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Global Market Report - November 21 2017

Hong Kong and China indices powered ahead while European indices were slightly higher despite political distractions over Brexit and Germany

James Gard 21 November, 2017 | 10:54AM

Asia

Wall Street’s positive close on Monday set the tone for a rebound in Asian equity markets on Tuesday. Hong Kong’s Hang Seng was the best performer in the region, surging over 500 points to 29,818 – close to pre-financial highs of above 30,000 points. Once again, Tencent (00700) was a star performer on the index, rising over 2% to 430 Hong Kong dollars, and overtaking Facebook (FB) in terms of dollar market capitalisation. China’s CSI 300 also rallied, gaining nearly 2% to 4217.

Ahead of Thursday’s public holiday, Japanese indices managed to push higher despite a lack of strong drivers from earnings announcements and a slight strengthening in the yen against the dollar.

Europe

The UK Chancellor, Philip Hammond, received some unwelcome news on the nation’s finances ahead of Wednesday’s Budget statement. While September had seen a fall in public sector net borrowing to £5 billion, October’s borrowing figures were above forecasts at £8 billion.

On the FTSE 100, easyJet (EZJ) was the biggest riser as the budget airline’s investors focused on a surge in passenger numbers in the full year rather than a fall in profit and a cut in the dividend. In the FTSE 250, power generator firm Aggreko (AGK) saw its shares off over 10% as it said that emerging market weakness has hit third-quarter results. The FTSE 100 itself was slightly higher in midmorning despite a strengthening in sterling.

Germany’s political crisis took another twist on Tuesday with news that Chancellor Angela Merkel favours a re-run of September’s election rather than further coalition talks. Nevertheless, the main Dax index was higher towards midday. 

North America

Existing home sales for October are the standout in terms of economics on Tuesday and the forecast is for a modest month on month rise. Federal Reserve chair Janet Yellen will be speaking to Stern Business School after the market close. The speech comes as Yellen announced that she will step down from the Federal Reserve board as soon as her successor, Jerome Powell, is sworn in. This means that Donald Trump will need to nominate another member to the seven-person Federal Reserve board.

Customer relationship management firm Salesforce (CRM) is releasing earnings after the market close which are expected to be 50% higher than the equivalent period last year.

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
Aggreko PLC758.00 GBX-2.82-
easyJet PLC1,417.00 GBX-0.63-
Facebook Inc A179.97 USD0.89
Tencent Holdings Ltd389.00 HKD-2.06
About Author

James Gard  is subeditor for Morningstar.co.uk