On Friday markets experienced a rather volatile session, as European stocks rallied in the morning amid optimism around the September’s US Jobs Report, plunged into negative territory upon the release of disappointing job data, and rallied back into positive territory after investors priced in a further US interest rate hike’s postponement. With the US Jobs Report coming in at 143,000, way below the expected 200,000 level, investors decided to take profits off the table before the potential benefits of an interest hike postponement outweighed fears over global growth.
US equities mirrored continental markets, opening lower on the disappointing Jobs Report’s numbers, trading in negative territory for half of the trading session before buyers made their way back in to the market, pushed stocks higher and helped equity indices across the world to close in the green. The DJIA, which opened 229 points down on Friday, closed the session 1.23% higher, while the S&P 500 and the Nasdaq closed the week booking a 1.43% and 1.74% gain respectively.
Overnight Asian markets extended gains in the equity sector, fueled by a surge in commodities prices and an unforeseen rebound in commodity giant Glencore Plc, which soared as much as 72% in Hong Kong, after rumors concerning an asset sale reached the markets. In fact, Bloomberg News has reported late last week that three major players, Singapore’s Sovereign Fund, Japan’s conglomerate Mitsui & Co. and at least one major Canadian Pension fund, showed interest in buying a sizable minority stake in Glencore’s agricultural business. Glencore’s London listing also jumped higher this morning, adding over 8% at the opening of European trading.
European markets continued on an uptrend this morning, with the Euro Stoxx 600 Index adding over 2% an hour into the trading session, supported by the commodities prices upswing, the rally in Glencore Plc, and the electoral win of Portugal’s ruling coalition, which has overseen the country’s exit from the ECB/IMF jointly financed bailout requested by Portugal in 2011.The main Portugal’s equity index rallied 2.25% this morning, capitalizing on the positive news, which represents a step towards a reduction in the political uncertainty hanging over Europe.
Another interesting news came out of Europe this morning, as Telenor ASA, the largest Scandinavian telecom name and a major European player within thetelecommunication sector, announced its intention to sell its entire minority stake in Russian competitor VimpelCom Ltd. The move comes as a financial and strategic decision for the Norwigian firm, which holds 33% of VimpelCom, and which wishes to exit the increasingly unprofitable Russian market, withdrawing its support after being prevented to take full control of the Russian company. Shares in Telenor jumped over 1.5% in Oslo, as investors welcomed the divestment from VimpelCom, whose shares prices has declined around 70% this year and will most likely impose Telenor to take a NOK 7.5 billion non-cash impairment on this investment at the end of the third quarter of this year.
With Asian markets closing in positive territory, European equities trading higher this morning and US futures pointing to a positive opening for US stocks, a rebound may be finally at hand, after equities across the globe witnessed one of the worst quarters since the advent of the financial crisis in 2008.
This article was issued by Paolo Zonno, Trader/analyst at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri & Co. Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.