Global Market Report - October 11 2017

Japan's Nikkei index hit a 21-year high on Wednesday, while Spanish shares rallied amid signs of a diplomatic breakthrough in the Catalonia crisis

Morningstar 12/10/2560

Asia

Japanese indices continued their march higher on Wednesday, helped by news that one of the prime minister’s biggest rivals in the election, Yuriko Koike, will not be standing against Shinzo Abe. Another positive closed on Wall Street also provided momentum. The country’s Nikkei index closed at its highest level in 21 years at 20,881.27, while the market-capitalisation weighted Topix is at levels last seen just before the financial crisis in 2007-2008.

Chinese economy watchers will be awaiting news of September’s supply of new loans, which are expected to be 1.2 trillion yuan, versus around 1 trillion yuan the month before. China’s CSI 300 closed higher but is still a way of the 2015 highs.

Europe

Spanish stock markets rallied after Catalonia’s president drew back from declaring independence for the region and described constructive dialogue with the central government. The country’s Ibex index was up over 1.5% at 10,299 in midmorning trading. Nevertheless, Catalonia’s leader says the referendum vote for independence is still valid.

Elsewhere, gains for Germany’s Dax and France’s Cac indices were held back by the gains in the euro. In London, the FTSE 100 was a touch lower on Tuesday’s closing levels: orthopaedic device maker Smith & Nephew (SN) was the biggest riser on reports that activist investor Elliott had bought a stake in the firm. Shares in the paper and packaging company Mondi (MNDI) were off over 8% as it warned on profits. 

North America

Minutes of the last Federal Reserve meeting in September, which kicked off the unwinding of the central bank’s balance sheet and teed up an interest rate rise in December, will be released during the market trading session.

The Toronto Stock Exchange closed up on Tuesday, near record high levels seen at the start of this year, helped by the IMF’s forecast that Canada would be the fastest growing G7 nation this year.

Investors are awaiting the start of the US earnings season tomorrow. In the meantime, the biggest stock market drama appears to be focused on consumer goods firms Procter & Gamble (PG), which is fighting to wrestle back control from activist investors Trian. 

Stokc futures suggest that US markets will remain largely unchanged at the open.

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