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Global Market Report - October 13 2017

The Nikkei hit another 21-year high, while US investors are looking ahead to more bank earnings and September's inflation numbers

James Gard 13 October, 2017 | 10:50AM

Asia

Japan’s bull run continued on Friday, with the Nikkei index surging above the 21,000 points level last seen more than 21 years ago. The upwards move came despite a lower close on Wall Street after a record run.

The price-weighted Nikkei index rose 200 points to close at 21,155.18, with strong gains seen in the afternoon trading session. The market-cap weighted Topix index closed up 0.5% at 1708.62. The Nikkei was the best performing of Asia-Pacific indices today, with modest gains seen for China’s CSI 300, Hong Kong’s Hang Seng. India’s BSE Sensex was up nearly 1% in afternoon trading, just below record high levels.

A surge in Chinese imports in September gave investors evidence that the Asian economy is successfully rebalancing its economy towards domestic consumption. 

Europe

The FTSE 100 hit a record high on Thursday of 7556.24 as a Brexit-inspired lurch downwards in sterling had the opposite effect on London-listed equities. On Friday though the index struggled to make headway as a profits warning by engineer GKN (GKN) weighed on investor sentiment – the company’s shares were over 7% lower in morning trading to 327.50p. A bouncebak in the pound on Friday morning also held back equity prices.

Continental indices were treading water at the approach of midday. Germany’s September inflation came in exactly as expected at an increase of 1.8%. The country’s Dax index inched towards another new record high, helped by a rise in Bayer (BAYN) shares on news about a sale of its seeds and herbicide business.

North America

Citigroup (C) and JP Morgan (JPM) beat Wall Street forecasts yesterday at the start of earnings season, but both companies’ stock prices ended the day in the red. Today it’s the turn of Bank of America (BAC) and Wells Fargo (WFC), before market open, which are expected to post earnings of 46 cents and $1.04 a share respectively. On Thursday the International Monetary Fund (IMF) warned that banks such as Citigroup would struggle to be profitable this year.

Investors will also be focused on September inflation numbers before the market open. The year on year increase in the cost of living – as measured by the Consumer Price Index – is forecast to be 2.3% for September, against 1.9% in August.

Also of importance are data on retail sales in September and University of Michigan confidence surveys. 

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Securities Mentioned in Article
Security NamePriceChange (%)Morningstar
Rating
Bank of America Corporation27.17 USD2.22
Bayer AG117.80 EUR-0.13
Citigroup Inc73.53 USD0.89
GKN PLC313.10 GBX3.20
JPMorgan Chase & Co99.51 USD1.43
Wells Fargo & Co54.92 USD2.18
About Author

James Gard  is subeditor for Morningstar.co.uk