European shares dropped to erase six-month gains

Shares of major European companies declined significantly, pushing markets down during the previous trading week due to tumbling oil prices. Despite some positive data on German’s industrial production, which soared 0.8% in October, German’s exports decreased by 0.5% the same month, while imports fell at a sharper pace of 3.1%. This brought the seasonally adjusted trade surplus to 20.6 billion euros, above economists' expectations of 19.0 billion euros. Meanwhile, the second round of the ECB’s TLTRO came in at EUR 129.84 billion, broadly in line with predictions.

The Eurostoxx 600 gauge, which represents the largest companies from the whole region, lost 5.2% to close at 330.54 points on Friday’s evening. Unlike one week before, all the sectors included in the index declined in value, while the basic materials and energy industries slipped the most by 7.6% and 7.5%, respectively. Banking sector followed with a decrease of 6.4%. Among biggest losers, Piraeus Bank SA and the National Bank of Greece lost 29% to 0.93 euros and 27.3% to 1.46 euros. A sharp drop in stock prices of Greek banks occurred after the government's decision to bring forward a parliamentary vote for country’s president. Sika AG, a Swiss chemical and oil company, followed with a plunge of 25.1% to 2,418 euros per share, following the OPEC’s forecast that demand for oil in 2015 will be at the weakest level in 12 years. Among best-performing companies, Petroleum-Geo Services added 8.5% to 4.43 euros.

Meanwhile, British FTSE 100 Index dropped 5.6% to 6,300.63 points last week, while German DAX dipped 4.2% to close at the 9,589.50 mark on Friday’s evening.

American stocks traded lower due to fall in oil prices

In course of the previous working week, all major US indexes fell slightly. They were largely influenced by broad global weakness of different economic indicators and tumbling oil prices. Despite that, US economic reports continue bringing positive news. Retail sales in the world’s biggest economy jumped 0.7% in November on a monthly basis, the biggest rise in eight months. Year-on-year they are now 5.1% higher than in November 2013. Sales were driven by strong jobs’ growth and lower gasoline prices.

The largest S&P 500 Index, which colligates data for 500 biggest companies in the US, managed to close down just above the 2,000 threshold, as it plunged 2.8% to 2,002.33 points by the end of the trading week. Similar to Europe, all the industries included in the gauge faced losses. The worst performance was showed by telecommunications, basic materials, and energy, as they lost value in the range from 4% to 6%. Utilities sector performed better than others; however, it has also decreased 0.6% from Monday to Friday. Nabors Industries Ltd plunged 18% last week to trade at $10.00 per share on Friday, hitting the 52-week low, as OPEC lowered its oil demand forecast for 2015. Oil prices tumbled 9% last week, as Brent dropped below $63 per barrel. However, Staples Inc, an American office supply chain store, was among the leaders this week, gaining 14.5% and trading at $16.47 per share on Friday, as Starboard Value disclosed a 5.1% stake in Staples.

The Dow Jones Industrial Average decreased 3.2% to 17,280.83 points, while NASDAQ went down 1.8% to close the previous working week at 4,653.59 points.

Japan’s share market plunged amid weak GDP data

Japanese shares performed in the most successful way among major financial markets during December 8—12 trading week. Therefore, weekly gains were decreased to minimal, even though Japan’s economy contracted more than estimated in the third quarter, shrinking 1.9% on the annual basis. Capital spending fell and private consumption was weak too. Quarter-on-quarter GDP fell 0.5% in July-September. After two quarters of sharply reduced economic activity, Japan’s 14 December election looked as a referendum on Prime Minister Shinzo Abe’s policies, which he successfully passed, receiving as many as 2/3 of all votes.

The benchmark Topix Index decreased 3.3% to close at 1,399.65 in the end of last week. Almost all the industries included in the gauge went down in five trading days. The worst performance was showed by securities, financing business and rubber products, as they lost value in the range from 4% to 7%. Air transport and energy performed better than others, by showing a minor increase of 0.1-0.3% for both. Mec Co Ltd, a Japan-based company engaged in the production and sales of chemicals, plunged 16.4% to 1,026 yen per share. I’Rom Holdings Co Ltd fell 14% to trade at 1,026 yen, despite previous week’s gains. On the other hand, Helious Techno Holdings Co Ltd, a manufacturer of different household products, surged 49% to 529 yen per share, while Skymark Airlines Inc. followed with an increase of 32% to 297 yen, as the third-biggest carrier in Japan is considering an issue of shares to raise funds.

Concerning another major market indicator, the Nikkei 225 posted a 3.1% loss to close at 17,371.58 points for the week ended December 12.

Asian shares fell to nine-month low during last week

Asia-Pacific equity markets experienced a considerable slump in value last week, as all major stock indexes of the region reached their lowest points in more than nine months, since oil prices plunged to five-year lows, spurring concerns that the global economic outlook is weakening. However, last week China posted very encouraging trade data for November, with smaller imports resulting in a record monthly trade surplus. Despite that, consumer prices rose in the same month at an annual rate of 1.4%, their slowest pace in five years, while producer prices fell 2.7%. Meanwhile, Australian employers added the highest number of new jobs in more than 2 years, as the RBA’s plan to stimulate growth with record-low interest rates seems working. The number of people employed increased by 42,700 in November.

The benchmark S&P/ASX200 Index tumbled 2.8% to 5,219.60 points last week, as almost all the industries included in the gauge posted a negative movement. Energy and basic materials lost the most of 5.8% and 4.4%, respectively. Among market movers, Qantas Airways Ltd, the flagship air carrier of Australia, climbed 14% to A$2.40 per share, as dropping kerosene prices are likely to push up earnings of the airline. Opposite to beneficiaries from low oil prices, Horizon Oil Ltd and Sundance Energy Australia Ltd plummeted as much as 27% and 22.7% last week to trade at A$0.135 and A$0.425, respectively.

Meanwhile, Hang Seng Index dropped 3.3% to 23,249.20 points last week, while NZX 50 gauge of New Zealand slipped 0.3% to close at 5,514.954 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