Global Market Report - October 31

World equity markets rose across the board on the last trading day of a volatile month

Morningstar 05/11/2561

Global Market Report

Asia

After a bruising October, a broad-based global equity rally helped Asia markets have a positive last day of the month at least. The middle of the month was the most uncertain for Chinese markets, with a 5% fall on one day, but the Shanghai Composite Index is still off only 100 points from the beginning of the month to the end. Year to date the picture is more alarming, with a slide of 1,000 points since the January peak. The index fell into bear market territory earlier in the summer and has never managed to clamber out, as the much anticipated correction in global markets materialised in east Asia.

China’s PMI manufacturing index missed forecasts and the sector only just expanded in October.

The Bank of Japan kept interest rates on hold but lowered its inflation target to below 1%. The Nikkei 225 was one of the best performing markets in Asia after the US dollar made a push above 113 yen after an uneventful month for the currency pair.

Europe

Stock markets in Europe made strong gains across the board on Wednesday, with France’s CAC 40 the biggest gainer in percentage terms, with energy companies and mining firms in the ascendant.

The FTSE 100 is off around 300-400 points since the start of the month, but made a modest attempt to recover some of those losses today with a gain of over 100 points to 7,141. Global market pressures have kept the index close to the 7,000 points level despite ongoing weakness in sterling, which usually helps support the dollar earners listed in London.

North America

Facebook (FB) shares rose in after-market trading despite mixed results. The company missed Wall Street forecasts for revenues and monthly user growth in the third quarter but its shares did not go into freefall as they did after second quarter earnings were released. Net profit of $5.1 billion or earnings of $1.76 per share beat expectations.

General Motors (GM) reports earnings today, as does Kellogg (K).

In Canada, GDP data on Wednesday is expected to show that the economy grew by 0.1% month on month in August and is 2.4% larger than the year before. Non-farm payrolls numbers are expected to show a big jump in jobs created in October. Just under 200,000 jobs are forecast to have been added this month, compared with 134,000 in September.

 

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