Market commentary: Markets post positive performance across the board

On Tuesday markets posted a positive performance across the board, with the large majority of European equity indices closing higher on the day. The Euro Stoxx 600 Index gained over four tens of a percentage, while the FTSE 100 was slightly up by 0.2% and the German Dax closed about 0.25% down.

US markets were also positive yesterday, supported by energy names which soared with oil, as the black commodity added close to 4% in one of the largest daily rally in recent months. The S&P 500 Energy Sector index advanced as much as 2.53%, as oil related names gained across the globe. On Tuesday, BP Plc posted a daily gain of 3.74% in London, adding almost an additional 2% this morning.

Canadian Natural Resources Ltd, the second largest Canadian oil producer, gained 2.40% yesterday, soaring as much as 22.54% over the last 30 days. Large cap, mature producers benefited as well form the rally in the oil prices, as ExxonMobil Corp., the US-based world largest oil listed company, closed almost 2% up, and Royal Dutch Shell Plc gained 1.8%.

Overnight, Asian markets extended yesterday equities’ gains, with all major markets closing in the green early this morning. Australian equities closed flat on the day, while Japan’s Nikkei 225 advanced 1.30%. Once again Chinese stocks stole the spot light as equities listed in Shanghai and Hong Kong rallied the most in seven weeks. Hong Kong’s main index gained over 2%, adding to the gains recorded over the last for weeks. The Shanghai Composite Index rose as much as 4.31%, bringing the gains for the last 30 days to over 13%.

Fueling Chinese markets was the announcement of a new five-year strategic plan through which the Government plans to bolster economy and support the struggling domestic stock market. Additionally, speculations that an exchange-link between mainland Shenzhen and Hong Kong is in the making were sparkled by the Chinese Central Bank, supporting the daily rally and pushing equities higher.

Although European stocks recorded a strong opening this morning, following the rally witnessed in Asia, Volkswagen AG dropped over 5.5% at the beginning of trading on indiscretions that the ongoing pollution scandal could also extend to some of the engines powering the firm’s new models. While this has not been confirm yet, the US Environmental Protection Agency, one of the three government entities investigating the cheating VW’s pollutions systems, announced yesterday that it plans to file a claim against Porsche for adopting software aimed at tricking US’ car pollutions rules. If the rumors were to be true, this would be another major blow for the German carmaker, as the recently appointed CEO Matthias Mueller, promoted to the top job at VW after leading the Porsche division for years, would prove not to be the drastic change in management through which the firm hopes to regain some credibility.

Share in Volkswagen have declined more than 13% over the last month, after gaining some ground at the beginning of October. So far this year the once world’s largest car producer has lost over a third of its market capitalization, wiping out around EUR 20.6 billion of investors’ value.

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.