Traders cash in their gains

Global stocks got off to a slippery start on Monday. Asia and Europe were both trading lower, as Chinese shares continued their recent poor run, and European shares dropped on the back of downbeat data from Germany. US stocks were also falling on Monday, as investors opted to stay on the side-lines ahead of meetings from the Bank of Japan and Federal Reserve later in the week.

Germany’s DAX was the regions underperformer, and lost 0.76% after the IFO issued an unexpected fall in its German business sentiment reading. As German business morale fell in April, various German companies were led lower. Volkswagen dropped 1.87% and Daimler gave up 0.7%.

Mining shares also struggled at the start of the new trading week. Platinum provider Anglo American was the biggest loser after tumbling 7.33%. Iron ore heavy weigh BHP Billiton fell 5.39% and Rio Tinto fell 4.16%.

Oil and gas shares were trading in the red on Monday, as traders cashed in their profits after a strong rally last week. Crude oil started the day off optimistically, but ended up giving up its mid-day gains to trade just over $43 a barrel. This led big oil companies lower, with BP losing 2.16% and Royal Dutch Shell dropping 2.52%. BP is due to release its first-quarter results on Tuesday.

But topping the index was Imperial Brands PLC, whose shares climbed 3.07% after the tobacco makers rating was upgraded to a Buy at Goldman Sachs. Fashion retailer Ted Baker also jumped 4% on a broker upgrade.

Shares in Sports Direct International were also having a green day, as reports emerged that the retailer has discussed a possible buyout of BHS. Shares of Sports Direct gained 0.77%.

It was also a good day in the precious metals industry, as traders paused their heavy selling that drove prices lower at the end of last week. Gold for June delivery advanced $12.60, or 1% to end the day at $1,242.60 an ounce. Silver also gained 0.86%, or 15 cents to end the day at $17.05 an ounce.

Central Bank policy meetings in Japan and the US are the focus of investor’s attention this week. Signs of rising inflation in the US might tempt the Fed to adopt slightly more hawkish language in its monetary policy statement on Wednesday. The Fed – which raised interest rates in December, is widely expected to leave rates unchanged this week. However, a key question to investors right now is whether the Fed is on course to raise interest rates again this year and, if so, how many times?

Meanwhile, companies representing more than a third of the S&P500’s market cap are scheduled to report earnings this week! Tuesday will see the likes of Apple, Procter and Gamble and eBay releasing their first quarter figures, while Facebook’s figures are likely to be highly monitored on Wednesday. Amazon, Master card and Time Warner are scheduled for Thursday, while Exxon Mobil, Chevron and Phillips will close off the week on Friday.

This article was issued by Rebecca Naudi, Trader 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