European shares traded negative despite on ECB decision

Shares of major European companies declined significantly, pushing markets down during the previous trading week as the European Central Bank’s policy move fell short of expectations. The European Central Bank lowered its deposit rate to -0.3% from -0.2%, charging banks more for depositing cash with the central bank. The ECB President Draghi said the central bank would extend its quantitative easing programme at least six months through March 2017.

The Eurostoxx 600 gauge, which represents the largest companies from the whole region, lost 3.8% to close at 370.59 points on Friday’s evening. Despite the precious week's gains, all the sectors included in the index declined in value, while the chemicals and basic materials industries slipped the most by 6.9% and 7.1%, respectively. Among biggest losers, the National Bank of Greece lost 47% to 0.644 euros, following the disappointing news out of the ECB, as the euro soared. Delta Lloyd NV, a Dutch insurer, followed with a plunge of 28.8% to 5.17 pence per share, after Credit Suisse downgraded the stock to "neutral" and Morgan Stanley cut its target price. Among best-performing companies, Abengoa SA-B Shares, a Spain-based company engaged in the provision of technological solutions soared 38.3% to 0.404 euros.

Meanwhile, British FTSE 100 Index dropped 1.8% to 6,238.29 points last week, while German DAX dipped 5.5% to close at the 10,753 mark on Friday’s evening.


US stock market remained broadly unchanged last week

In course of the previous working week, major US mostly rallied, after a strong US monthly payrolls report. On Friday, the US nonfarm payrolls grew 211,000 in November, and revisions added a total of 35,000 jobs to the September and October tallies. With the revision, October’s payrolls grew 298,000. Meanwhile, the unemployment rate was flat at 5.0%. Nevertheless, the Institute for Supply Management’s gauge of US manufacturing activity fell to 48.6 in November from 50.1 in October, contracting for the first time since 2012 and the weakest reading since June 2009. This purchasing managers’ index has fallen steadily from a reading of 53.5 in June.

The largest S&P 500 Index, which colligates data for 500 biggest companies in the US, went up slightly 0.54% to 2,091.69 points by the end of the trading week. Most of all the industries included in the gauge gained in value. The worst performance was showed by industrials, utilities and energy, as they lost value in the range from 0.1% to 4%. Kinder Morgan Inc., an energy infrastructure and energy company, plunged 29.5% last week to trade at $16.82 per share on Friday, due to the looses in the energy sector. However, Newmont Mining Corp, one of the world's largest gold producers, was among the leaders this week, gaining 17.6% and trading at $20.46 per share on Friday.

The Dow Jones Industrial Average rose 0.72% to 17,847.63, while NASDAQ added 0.66% to close the previous working week at 5,142.27 points.


Asia-Pacific share market erases previous week’s gains

Asia-Pacific equity markets were mixed in during the previous week period, reflecting broadly weak US, Chinese and Euro zone economic data. China’s official government purchasing managers’ index for manufacturing fell to 49.6 in November, while the Caixin/Markit manufacturing PMI, which includes smaller firms, shrank more deeply, at 48.6. The readings were the lowest in three years, reflecting weak demand for China’s products at home and abroad.

The benchmark S&P/ASX200 Index lost 0.2% to 5,151.60 points last week, as almost all the industries included in the gauge posted a negative movement. Energy and health care lost the most of 6.2% and 2.8%, respectively. Among market movers, Slater&Gordon Ltd, a multinational law firm headquartered in Australia, soared 63% to $1.13 per share, despite the previous week’s major looses. The strong increase was noted after the company announced that proposed amendments to UK legislation around damages for personal injury claims which may impact its outlook. Opposite to beneficiaries, Spotless Group Holdings Ltd, a provider of laundry and linen services in Australia and New Zealand plummeted as much as 43.3% to trade at $1.23 as the group released a terrible trading update to the market .

Meanwhile, Hang Seng Index increased 1.09% to 22,235.89 points last week, while NZX 50 gauge of New Zealand slipped 0.09% to close at 6,094.82 points back 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

This overview can be used only for informational purposes. Dukascopy SA is not responsible for any losses arising from any investment based on any recommendation, forecast or other information herein contained.

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