Asia
Markets in Asia-Pacific were broadly higher on Friday morning, despite some modest falls on Wall Street overnight. Japan’s market cap-weighted Topix was the best performer in the region in percentage terms, rising nearly 1%, while the Nikkei 225 inched higher without closing above the key 24,000 points level. Markets in Hong Kong and mainland China were also higher on Thursday’s close, maintaining their strong start to the year on optimism over the Chinese economy. Hong Kong's Hang Seng closed at a new record high.
Europe
The FTSE 100 inched higher as currency moves pulled in two directions: sterling made an advance towards the $1.40 level last seen before the Brexit vote, but the pound slipped against the euro. Share price moves were unremarkable in the FTSE 100, but this was not the case lower down the market, where profit warnings from Carpetright (CPR) and Dignity (DTY) pushed the shares down nearly 50%. Carpetright drastically lowered its profits forecasts for the year from around £14 million to as low as £2 million.
Retail sales figures for December reinforced the message that the retail sector remains a tricky one for companies to do business in. Retail sales, excluding fuel, were expected to have grown by 2.6% in December on the same month of 2016, but the figure came in at 1.3%.
Germany’s Dax was the best performing of the eurozone exchanges.
Next week, European investors will be braced for the first European Central Bank meeting of the year. The ECB is to halve its bond purchases from €60 billion to €30 billion this month. The Bank of England is not meeting in January, but will reconvene in February 8, when the quarterly Inflation Report will be unveiled.
North America
The first leg of the Q4 earnings season is over, with US banks revealing a difficult quarter hampered by slower trading and one-off tax charges. A full earnings calendar is due on Monday, with Netflix (NFLX) giving a glimpse of how the US tech sector fared at the end of the year. Technology firms are expected to reveal some of the biggest charges relating to recent tax forms, especially those involving the repatriation of overseas earnings. Still, tech firms are also to among the best performing of US corporations over the period.
In economics, the closely watched University of Michigan sentiment index will be released for January, which is expected to see a rise from December.
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