Global Market Report - January 16

World markets were mixed ahead of more US bank earnings, while the FTSE 100 made its first reaction to Theresa May's rejected Brexit deal

Morningstar 18/01/2562

Global Market Report

Asia

Markets in Asia-Pacific put in a mixed performance on Wednesday despite a positive close on Wall Street overnight. China’s Shanghai Composite Index closed virtually unchanged on the day at 2,570 points, while Hong Kong’s Hang Seng eked out a meagre 71 point gain to 26,902.

Japanese inflation data is due at the market open on Thursday. The rise in the CPI is expected to drop back from 0.8% in November to 0.3% in December. Japan’s Nikkei dropped around 0.5% on Tuesday’s close – the index has held above 20,000 points so far this year amid a global recovery in share prices.

Europe

The political drama surrounding last night’s vote did not trigger any equivalent excitement in UK stock markets. The pound rallied against the dollar and euro after news that Theresa May’s deal had been rejected as traders anticipated that the government will win the looming vote of no confidence triggered by Jeremy Corbyn.

The FTSE 100 dropped back as the currency gained ground, but housebuilders and banks were higher. Pearson (PSON) was the biggest faller on the index after the educational specialist

UK inflation fell as expected to 2.1% in December, from 2.3% on November, as measured by the Consumer Price Index – the rise in the Retail Price Index dropped to 2.7% from 3.2% in the previous month. A big drop in petrol prices, spurred by a steep fall in crude oil, was behind the move as well as air fares not rising as quickly as they did in the same month of last year. According to the Office for National Statistics, this fall in inflation was tempered by rises in hotel prices and mobile phone charges.

North America

JP Morgan (JPM) missed estimates yesterday, following on from Citigroup (C) on Monday, and next up are Goldman Sachs (GS), Bank of America (BAC) and BlackRock (BLK) today.

Netflix (NFLX) shares rose last night after the video streaming firm announced a price rise. The company’s earnings are due after the closing bell on Thursday.

In economics, advance retail sales data is due on Wednesday. This is expected to show a drop in growth from 0.2% in November to 0.1% in December on a month-by-month basis. Canadian inflation numbers are due on Friday. After the market opens on Friday, the University of Michigan sentiment index for January is released.

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