Global Market Round Up: 11/2/2013
Last week ended badly for the FTSE, after early signs that the rallying start to 2013 would continue. Markets around the world reacted to the political unrest in Spain and Italy, retreating after earlier advances. The situation became even more precarious over the weekend as it became clearer that Cyprus would almost certainly need a bailout of their own due to its over-dependence on Greece, who have serious issues of their own.
Fortunately for the Eurozone Cyprus is only expected to need approximately £16 billion, a fraction of their neighbours total debt which runs into the hundreds of billions. Regardless of all the negativity surrounding the region, members of the FTSE began the week on the right foot, rising by 0.3%.
Barclay’s and Standard Chartered, two banks who have been embroiled in scandals lately, saw healthy gains of 0.8% and 1.2% respectively, the latter being predominantly driven by rumours of cost-cutting policies being announced tomorrow.
The biggest gain of the day were found in the commodities sector, with steel producers Evraz advancing 3.5%. Eurasian Natural and Xstrata also made solid progress, rising by 2.5% and 0.8% respectively. Meanwhile, Deutsche Bank drove Reckitt Benckiser stocks up by 0.5% after recommending their stock as a “Buy” and heaping praise on the company and their industry as a whole.
The Stoxx Europe 600 Index declined by 0.6%, which some analysts had predicted ahead of trading. With so much uncertainty in the region and a decline in trade volume due to holidays in Asia, many investors heeded their warning and moved onto low risk investments as they awaited the outcome of the Eurogroup meeting.
On the other side of the Atlantic US Stocks declined, snapping a six week rally. The S&P 500 declined by 0.1% after its meteoric rise of 6.4% in the opening weeks of 2013. Dot-com’s enjoyed mixed fortunes throughout the day with Google sliding 0.4% due to their Chairman Eric Schmidt opting to sell more than 3 million shares, while AOL advanced 7.4% as they were given widespread “Buy” ratings from Analysts around the world. Once again the Asian holiday played a leading role as trade volume was down by more than a quarter.
Early reports out of Asia for Tuesday’s session appeared positive, with the Nikkei 225 rising by 2.25% to 11,434.41 by 12:48pm in Tokyo.