Market Update & Important Indicators
U.S. Markets were closed Monday for President’s Day. The U.S. gold price finished flat overnight, closing at 1346.00 US$/oz.
European stocks fell in light holiday trading while Asian bourses continued to rebound from an early February correction. The Stoxx Europe 600 ended the day 0.6% lower after three sessions of gains, brushing off an upbeat lead from Japan and Australia. Trading volumes were muted, with U.S. equity markets closed for Presidents Day, Canadian markets shut for Family Day and China shut for the Lunar New Year holiday. World stocks staged a broad-based rally last week as markets bounced back from an early February rout, marking the biggest weekly gain for the Stoxx Europe 600 since December 2016, the S&P 500 since 2013 and the Nasdaq since 2011. Most major equity benchmarks still remain well below their peaks in January, with stocks in Europe and Japan off roughly 6% and 8%, respectively.
European bank shares have risen 1.5% this year even as the wider Stoxx Europe 600 has fallen 2.8%, supported by expectations that higher rates will boost net interest margins. Meanwhile, Europe's so-called bond proxies in the stock market have lagged behind significantly behind this year as yields have climbed, with utilities, telecom and real-estate sectors falling 8.5%, 7.8% and 7.4%, respectively. The regional benchmark last week leapt 3.3%, recovering from its recent selloff and notching its best week since December 2016. Germany's DAX 30 index fell 0.5% to end at 12,385.60, and France's CAC 40 lost 0.5% to close at 5,256.18. The U.K.'s FTSE 100 was down 0.6% to reach 7,247.66.
Earlier, stocks mostly rose in Asia-Pacific trading, extending last week's rebound. Japan's Nikkei Stock Average closed up 2% in its biggest daily gain since January. Both retail and institutional investors in Japan were using the recent dip as a buying opportunity, against a background of healthy economic growth. Japanese exports rose for a 14th-straight month in January, Japan's finance ministry said. The Nikkei also got an extra lift as the yen shed some of its gains from last week. South Korea's Kospi rose 0.9%.
Broad gains helped push Australian stocks to their highest close in two weeks, as the major banks recovered some ground and corporate earnings season rolls on. Finishing near the session high, the S&P/ASX 200 rose 0.6% to 5941.6. After recent underperformance, National Australia Bank led the big lenders higher, advancing 0.8%. Beach Energy, Brambles, NIB and Seek each were up at least 1% after releasing earnings results. Still, the energy sector was held back by a 6.9% drop in Woodside's shares as it resumed trading after being halted for the institutional leg of an equity raising. Major mining companies also struggled, with BHP and Rio Tinto down by 0.3% and 0.6%, respectively. However, the wider materials sector was higher.
The London Metal Exchange’s 3-month copper contract traded lower overnight, slipping 1.6% to close at $7,118/t. The other base metals were mostly lower. Tin prices fell 0.9% to 21,685/t, whilst zinc prices dropped 0.6% to finish at 3,577/t. Bucking the trend, aluminium prices performed strongly again, adding 2.1% at 2,264/t. Lead prices shed 1.2% to 2,584/t, whilst nickel also lost further ground, falling 2.4% to 13,543/t.
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