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European equities trade near one-month low, telecoms slump

European shares fell to near a one-month low on Monday, with telecom shares slumping after talks between Orange and Bouygues on a deal to create a dominant French telecoms operator collapsed.

The STOXX Europe 600 Telecommunications index fell 2 percent, the top sectoral decliner, following the failure on Friday of the proposed 10 billion euro ($11.4 billion) cash-and-share deal.

Shares in Orange fell 6.8 percent, Bouygues slumped 15.7 percent, Iliad fell 14.5 percent and SFR dropped 16.5 percent.

The pan-European Stoxx 600 index is down 0.4 per cent at the open as energy groups feel the effect of weak oil prices. Brent crude is off 1.2 per cent to $38.32 a barrel, extending Friday’s tumble after Saudi Arabia’s deputy crown prince cast doubt on a deal between major producers to curb output.

The Asian session was mixed, with markets in Hong Kong and China shut for a public holiday.

US index futures suggest the S&P 500 in New York will be hardly changed at 2,073.

On Friday the Wall Street barometer — which tends to drive global stock market sentiment — rose to its best close of the year after jobs data showed the US economy had added 215,000 jobs, a touch above expectations.

The unemployment rate ticked up to 5 per cent from 4.9 per cent but, encouragingly, that was due to the number of people in work or actively looking for a job rising to its highest level since March 2014.

Nikkei falls to fresh 1-month low on strong yen

Japan’s Nikkei share average fell to a fresh one-month low on Monday as the dollar sagged against the yen despite a stronger-than-expected U.S. jobs report, while automakers skidded after posting disappointing sales.

The Nikkei dropped 0.3 percent to 16,123.27 points.

The broader Topix rose 0.1 percent to 1,302.71, supported by buying in such defensive stocks as drugmakers.

The JPX-Nikkei Index 400 was flat at 11,743.32.

Gold is down $7 at $1,215 an ounce.

 

A closely watched gauge of Australian inflation from the Melbourne Institute showed core consumer price growth moderated to 1.7 per cent last month from 2.1 per cent in February. The data come ahead of the Reserve Bank of Australia’s policy meeting tomorrow, where it is expected to keep interest rates on hold at a historic low of 2 per cent.

Looking ahead, RBA, FOMC minutes, ECB monetary policy meeting accounts will be the main focus of the week.

Dollar was under some pressure since dovish speech of Fed chair Janet Yellen last week. But the overall tone differed among other policy makers.

Here are some highlights for the week ahead:

  • Tuesday: RBA rate decision, Australia trade balance; German factory orders, Eurozone retail sales; UK services PMI; Canada trade balance, US trade balance, ISM non-manufacturing.
  • Wednesday: German industrial production; Canada Ivey PMI; FOMC minutes
  • Thursday: Swiss foreign currency reserves; ECB meeting accounts; Canada building permits; US jobless claims
  • Friday: Japan unemployment; German trade balance; Swiss unemployment, CPI; UK productions, trade balance; Canada employment, housing starts; US wholesale inventories.

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