American equities surged as health care sector climbed more than 5%

European stock markets surged during October 20-24 week

Equity market in Europe jumped considerably during the previous trading week, as positive fundamental data influenced stock markets in a bullish way, pushing it to trade in the green zone. Eurozone’s manufacturing PMI increased last month, even despite negative expectations; however, French manufacturing and services sectors slipped further. Moreover, unemployment rate in Spain dropped more than predicted, namely to 23.7% in the second quarter of this year. On the British side, the country’s GDP rose in line with forecasts by 0.7% in July-September quarter.

The benchmark Eurostoxx 600 Index, in turn, climbed 3.2% to 327.17 points from Monday to Friday, while all but one sector advanced in their weekly value. Therefore, the annual gain of the indicator was returned back into the green territory. Banking and telecommunications leaded market gains, as both these industries added 4.8% last week. Health care followed with a rise of 4.4%. On the other hand, basic materials slumped slightly by 0.1%. Among market movers, Nutreco NV, a Dutch producer of animal nutrition, surged 41.6% to trade at 39.75 euro per share at the end of the week on Friday. Banco Comercial Portugues followed with a rise of 17.5% euro to 0.092 euro per share. At the same time, Portugal Telecom SGPS SA declined 13.2% to 1.07 euro per share, thus limiting advance of the sector it represents.

Among other major stock indicators, German DAX improved 3.1% to 8,987.80 points last week, while British FTSE 100 grew as much as 1.9% to 6,388.73 points.

American equities surged as health care sector climbed more than 5%

Last week, equity market in the United States expanded notably, even though fundamental data from the country used to be rather mixed. Existing home sales in the world’s biggest economy grew in September and consumer price index was released better than estimated. At the same time, unemployment claims rose for the week ended October 17, but remained below 300,000 for the sixth consecutive week, while flash manufacturing PMI decreased more than forecasted to 56.2 points.

The main S&P 500 stock gauge jumped 3.2% to close at 1,964.58 points on Friday of the previous week, but still remained below the 2,000 threshold it reached back in the middle of September. However, the index managed to erase all losses that occurred since October 8. All the sectors that comprise the benchmark rose in value, only except companies of the telecommunications industry, which lost 0.1% last week. Health care and technology companies, in turn, advanced 5.3% and 4%, respectively. Among best performing companies, Edwards Lifesciences Corp added 18% to trade at $116.76 per share on Friday, as a producer of medical devices showed better than expected profit for the Q3. Moreover, the company raised its full year forecast for 2014. Among biggest losers, IBM Corp dropped 11% to $162.08, as the technology giant’s revenue is falling for tenth quarter in a row. Amazon.com Inc lost 5.5% to $287.06 and Coca-Cola Co slipped to $41.03 during the October 20-24 week.

Meanwhile, the Dow Jones Industrial Average increased 2.5% to 16,805.41 points, while NASDAQ gained 3.9% to close the trading week at the 4,483.71 mark.

Japanese share market grew as country’s statistics improved

The stock market in Japan increased during the previous working week; however, an advance was less pronounced than among other equity markets around the world. The main gauges managed to decrease monthly losses to marginal 1-3%. Local statistical data also fuelled bullish sentiment on the stock market. All industries activity fell less than estimated, while manufacturing PMI improved to 52.8 points. On the other hand, trade balance dropped further, as deficit surpassed the one trillion yen mark in September.

The benchmark Topix Index climbed 1.5% on a weekly basis and hit the 1,242.32 mark on Friday. The vast majority of sectors included in the gauge rose in value. Among biggest gainers, maritime transport and metal products increased 4.1% and 3.5%, respectively. They were followed by airlines, which grew as much as 3.3%. Meanwhile, companies that represent manufacturing and mining industry mostly declined last week, as oil & coal slumped 1.5% and paper industry plunged 0.3%. The fastest increase in share price was registered by l’rom Holdings Co Ltd, which added 25.3% to 1,405 yen. The health care supply chain almost doubled its market value since the middle of September. Obayashi Road Corp climbed 21.4% to 732 yen, while Foster Electric Co Ltd surged 20.6% to 1,709. The latter one is one of Apple Inc. suppliers, and it benefited from positive earnings of the American company in Q3.

The second biggest stock index of Japan, the Nikkei 225, rose 1.2% last week to close at 15,291.64 points at market closing time on Friday.

EXPLANATIONS

Indexes

• Standard & Poor's 500 Index (S&P 500) or (SPX) - U.S. stock market index consisting of the 500 large-cap shares widely traded on the New York Stock Exchange and the NASDAQ.

• Dow Jones Industrial Average Index (INDU) - U.S. stock market index consisting of the 30 large publicly owned U.S. companies , primarily industrials

• NASDAQ Composite Index - U.S. stock market index representing all the stocks that are traded on the Nasdaq stock market, mostly technology and Internet-related

• New Zealand Exchange 50 Gross Index (NZX 50) - stock market index consisting of the top 50 companies listed on the New Zealand Stock exchange

• S&P/ASX 200 - a market-capitalization weighted stock market index of stocks listed on the Australian Securities Exchange from Standard and Poor’s

• Hang Seng Index (HI) - Hong Kong’s stock market index consisting of 48 largest companies listed on the Hong Kong Exchange

• Japan’s Nikkei Stock Average (Nikkei 225 Index) or (NKY) - Japanese stock market index consisting of the 225 largest companies listed on Tokyo Stock Exchange

• FTSE 100 Index (UKX) - U.K. stock market index consisting of the 100 most capitalized U.K. companies trading on the London Stock Exchange

• DAX Index (DAX) - German stock market index consisting of the 30 largest and most liquid German companies trading on the Frankfurt Stock Exchange

• Eurostoxx 600 - stock market index, derived from the Stoxx Europe Total Market Index, consisting of 600 large, mid– and small-sized companies from 18 European countries

Chart

• Correlation - statistical measure of the linear relationship between two random variables. It is defined as the covariance divided by the standard deviation of two variables.

• Historical price changes - chart reflecting the historical price changes of particular region’s stock indices

Indicators

• Industry performance - weekly performance of industries within the particular stock market index

• Top performers - companies within a particular stock market index showing the best or worst weekly performance

• Performance - relative historical change of stock market index value