Global Market Report - November 7 2017

Japan's Nikkei closed at its highest level in 25 years, while UK retail stocks were under pressure after poor industry sales figures

Morningstar 08/11/2560

Asia

Japanese indices were again the pick of the region’s equity markets, with the Nikkei 225 surging nearly 400 points to just below 23,000, its highest close since 1992. A weakening of the yen against the dollar and stronger corporate earnings helped sentiment, while electronics and oil-related stocks boosted the country’s Topix index. Hong Kong’s Hang Seng is also close to breaching a key resistance level, after a strong showing from Tencent (00700) pushed the index to just below 29,000 points – a 10-year high. In China, the CSI 300 index pushed nearly 1% higher.

Europe

In continental Europe, Germany’s Dax managed to remain in positive territory despite a fall in share price of carmaker BMW (BMW), after it missed forecasts for third-quarter earnings.

UK retail stocks were under pressure after the British Retail Consortium published figures showing a 1% fall in sales in October, compared with a near-2% the previous month. Shares in B&Q owner Kingfisher (KGF), Marks & Spencer (MKS) and Next (NXT) were among the biggest fallers on Tuesday morning. Shares in Associated British Foods (ABF) were also among the biggest fallers despite another strong performance in discount retailer Primark over the year.

In contrast, tobacco stock Imperial Brands (IMB) was at the top of the FTSE 100 as revenue and profits were higher in 2017 than the previous year. Basic earnings per share more than doubled to 147p.

North America

While the biggest names in technology have already reported their earnings, Tuesday sees the release of figures from Snapchat owner Snap (SNAP), a company that listed in March at $27 and is now trading just below $15 per share. Investors will be focusing on research and development costs and how the tech company can follow the release of its sunglasses that allowed wearers to record live video on the go.

US investors will also be closely watching the latest developments in the potential $130 billion takeover bid for semiconductor firm Qualcomm (QCOM) by rival Broadcom (AVGO), which offered $70 per share and could go hostile if the bid is not accepted. Both companies make chips that make smartphones like the Apple iPhone run faster, and they are heavily invested in developing 5G, the next generation of phone technology. Qualcomm’s shares spiked to $65 per share on the news, but closed just over 1% higher on the day and are only marginally higher in after-hours trading.

In economics, US consumer credit figures are released at stock market close - $17 billion is forecast to have been lent to American consumers in September, from $13 billion the previous month.

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