Global Market Report - July 3, 2018

China's stock market stabilised after yesterday's selloff, while European exchanges rose as Germany's political outlook improved

Morningstar 10/07/2561


Markets in the region recovered some equilibrium after yesterday’s heavy selloff in China and Japan. But it was still a turbulent trading session, especially for the Shanghai Composite Index, which just managed to claw into positive territory by the end of the day. Since the benchmark entered bear territory towards the end of June, it has been the focus of investor concerns in Asia-Pacific. From  a recent peak at 3,558 points at the end of the January, the index is now just above 2,700 points.

Currency factors are playing a strong role in the region’s stock market dynamics; Chinese investors were given a boost by the central bank’s willingness to prop up the yuan following a slide in the currency against the dollar.

Hong Kong stocks declined after the market opened after Monday’s public holiday as investors caught up with yesterday’s slide.

Japan’s Nikkei and Topix indices declined slightly on Tuesday.


On the FTSE 100, shares in mining and trading firm Glencore (GLEN) fell as much as 12% in morning trading on news that the US Department of Justice subpoenaed documents relating to the company’s activities in DRC, Nigeria and Venezuela.

Nevertheless, the index managed to remain ahead of yesterday’s close despite a rise in the pound after much better-than-expected construction data.

Eurozone exchanges were higher than the FTSE 100 this morning, though, as news of political progress in Germany boosted the euro.

North America

Domestic economics could distract investors this week from the ongoing trade wrangles. The Federal Reserve’s minutes from the June 13 meeting, where the central bank raised interest rates by a quarter point, will be released on Thursday. Service sector data will also be published on the same day. Friday sees one of the highlights of the economics calendar: the US economy is forecast to have added 195,000 jobs in June, compared with 223,000 jobs in May. Nevertheless, the non-farm payrolls number often surprises to the upside and helps support equity markets.

While the corporate calendar is light this week, investors will be looking for earnings season – which kicks off on July 13 – to provide the stock market with some direction amid trade concerns.



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