Japan's share market rebounded on ECB QE decision

European stocks rose after ECB new stimulus plan announcement

European stock market posted a confident increase in value during the January 19-23 trading week in response to the ECB’s new stimulus plan, which is aimed to weaken the Euro currency and revive Eurozone’s economy. The asset plan will include purchase of investment-grade government bonds from Eurozone countries, bonds issued by European Union institutions and private-sector bonds in amount of 60 billion euros each month from March 2015 until September 2016. Meanwhile, German economic sentiment advanced to 48.4 points comparing to the 34.9 points in December, while Eurozone's economic confidence showed an increase to 45.2 points in January.

The benchmark Eurostoxx 600 Index, in turn, soared 4.8% to 370.37 points from Monday to Friday, while all sectors added in their weekly value. Automobiles and financials leaded market gains, as these industries posted an increase of 7.1% and 6.6%, respectively. Among market movers, Italy's largest cooperative banks have soared after the government approved measures requiring them to revamp their shareholder structure. As a result, Banca Popol Emilia Romagna rose 22% to trade at 6.25 euros per share, while shares of Banco Popolare SC and Banco Popolare di Milano followed with an increase of 19% to 11.45 euros and 0.71 euros per share. At the same time, Afren PLC dropped 33.5% to 19.75 euros per share, as Seplat decided to prolong a deadline for announcing, whether it intends to buy the British company.

Among other market indicators, German DAX added 3.9% to 10,649.58 points, while British FTSE 100 jumped 3.7% to close at the 6,832.83 mark back on Friday.

US stocks strengthened last week despite weak economic data

In course of the previous week, stock market in the United States continued the previous week’s volatile trend. US housing starts rose 4.4% to of 1.089 million units annually in December. Single-family home starts, in turn, rose 7.2% to their highest level since March 2008. Meanwhile, initial claims for US unemployment benefits fell to 307,000, while continuing claims declined 15,000 to 2.44 million in January. Conference Board’s leading economic indicator, in turn, jumped 0.5% in December.

The main S&P 500 Index advanced 1.1% to 2,051.82 points at the end of the trading week on Friday. The majority of biggest industries included in the gauge showed a sharp climb, while utilities and energy gained 4% and 2.9%, respectively. At the same time, financials and basic materials showed a negative trend. Netflix Inc., the world's leading Internet television network, rebounded 35% to $437.46 per share, after reporting record gains in subscribers and profit last quarter. Newfield Exploration Co., an American oil and gas company, followed with a surge of 21.2% to $28.49, as company’s bonds rose 1.5% as well. Meanwhile, stocks of Southwest Airlines, a major US low-cost airline, also posted an increase of 17.6% to trade at $45.78 per share, as the airline predicts fuel costs will be at their lowest in more than five years this quarter, helping to boost profits in a period , when travel demand is typically slowing down. On the other hand, F5 Networks Inc., an American company which specializes in networking technology, decreased 7.5% to trade at $114.85.

Meanwhile, during the previous the Dow Jones rose 0.1% week to hit 17,672.60 points. Alongside, the high-tech NASDAQ climbed 2% to reach the 4,757.87 mark.

Japan’s share market rebounded on ECB QE decision

Japanese stocks managed to extend their gains comparing to the previous week’s harsh drop, helped by the European Central Bank’s announcement of bond-buying stimulus plan that forced investors' risk appetite, pushing bonds and stocks higher. However, The Bank of Japan revised its inflation forecast for the fiscal year starting in April 2015 to 1.0%, down from 1.7% just three months ago. The BoJ is targeting the 2% inflation, but was forced to cut their forecast, since oil prices continue to weaken. Despite that, the regulator will keep raising the money base at an unchanged annual pace of 80 trillion yen.

The benchmark Topix Index climbed as much as 2.2% to 1,403.22 points at the end of the trading week back on Friday. The vast part of industries included in the gauge managed to rebound from previous week’s looses. Precision instruments and banking sectors surged the most by 1.5% week-on-week. From another side of the coin, fishery and services showed a slight decrease of just 0.2%. Among market leaders, Nippon Systemware Co Ltd, a Japanese company which is engaged in information technology solution business, soared 31% to trade at 1,101 yen. Daiichi Chuo Kisen Kaisha, a Japan‘s marine business company, jumped as well by 27.9% to 55 yen per share. On the other hand, Land Co Ltd, a real estate company, declined 12.5% to 21 yen, despite the previous week’s 50% increase. Voltage Inc., a Japanese retailer of high-end contemporary furniture has posted a plunge of 11.5% to 1,081 yen per share of common stock.

Meanwhile, Nikkei 225 benchmark, the official stock market index for Tokyo Stock Exchange, went up 2.9% to close the trading week at 17,511.75 points.

Asian shares traded in positive trend during Jan 19-23 week

Opposite to the previous week’s losses, Asian shares showed a strong positive tendency in course of the week ended January 23, while vast part of news came from Chinese side. China’s GDP surged at the 7.3% annualized pace in the fourth quarter of 2014, outlining the slowest yearly growth in 24 years. Nevertheless, China’s quarterly growth slightly exceeded the 7.2% consensus forecast. Meanwhile, country’s industrial output and retail sales for December also beat economists’ estimates. Industrial output added 7.9% year-on-year, while retail sales climbed 11.9%, compared to 11.7% expectation.

The S&P/ASX200 Index added 3.6% last week to reach 5,501.80 points, while all the industries included the benchmark rose in their weekly value. Basic materials and financials sectors increased 4.8% and 3.9%, correspondingly, while consumer discretionary one added 3.7%. Among main gainers, Sirius Resources NL, an Australian exploration company, jumped 18.3% to trade at A$2.78, after the announcement of a gold discovery in Western Australia. Iluka Resources Ltd, a company which is involved in exploration of mineral sand, soared 15.6% to A$7.09 per share. On the other hand, companies engaged in iron production faced losses, since iron ore prices continue to fall. BC Iron Ltd fell 14.9% to A$0.455, while Atlas Iron Ltd plunged 13.1% to trade at A$0.165 per share of common stock.

Nevertheless, New Zealand’s NZX 50 Index increased slightly by 0.66% to stay at 5,675.24 on Friday’s evening, while Hang Seng advanced 4.6% to close at 24,850.45 points in the end of last working week.

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