Global Market Report - April 9, 2018

Asia and European equities were resilient on Monday in the face of US stock market falls last week

Morningstar 11/04/2561

Asia

Markets in Asia-Pacific showed resilience after Friday’s fall in US equities, which had been triggered by a sharp drop in US monthly employment numbers. Indeed, with the current market volatility sparked by, among other risks, a trade war between the US and China, this could have sparked another selloff in Asian equities. The Japanese consumer confidence index for March came in a touch below expectations on Monday, but Japan’s Nikkei 225 edged up by around half a percent, or over 100 points to 21, 678 points. The index is still a long way off from the highs above 24,000 points at the start of the year, as global volatility and a minor yen resurgence against the dollar have hampered attempts to move beyond 25-year highs.

Hong Kong’s Hang Seng was the best performing large stock market in percentage terms on Monday, rising nearly 400 points to above 30,000 points.

Europe

The ousting of the British-born chief executive of Germany’s Deutsche Bank (DBK), John Cryan, boosted the struggling bank’s share price by over 4% to over 11 euros – but the shares were trading above 30 euros just three years ago. With losses and cost-cutting failing to impress shareholders, Cryan has been replaced two years early by Christian Sewing.

In London, the FTSE 100 held firm despite losses in US markets on Friday, holding just below 7,200 points. Rolls-Royce (RR) was top of the leaderboard in early trading after selling off fuel injection technology firm L’Orange for £610 million. The current diplomatic between Russia and the West has damaged the share prices of those Russian companies listed on European exchanges. Today Russian steel firm Evraz (EVR) was sold off sharply.

North America

US futures markets are suggesting that equities will recover some poise on Monday at the open after closing lower on Friday.

This week sees the start of another earnings season, kicked off by JP Morgan (JPM) on Friday. Recent market volatility is likely to have been supportive of US banks’ trading volumes in the first quarter – but the technology sector, which outperformer expectations in the third quarter of 2017, will likely struggle after recent problems.

 

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