Japanese equities plunged significantly on strong Yen

European shares prolonged tendency of decrease

Shares of European companies dropped during the previous trading week, continuing the tendency which has been developing in the beginning of February. Meanwhile, the Euro zone economic growth met expectations in the fourth quarter of the preceding year, expanding at a 1.5% rate. Concerning the economic data, harsh plunge was noted in Germany’s industrial production which equals –1.2% and exports which reached –1.6%. These data has raised fears that the region’s growth could slow down.

The main European Index lost 0.6% to 312.41 points in course of five trading days of the last week, resuming monthly and quarterly looses. Sectors, in their gains and looses divided equally, with utilities and technology slipping as much as 2.7% and 1.6%, respectively. Among biggest losers, Saipem SPA, an Italian oil and gas industry contractor, dropped to 17-year low diminishing by 42% to 0.301 euros, after the price of rights to participate in a capital raising indicated a lower valuation. On the other hand, Meda AB-A SHA, a Swedish pharmaceutical company, skyrocketed 59% to 73.46 euro per share, since company due to be acquired by American drug maker—Mylan, for $7.2 billion in cash and stock.

Among other important European market indicators, German DAX went down 2.7% to 8,942.50 points in five trading days, while British FTSE 100 was the only gainer, rising slightly 0.3% to reach 5,707.60 mark on Friday.

Nasdaq hit 16 month’s low

American shares showed a marginal increase, mainly due to the Janet Yellen speech during the semiannual monetary meeting. The US Federal Reserve Chair announced that Fed was surprised by oil price movements and greenback’s strength. Also, Yellen noted, that the possibility of negative interest rate usage is cloudy. Meanwhile, US January retail sales posted a 0.2% increase while December’s sales were revised up to 0.2% from the previously reported -0.1%. Core retail sales, in turn, advanced 0.6% in January, up from -0.3% in December.

The main S&P 500 Index gained 0.6% to 1,864.78 points, as well as the biggest part of the industries added in value during the previous trading week. The loses were led by utilities and energy, which slowed 2.1% and 0.8%, respectively. On the other hand, consumer discretionary managed to rise by 1.3% last week. Among the best performing companies, Akamai Technologies Inc, a content delivery network as well as CDN and cloud services provider soared 17% to trade at $50.76, following a fantastic fourth-quarter report. However, the stock is still trading at a large discount compared to historical valuations. Concerning the biggest losers, Chesapeake Energy Corp, the second-largest natural gas producer in the United States, diminished 48% to trade at $1.59, after the company’s inability to pay $4 billion credit due to crisis in the gas industry.

Meanwhile, the Dow Jones Industrial Average lost 0.33% to 15,973.84 points, while the NASDAQ index followed with a biggest rise of 1.25% to reach the 4,337.51 mark.

Japanese equities plunged significantly on strong Yen

Stock market in the world’s third largest economy continued to drop dramatically. Overall, Japanese shares headed the decline among other stock markets since the yen strengthened against the US dollar. Meanwhile, upcoming Japanese GDP figures are forecasted to show the economy contracted during the last quarter. Taking into account recent strength of the Japanese yen and weak domestic demand, the possibility of further policy easing becomes more realistic.

The major Topix gauge, however, plunged 13.3% in total value during the week ended February 12, reaching the 1,196.28 mark. Maritime transport and glass & ceramic products sectors lost 11.9% and 11.8%, leading the decrease among all sectors included in the indicator. Cookpad Inc, an Internet corporation specializing in the recipe category rose 20.6% to 1,784 yen, adding the most among largest local companies. Broadleaf Co Ltd and Skylark Co Ltd followed with a climb of 8% and 7% to 1,187 yen and 1,454 yen, respectively. However, losses were led by Klab Inc, a Japanese company mainly engaged in the social and system integration business. It dropped 36% to 464 yen per share from Monday to Friday of the previous week.

In addition, the second most valuable stock indicator of Japan, the Nikkei 225, posted a steep 12% decrease to close at 14,952 points on the last working day of the week.

Asian shares decreased slightly

Share market in the Asia-Pacific region traded in a purely red environment in course of the previous working week. Chinese total foreign exchange reserves plunged to $3.23 trillion, showing the lowest number in three years. Meanwhile, the country has been forced to sell down reserves in order to slow the yuan’s depreciation.

The benchmark S&P/ASX200 stock market indicator declined 1.3% to hit a 4,765.30 mark on Friday’s evening, as only one industry included in the gauge performed to the upside during five trading days. Basic materials sector added 0.3% while technology sector, was the biggest loser of the region. Market rise, in turn, was led by Evolution Mining Ltd, a mining company, which jumped 22% to trade at $1.975, due to recent jump in gold prices, thus managing to recover from the long-term decline, started in January of this year. Independence Group NL followed with a climb of 18.11% to $2.87. Nevertheless, some industries showed a strong downward movement, as technology sector plunged 7.6% and financials lost 4.3%. A representative of the latter one, OzForex Group Ltd, dropped 39.6% last week to reach a mark of $1.865 per share. The plunge in a stock price, even managed to terminate talks of company’s acquisition by Western Union.

At the same time, Chinese stocks moved along with its Australian counterpart, as they dipped 1.5% and 1.3% with Hang Seng Index reaching 18,319.58 points on Friday. NZX 50 Index, however, lost 0.3% to close at 5,933.96 points in the end of last trading 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

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