Tuesday, 31 March 2015

Daily Market Analysis 31.03.2015

Global stock indices increased as economic data and merger activity in the US and Europe improved investor sentiments.

At the London afternoon fixing, gold declined $10.25 to $1185.50, and copper futures were up 0.6% to reach $2.78. In oil, Dated Brent spot crude decreased $0.28 to reach $56.13 and WTI spot crude dropped $0.39 to reach $48.48.

The Dollar Index increased 0.7% as the USD increased relative to the EUR, JPY, GBP, CAD, AUD and CHF.

United States Equities
Stocks in the US peaked on Monday as Fed Chair Janet Yellen announced that continued improvement in the US economy will reflect an increase in the Fed’s key interest rate in the near future, albeit gradually. The Dow Jones industrials increased 1.5%, the S&P climbed 1.2% and the Nasdaq rose 1.15%.

UnitedHealth Group advanced on news that it has agreed to buy pharmacy benefits manager Catamaran. Catamaran gained on the day. Auspex Pharmaceuticals gained after it agreed to be acquired by Teva Pharmaceuticals Industries for an approximately $3.2 billion cash payment. Horizon Pharma added 15% on news that it is buying Hyperion Therapeutics for $1.1 billion. Both companies advanced on the day. BioDelivery Sciences International lost after the drug developer said its potential treatment for pain related to diabetic neuropathy did not meet its main goal in a key study. Fujifilm Holdings agreed to acquire Cellular Dynamics International for $307 million.

European Equities
Over in Europe, equities markets were up. Eurozone economic sentiment improved with optimism for a resolution to the financial situation in Greece. Greece is set to resubmit a list of economic reform proposals to international creditors today after Prime Minister Alexis Tsipras' previous proposal met resistance from EU leaders. Germany's consumer prices increased for the second straight month in March and Italy's consumer confidence and business confidence climbed strongly in March, strengthening hopes of recovery in the economy.The London FTSE was up 0.5%, the French CAC gained 1.0%, the German DAX advanced 1.8%, while the Swiss SMI increased 1.3%. The Italian MIB and Spanish Ibex edged up 1.2% and 0.9% respectively.

In terms of individual stocks, Adidas edged up on a broker upgrade. Deutsche Bank, Commerzbank, Société Générale, Crédit Agricole and BNP Paribas all gained on the day. Daimler, BMW, Volkswagen, Peugeot and Renault all climbed on the day. WPP was up on a broker upgrade.

Asia Pacific Equities
Equities markets in the Asia Pacific region were up as the JPY declined and commentary from People's Bank of China Governor Zhou Xiaochuan supported the case for further monetary easing. Investor sentiment was also improved following Federal Reserve Chair Janet Yellen’s talk on Friday that emphasized a gradual return to normal interest rates. In China, the Shanghai Composite increased 2.6%, while in Hong Kong the Hang Seng index was up 1.5%.
In Japan, the Nikkei increased 0.7%. Honda Motor, Canon, Sony, Nissan Motor and Kyocera advanced as did Fast Retailing and Fanuc. Kikkoman surged after reporting that it will record operating profit of about ¥24.7 billion.

In Australia, the S&P/ASX 200 and the All Ordinaries decreased 1.2%.

Macro Themes and Looking Ahead
Germany will be releasing February retail sales and March unemployment. The UK will report its final revision for fourth quarter GDP. Canada plans to post February monthly gross domestic product. Also to be released are March consumer confidence and Chicago PMI.

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