European equities fell sharply on Thursday as investors reacted to the latest policy actions from the European Central Bank (ECB). There was a 0.1% reduction in the official deposit rate to -0.3% and a six month extension to the QE programme. This should be supportive but investors wanted more and hence the sharp equity market declines. The Stoxx Europe 600 Index fell 3.1%, with Germany faring worse down 3.6% whilst in France, stocks such as Danone declined 5%. This morning has seen a mild recovery with AXA up 3.7% on positive results, the insurer has indicated dividends will be raised and solvency is strong. In the UK, Berkeley Group is one of the biggest risers with the house builder up 6%. Demand remains strong and with cash generation high, dividends can be materially boosted.
US equities also declined, although positive retail sales data boosted stocks such as Wal-Mart up 1.18%, Target Corp up 1.75% and Abercrombie & Fitch up just over 1%. Some of the major fallers included Amgen down 3.65%, Oracle down 2.3%, Goldman Sachs fell nearly 2.7% and Alcoa lost 3.85%. The Federal Reserve also reiterated its favoured stance of raising interest rates as soon as possible. Oil actually rallied ahead of a key OPEC meeting today, the move saw Transocean up 1.5% and Nabors up 1.3%. The largest US supermarket chain, Kroger, was up nearly 5% as the company beat profit expectations boosted by new store openings.
In Asia the MSCI Asia Pacific Index fell 1.1% with consumer and healthcare stocks leading the falls. Japan was weak as the Yen strengthened against the US $ with the shipping sector in focus as Nomura downgraded the outlook. Mitsui OSK Lines dropped 3.7%, Kawasaki Kisen fell nearly 3% and Hanjin Shipping declined 1.6%. Chinese stocks which had been positive earlier in the week fell nearly 2% with property developers such as Poly Real Estate down 3% and Gemdale Corp down 4.5%. In Australia, Financials were notably weak with Magellan Financial down 8.8% and Henderson Group lost 3.9%.
Morning Spread 8th March 2017 European shares traded flat this morning, the modest moves masking significant results driven games by several companies on a bust day for European earnings.
Morning Spread 2nd November 2016 Asian stocks followed global equities lower despite gauges of manufacturing in China topping estimates and the Bank of Japan maintained its record stimulus program.
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