Japanese share market grew as economy exits recession

European shares rose last week on positive economic data

Equity market in Europe jumped considerably during the previous trading week, as strong fundamental data influenced stock markets in a bullish way, pushing it to trade in the green zone. German investor confidence rose to a yearlong high in February, as the economic sentiment index climbed to 53.0 points, up from 48.4 in January. Bundesbank reported that the country’s economic output was accelerating, with exporters benefiting from the weaker Euro. Meanwhile, the Euro zone’s composite PMI increased to 53.5 points in February from 52.6 in January.

The benchmark Eurostoxx 600 Index, in turn, rose 1.5% to 382.27 points from Monday to Friday, while all except one sector advanced in their weekly value. Automobiles & parts and consumer goods leaded market gains, as these industries added 3.5% and 2.4%, respectively. Industrials followed with an advance of 2.2%. On the other hand, real estate slumped slightly by 0.2%. Among market movers, Afren PLC, a British oil and gas company, surged 29.7% to trade at 9.44 pence per share, as the company has started discussions with its bondholders as a last attempt to stave off bankruptcy. Pandora A/S, a Danish jewelry manufacturer and retailer, followed with a rise of 25% to 576 kronor per share. However, stocks of major Greek banks continued to slump, as country’s anti-austerity government resumed negotiations with the EU creditors. Eurobank Ergasias SA declined 17.5% to 0.15 euros per share, while Piraeus Bank SA followed with a decrease of 14.4% to trade at 0.616 euros per share.

Among other major stock indicators, German DAX improved 1.1% to 11,049 points last week, while British FTSE 100 grew as much as 0.8% to 6,915.20 points.

US shares strengthened last week despite weak fundamentals

Last week, stock market in the United States expanded notably, even though there were no any major economic data releases. US manufacturing PMI rose to 54.3 points in February, up from a final reading of 53.9 points in the preceding month. The amount of jobless claims slipped 21,000 to 283,000 for the week ended February 14. People became more optimistic about the economic outlook due to plunge in oil prices and payroll gains. Meanwhile, US manufacturing output edged up 0.2% in January, showing a downward revision from an earlier estimate for a 0.3% growth.

The main S&P 500 stock gauge jumped 3.1% to close at 2,110.30 points on Friday of the previous week. Almost all the sectors that comprise the benchmark rose in value, except companies of the telecommunications and utilities industries, which lost from 1% to 1.2% during the last week. Health care and technology companies, in turn, advanced 5.6% and 4.5%, respectively. Among best performing companies, Boston Scientific Corp added 11.7% to trade at $16.47 per share on Friday. Stock of a developer and manufacturer of medical devices advanced after the company announced settlement of a lawsuit filed by Johnson&Johnson for $600 million. The Priceline Group Inc, a US leader in online travel, followed with an increase of 11.3% to trade at $1,216.23. Among biggest losers, Fossil Group Inc. dropped 13.7% to $85.14 as the watch and accessories company’s quarterly results fell short of Wall Street estimates. Garmin Ltd, in turn, lost 11.6% to trade at $49.42, being that the company came up with low Q4 earnings. Meanwhile, the Dow Jones Industrial Average increased 2.3% to 18,140.44 points, while NASDAQ gained 4.8% to close the trading week at the 4,955.96 mark.

Japanese share market grew as economy exits recession

The last week of February was strong for Japanese stock market, as economic data supported the view, that the third-largest economy in the world is escaping recession, driven by export growth. Japanese exports surged in January due to strong demand from Asia and the US. Exports rose by 17% on a yearly basis last month, exceeding the forecasts of 13.5%. Japan’s economy grew at an annualized rate of 2.2%, in the fourth quarter, after contracting in each of the previous two quarters. Meanwhile, the central bank's of Japan announced its decision to keep its already huge stimulus unchanged. The Bank of Japan is going to print money at an yearly pace of 80 trillion yen.

The benchmark Topix Index soared 2.8% on a weekly basis to climb above 1,500 points and hit the 1,500.33 mark on Friday. The vast majority of sectors included in the gauge rose in value. Among biggest gainers, securities and land transport increased 5.1% and 4.4%, respectively. They were followed by iron & steel, which grew as much as 4.1%. Meanwhile, companies that represent oil & coal and mining industries declined last week, as the former slumped slightly 0.6% and latter retreated 0.6%. The fastest revival in share price was registered by Skymark Airlines Inc., which was showing a negative development during last three weeks as the company filed for bankruptcy protection last month. The stock of Japan's third largest budget airline soared 160% to trade at 39 yen after the Orix Corp decided to make a long-awaited investment in the carrier. Imagica Robot Holdings Inc., in turn, climbed 43.8% to 728 yen, as company is going to acquire SDI Media, a global market-leading localization company.

Meanwhile, the second biggest stock index of Japan, the Nikkei 225, rose 1.8% during the previous week to close at 18,332.30 points on Friday.

Asian shares posted no major changes due to the lack of data

Share market in Asia increased during the previous working week; however, an advance was less pronounced than among other equity markets around the world. China new home prices registered their fifth month of a drop on the annual basis in January. They fell by an average of 5.1% from the year-ago period. However, Chinese foreign direct investment grew at its strongest pace in nearly four years in January, surging 29.4% from a year earlier, as investors have largely shunned the troubled manufacturing sector and focused on the more resilient services industry.

The main gauge of the region, S&P/ASX 200, increased slightly 0.8% to 5,881.50 points from Monday to Friday. Eight out of ten sectors rose in value, while the remaining ones retreated. Losses were led by financial and technology industries, as they fell 1.5% and 0.9%, correspondingly. Toll Holdings Ltd, a leading Australian provider of integrated logistics services, soared 46.8% to $8.97 as company accepted the buyout bid of Japan Post, Japan’s public postal company. Horizon Oil Ltd, an Australia-based company engaged in petroleum exploration, followed with an increase of 18.1% to trade at $0.13 per share. On the other hand, Genworth Mortgage Insurance, a financial security company, ended last week with a decrease of 22.9% to $3.33, being that the company cancelled a sales agreement after a review of its riskier loans, a move that will hit the insurer's 2016 earnings.

Stock market in New Zealand rose slightly by just 0.04% to 5,748.94 per share in five trading days. Hang Seng, in turn, added 0.6% to close at 24,832.08 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