Most global markets finished the week in the black, recording their first weekly-gains as the ECB signalled on the possibility of further easing its ongoing monetary, and the rebound in oil prices.
US: Dow Jones Finishes Above 16,000
Early in the week, most of the major indices were falling as much as 4%, in response to the continued slump in the oil price, along with the slowdown in China. However, the stocks recovered as investors were relieved from ECB’s president Mario
Draghi’s comments to review their stance and as oil rebounded 8% on Friday, to more than $US31 a barrel.
The S&P 500 added 1.5% for the week, to 1,907 points. Likewise, the Dow Jones Industrial Average finished 0.6% up for the week, to just over 16,000 points. In similar fashion, the NASDAQ Composite rallied over 2% upon the end of the week, to 4,591 points.
The Consumer Price Index data that was released last week, was lower than expected. Additionally, the crude oil inventories are rising and unemployment claims have also increased. This has given rise to the speculation that the Federal Reserve may need to continue to support the economy instead of following the ‘gradual’ rate hike programme.
Europe: Renewed Calm upon ECB Holding Rates
While most of the European markets were in the red until mid-week, the stocks buoyed on the last two days as the London FTSE 100, German DAX, and the Euro STOXX 50 gained more than 2% for the week.
There was a sense of ‘relief’ within the European markets as the ECB held the interest rates at a record low 0.05% and signalled that it might increase the monetary stimulus if required.
Asia: Finishes Higher For the Week; Speculation of Renewed Stimulus
Moreover in Asia, the story was very much similar. The Chinese market finished the week on a high note, with the Shanghai Composite and CSI 300 finishing 0.6% and 1.6% up for the week respectively. The Japanese Nikkei 225 also finished in the green, up approximately 0.8% for the week.
The Asian markets were particularly supported by ongoing speculation that Chinese regulators will stimulate the slowing economy, along with making efforts in ensuring the stability of the equity markets.
ASX: Up 0.5% Last Week
The ASX finished in the green for the week, with the S&P/ASX 200 adding 0.5% for the week, to 4,916 points. The rebound in the oil prices lifted energy and material shares substantially.
Iron Ore giants BHP Billiton (ASX:BHP) and Rio Tinto (ASX:RIO), finished down % and 0.3% respectively, to $15.31 and $39.64.
Despite oil rebounding last week, oil miners Santos (ASX:STO) and Woodside Petroleum (ASX:WPL) finished down 1% and 6% respectively, to $2.82 and $25.47.
Gold miner Northern Star Resources (ASX:NST) finished over 16% for the week, to $3.22.
Author: Simon Herrmann
Jan 25, 2016
Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.