Global Market Report - December 6 2017

Global markets were weaker amid a shift in sentiment away from the technology sector

Morningstar 07/12/2560


Markets in the region followed Wall Street’s move lower on Tuesday night, with Hong Kong and Japan indices the worst performers on Wednesday with day-on-day falls of around 2%. The near-500 point fall in the Nikkei 225 took the index closed to 22,000 points level, around 1,000 points lower than a month ago. A strengthening in the yen since the end of November has taken its toll on the Japanese equity rally in recent weeks, combined with a shift in sentiment away from the technology sector, which is well represented in the country's indices. Losses in Chinese benchmarks were mitigated by a rise in the Shenzhen Composite index.


European equities tracked the global change in sentiment, falling as the euro strengthened on better-the-expected performance from German factories. German construction and retail PMIs for November all showed healthy expansion, while Italy’s retail sector contracted during the month.

In the UK the FTSE 100 was just in the red in midmorning trading. In company news, commercial property giant Hammerson (HMSO) has agreed to buy FTSE 250 shopping mall operator Intu (INTU). The news dragged down Hammerson’s share price, but gave an immediate 20% boost to Intu. FTSE 100 Real Estate Investment Trusts British Land (BLND) and Land Securities (LAND), which are rivals to Hammerson, were among the day’s biggest risers.

The latest company to suffer a profits warning selloff, Saga (SAGA), lost nearly 25% as it said that profits growth would be around 1-2%. It said that it had been affected by the collapse of Monarch Airlines in its travel division. EasyJet (EZJ), one of the beneficiaries of this collapse, was over 1% higher amid a rise in passenger numbers and load factor – the metric for how full a plane is on a particular journey.

North America

Canada’s central bank is expected to leave interest rates unchanged at 1%, although an upbeat estimate on the economy is expected from Governor Stephen Poloz. A rate hike is being pencilled in for the first quarter next year by analysts. In the US, the monthly ADP employment figures are expected to show that the economy added nearly 200,000 jobs in November. Non-farm payroll data on Friday are expected to show a similar increase in employment.

Broadcom (AVGO), which has gone hostile in its attempts to buy Qualcomm (QCOM) and create a global semiconductor giant, is reporting earnings today. 

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