Global Market Report - September 5 2017

European markets gained on stronger earnings and takeover news, despite mixed services data

James Gard 5 September, 2017 | 11:28AM
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Asia

Markets in the region were more preoccupied with the strength of the Chinese economy on Tuesday than the looming threat from North Korea. Today sees the publication of Chinese service sector data, following on from Friday’s positive manufacturing numbers. The country’s Caixin services PMI came in at 52.7 for August, against 51.5 the previous month.

China’s CSI 300 closed up 0.3% at 3875.05, while the Shanghai and Shenzhen composite indices were higher on the day. Japan’s economic data was less impressive, with both services and composite data coming in below July’s level. The Nikkei closed down nearly 1% at 19,385.31, with the Topix closing down 0.8% at 1590.71, hit by fears that North Korea is planning to fire another ballistic missile this week.

In company news, Japan Post Holdings, which provides banking and postal services, announced plans for a share sale worth around $10 billion to local and overseas investors for September. Australia’s ASX was also lower at the close, as the Reserve Bank of Australia left interest rates at 1.5% amid sluggish economic growth.

Europe

Investors in the eurozone had to digest a whole range of economic surveys on Tuesday, not least services data for France, Italy and Germany. Only Germany’s services PMI beat forecasts, while the survey for the whole eurozone was below forecasts for August and lower than the previous month. Swiss investors shrugged off a fall in GDP growth for the second quarter, with the SMI index ending higher on the day, despite the Switzerland economy only growing 0.3% year on year, against forecasts for a 1% rise. In the UK, the FTSE 100 was a touch higher in midmorning trading, despite disappointing numbers from Britain’s dominant services sector in August.

Provident Financial Group (PFG), which is leaving the FTSE 100 index on September 18 after a torrid month, was down nearly 8% at 790p – the shares were above £30 earlier this year. FTSE 250 housebuilder Redrow (RDW) was up nearly 5% on stronger annual results: the company hiked its dividend by 70% amid a rise in profits, completions and prices paid.

Shares in engineering software Aveva Group (AVV) rose nearly 30% after France’s Schneider agreed a deal to take the company over.

North America

Markets in the United States and Canada reopen on Tuesday after the Labor Day weekend, giving indices the chance to react to the latest developments in Asia. Futures markets suggest a fall in the Dow and S&P at the open.

In US economics, durable goods and factory orders for July are the standout numbers. Hewlett Packard Enterprise (HPE) is reporting after the market close, and in Canada, department store company Hudson’s Bay (HBC) reports earnings to the end of July 2017.

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.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
AVEVA Group PLC2,974.00 GBX1.50
Hewlett Packard Enterprise Co16.74 USD-3.35Rating
Japan Post Holdings Co Ltd966.10 JPY-0.09
Provident Financial PLC363.20 GBX1.40
Redrow PLC640.00 GBX-0.31

About Author

James Gard  is content editor for Morningstar.co.uk