Japan's share market strengthened despite weak exports

European stocks advanced to show biggest annual gain

European stocks advanced during the last week, showing the biggest jump of the year, as energy shares rebounded, after the Federal Reserve said it will probably hold rates near zero at least through the first quarter of 2015, while the Swiss National Bank introduced its first negative deposit rate since 1970s. Moreover, investors were satisfied with the second monthly rise in Germany's IFO‘s business climate index, which rose to 105.5 points in December from 104.7 a month ago due to improvements in manufacturing. Inflation in the Euro zone remained low at 0.3%, while bloc’s manufacturing PMI, in turn, increased slightly to 50.8 points in December. A growing number of economists are concerned that the Euro area could slip into deflation the next year due to falling oil prices, which add deflationary pressures in the region.

The Eurostoxx 600 gauge, which represents largest companies from the region, gained 5.2% to close at 340.30 points on Friday’s evening. Energy and basic materials industries were the most positive market movers, as they added 11% and 9%, respectively. Among market movers, companies that operate in gas and oil industry advanced the most as oil prices stabilized. Afren Plc soared 38% to 47.57 pence, while Subsea 7 SA increased 18.4% to trade at 81.15 euros. At the same time, Drax Group Plc, a British electrical power generation company, dropped 13.2% to 441 pence, after Britain announced it’s intense to change subsidy schemes for biomass plants.

Meanwhile, the German DAX grew 4.8% to 9,789.50 points, while the British FTSE 100 Index surged 5.8% to close at the 6,545.27 mark back on Friday.

American stocks advanced due to rebound of energy shares

American equity market gained strong value during December 15-19 time period, compared to the previous trading week, as all major indexes inched higher from Monday to Friday and erased around half of December losses. Gains were influenced by rebound of energy shares and the Federal Reserve’s announcement that it would be patient on timing of interest-rate increases. Meanwhile, initial claims for US unemployment benefits dropped 6,000 to a seasonally adjusted 289,000 for the week ended December 13. Inflation in the United States fell 0.3% in November from October, posting the largest decline since 2008. The decrease was largely led by a 6.6% drop in gasoline prices. Core CPI, however, increased 0.1%. Industrial production jumped 1.3% in November.

The benchmark S&P 500 Index advanced 4.1% to hit a 2,070.65 mark on Friday’s evening. All biggest industries included in the gauge showed a sharp climb, while gains were led by energy and basic materials, which went up 10.5% and 5.6%, respectively. Among largest market movers that are companies from oil and natural gas industries, Nabors Industries Ltd surged 36% to $13.63, while Denbury Resources Inc. followed with an increase of 30% to $8.32, since as oil prices stood stable last week. On the other hand, Mattel Inc. dropped 5.01% to $29.19, as BMO Capital, a North American financial services provider, expresses concerns that the toy company is losing its market share to competitors.

Meanwhile, the Dow Jones Industrial Average surged in 3.6% during the previous week to 17,804.80 points, while high-tech index NASDAQ climbed by 3.4% to reach the 4,765.38 mark.

Japan’s share market strengthened despite weak exports

Japanese shares continued to gain value following the trend of the previous week. However, news raise fresh concerns over Japan’s economy only some days after Shinzo Abe, the Prime Minister, was re-elected on a promise to boost economic growth. Japan’s exports fell 1.7% in November, largely influenced by China’s slowdown. While the weaker Japanese yen was expected to stimulate Japan’s exports, the flip side is that prices of imported goods advanced and these costs affected small businesses and consumers. Meanwhile, the BoJ keeps unprecedented stimulus due to a harsh drop in oil prices. The decrease in oil prices is likely to influence consumer prices even more in the first half of the upcoming financial year starting in April. Nevertheless, the economy is anticipated to continue a moderate recovery, since the effects of April sales-tax increase dissipate.

The Topix Index gained 2.2% and closed at 1,409.61 points. All the sectors included in the gauge rose in value. Mining and paper sectors were the most positive market movers, as they added 6.1% and 5.5%, respectively. Ishizuka Glass Co Ltd, engaged in the manufacture and sale of glass-made products, advanced 42.5% to 228 yen, as the company is acquiring Narumi Corporation, a Japan-based chinaware and industrial devices manufacturer. Kobe Bussan Co Ltd, a Japanese food retailer, followed with a climb of 32% to 9,730 yen. Meanwhile, Sanix Inc, a local provider of sanitation services, lost as much as 17.3% to trade at 425 yen, while Marvelous Inc., a videogame publishing company, dropped almost 17% to 1,759 yen.

Concerning another major market indicator, the Nikkei 225, it posted a 3% increase to close at 17,621.40 points for the week ended December 19.

Asian shares advanced after previous week’s decline

Asia-Pacific equity markets rebounded during December 15-19 time period, compared to the previous trading week. Among important fundamental statistics from the region, China’s factory activity fell to a seven-month low in December. The flash HSBC China Manufacturing PMI contracted to 49.5 points, slightly below the November’s reading of 50, which separates growth from contraction. Moreover, sub-indices for output, employment, new orders and finished goods also showed a strong decline. Nevertheless, the Chinese foreign direct investment soared 0.7% in November, compared with a drop of 1.2% a month earlier, while Chinese house price index fell further 3.7% in the same month.

The most important S&P/ASX200 Index advanced 2.9% to 5,338.60 points last week. Almost all the industries managed to increase in their weekly value. Energy and basic materials sectors climbed 6.6% and 3.8%, accordingly. On the other hand, consumer discretionary slipped 0.3%. Lynas Corp Ltd, an Australian mining company, advanced 33.3% to be the major market mover during the period and trade at A$0.06 per share on Friday. BC Iron Ltd followed with a jump of 32.8% to A$0.485. Meanwhile, Medusa Mining Ltd, a company, which is primarily engaged in mineral exploration dropped, the most by 16.6% to A$0.625. Meanwhile, Flight Centre Travel Group L, an Australian travel agency, had the second-sharpest decline, as it plummeted 9.5% to trade at A$33.47.

In addition to all mentioned, the second most valuable stock indicator of the region, the Hang Seng, posted a 0.4% gain to close at 23,408.57 points, while NZX 50 Index advanced 0.5% to close at 5,495.81 points 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