Morning Spread

Morning Spread

Monday 24th November 2014
IndexLevelChg (%)
UK Market6748.22-0.04
Dow Indust Avg17810.06+0.51
S&P 5002063.5+0.52
Nasdaq Composite4712.90+0.24
Nikkei 22517357.51+0.33
Hang Seng23893.14+1.95
IndexLevelChg (%)
Nymex 1m76.62+0.14
Gold Spot1194.58-0.58
GBP/USD1.564-0.10
GBP/EUR1.2635+0.04
EUR/USD1.2379-0.10
USD/JPY118.26-0.39

There were further gains for US equities on Friday as investors reacted positively to the reduction in interest rates by China. This boosted both the cyclical Materials sector and the Industrials sector. Major climbers included Freeport-McMoRan up 3.57%, Caterpillar was up 4.27%, Tyco International gained 3.82% and Dow Chemical was up 2.64%. The S&P 500 index has now rebounded 11% since the October low and the VIX volatility measure also reflects this, falling back to a reading of only 12.9. In the Retailing sector, the Gap dropped 4.2% as the company issued a profit warning, Abercrombie & Fitch fell 1.34% in response. In the Software sector, design company Autodesk rose nearly 7% as the company beat expected results.

In Asia there were further gains, as investors were reassured that the Central Banks would continue to supply ample liquidity to the global financial system. Deflation remains a major challenge for many economies. Chinese Financials are strong with China Life and Haitong Securities up more than 5%. In Australia, BHP Billiton was up 3.8% and Rio Tinto gained 3.4%. In Japan, Nippon Paper was up just over 4%, Nikon was up nearly 3% and Unitika was up just over 5%. The South Korean market closed at the highest level since October 1st with Hyundai Wia up 8% on news of a major new engine plant investment.

Europe is a little mixed in early trading, with focus in the UK on the Life Assurance sector. Late on Friday, Aviva surprised the market by announcing advanced plans to bid £5.6 billion for Friends Life. The addition of some £20 billion of AUM could be potentially ‘game changing’ for Aviva. However there is some concern that the domestic deal goes against previously stated International expansion plans. Aviva is currently down 3.53%, whilst Friends Life is up nearly 8%. A major faller is Petrofac down 23% as the oil services company issued a major profit warning, impacted by the weak crude oil price.