.60 per ounce. Yesterday, the contract declined 0.50% or $6.60, to settle at $1319.40 per ounce, extending its losses from the prior session, amid a rally in global equities.
Currency
At 0330GMT today, the EUR is trading 0.11% higher against the USD at $1.1229, ahead of the Germany's unemployment rate and consumer price index, both for September, slated to release today. Yesterday, the EUR rose marginally versus the USD, to close at $1.1217. Meanwhile, German GfK consumer confidence surprisingly dropped in October.
At 0330GMT today, the GBP is trading 0.05% higher against the USD at $1.3026, ahead of the UK mortgage approvals and consumer credit data, both for August, due to release in a few hours. Additionally, UK's GfK consumer confidence for September is scheduled to release later in the day. Also, the US annualised GDP growth for the second quarter, set to release later today, will be keenly monitored by the investors. Yesterday, the GBP weakened marginally versus the USD, to close at $1.3019. In other macro news, US durable goods orders remained flat in August.
Fixed Income
In the US, long term treasury prices fell and pushed yields mostly higher, as equity markets rallied following a rise in crude oil prices after the OPEC decided to cap crude oil production. Yesterday, yield on 10-year notes added 1 basis point to 1.57%, while yield on 2-year notes remained unchanged at 0.75%. Meanwhile, 30-year bond yield rose 1 basis point to 2.29%.
Key Economic News
Draghi defended ultra-loose ECB policy before German lawmakers
The European Central Bank (ECB) President, Mario Draghi, at a hearing at the Bundestag, rejected German criticism that sub-zero interest rates were impoverishing savers and that the central bank's monetary policy was a necessity to get the Euro zone back on the path to growth and to revive inflation in the region. He further added that if the ECB's decisions continue to be constantly attacked, the central bank might be forced to take more extensive measures to be effective.
German consumer confidence index fell surprisingly in October
In October, the consumer confidence index in Germany dropped unexpectedly to 10.00, compared to market expectations of a steady reading. In the prior month, the consumer confidence index had recorded a reading of 10.20.
French consumer confidence steadied in September
Consumer confidence in France remained unchanged at 97.00 in September, meeting market expectations.
Italian consumer confidence index eased in September
The consumer confidence index dropped to 108.70 in Italy, in September, lower than market expectations of a drop to 109.00. In the prior month, the consumer confidence index had registered a revised level of 109.10.
Italian wage inflation steadied in August
In August, the wage inflation remained steady at 0.00% in Italy.
Italian annual wage inflation remained flat in August
In Italy, the annual wage inflation remained unchanged at a level of 0.60% in August.
Swiss UBS consumption indicator advanced in August
Consumption indicator recorded a rise to 1.53 in Switzerland, in August. UBS consumption indicator had recorded a revised reading of 1.45 in the prior month.
US mortgage applications declined in the last week
On a weekly basis, mortgage applications registered a drop of 0.70% in the week ended 23 September 2016, in the US. In the prior week, mortgage applications had dropped 7.30%.
US non-defence capital goods orders (ex aircraft) unexpectedly advanced in August
On a MoM basis in August, the flash non-defence capital goods orders (ex aircraft) unexpectedly advanced 0.60% in the US, more than market expectations for a drop of 0.10%. The non-defence capital goods orders (ex aircraft) had registered a rise of 1.50% in the previous month.
US durable goods orders remained steady in August
In August, on a MoM basis, the flash durable goods orders remained unchanged in the US, more than market expectations for a fall of 1.50%. In the prior month, durable goods orders had advanced by a revised 3.60%.
US non-defence capital goods shipments (ex aircraft) surprisingly dropped in August
On a monthly basis, the flash non-defence capital goods shipments (ex aircraft) unexpectedly dropped 0.40% in August, in the US, lower than market expectations for an advance of 0.10%. In the previous month, the non-defence capital goods shipments (ex aircraft) had registered a drop of 0.50%.
US durable goods orders (ex transportation) dropped less than expected in August
On a monthly basis, the flash durable goods orders (ex transportation) dropped 0.40% in the US, in August, less than market expectations for a fall of 0.50%. Durable goods orders (ex transportation) had climbed 1.30% in the previous month.
Japanese large retailer's sales registered a drop in August
Large retailer's sales fell 3.60% in Japan on a MoM basis, in August. Large retailer's sales had advanced 0.60% in the prior month.
Japanese retail trade dropped more than expected in August
Retail trade registered a drop of 1.10% on a monthly basis in August, in Japan, more than market expectations for a fall of 0.60%. In the prior month, retail trade had advanced by a revised 1.50%.
Japanese investors remained net buyers of foreign stocks in the previous week
Japanese investors were net buyers of ¥38.90 billion worth of foreign stocks in the week ended 23 September 2016, from being net buyers of ¥293.40 billion worth of foreign stocks in the prior week.
Japanese small business confidence index recorded a rise in September
In September, the small business confidence index registered a rise to 47.70 in Japan, compared to a level of 46.30 in the prior month. Markets were anticipating the small business confidence index to rise to a level of 46.90.
Foreign investors remained net sellers of Japanese bonds in the previous week
Foreign investors were net sellers of ¥2804.90 billion worth of Japanese bonds in the week ended 23 September 2016, from being net sellers of ¥526.10 billion worth of Japanese bonds in the prior week.
Foreign investors became net sellers of Japanese stocks in the previous week
Foreign investors were net sellers of ¥211.70 billion worth of Japanese stocks in the week ended 23 September 2016, as compared to being net sellers of ¥817.40 billion worth of Japanese stocks in the previous week.
Japanese investors became net buyers of foreign bonds in the previous week
Japanese investors were net buyers of ¥1178.60 billion worth of foreign bonds in the week ended 23 September 2016, from being net buyers of ¥1376.10 billion worth of foreign bonds in the prior week.
Japanese retail trade declined more than expected in August
Retail trade in Japan fell 2.10% on a YoY basis in August, more than market expectations for a drop of 1.70%. In the prior month, retail trade had registered a drop of 0.20%.
Proactive Investors