On 2 March, 2015 – European markets were mixed largely due to profit taking
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On 2 March, 2015 – European markets were mixed largely due to profit taking

March 3, 2015
|In Global Round Ups
|By Jesmond Mizzi Financial Advisors

Stocks were mixed in Europe but advanced in both the Asia Pacific and the US in part on merger deals. Asian indices were boosted by the weekend reduction in interest rates by the People’s Bank of China.
United States
Nasdaq closed above 5,000 for the first time since the 2000 dot-com bubble, as technology stocks were boosted by deals. The S&P and Dow Jones industrials ended at record highs after economic data pointed to a slowly accelerating economy. Both the Dow and Nasdaq added 0.9% while the S&P was 0.6% higher. For the Nasdaq it was only the third time the index has closed above 5,000 in its 44-year history. The other two were March 10, 2000 when it closed at a high of 5,048, and the day before.
CHIPPY NXP Semiconductors said Sunday that it’s planning to acquire Freescale Semiconductor in an US$11.8 billion deal. The merger would create the largest supplier of microchips for cars. Boards of both companies have already approved the deal, but regulators still need to sign off on it. Sotheby’s stock sank after the auction house posted a big drop in quarterly earnings. Higher expenses weighed on the company’s profits, which came in below analysts’ estimates.
Hewlett-Packard announced an agreement to buy Aruba Networks, a company that makes Wi-Fi systems for shopping malls and hotels for US$2.7 billion. It is the biggest deal for HP since Meg Whitman, its chief executive, began an effort to turn around the company. Endo International gained after the health care company reported earnings and revenue that beat analysts’ expectations. Costco Wholesale named Citigroup and Visa as its new credit partners. Cardinal Health agreed to acquire Johnson & Johnson’s heart product business for US$1.94 billion in cash. Cardinal and J&J both gained on the day.
January consumer spending slipped 0.3% reflecting a big drop in gas prices during the month. Income was up 0.3% reflecting strong job gains during the month. Stocks remained higher after the Institute for Supply Management said its manufacturing index edged down in line with expectations to a reading of 52.9 from 53.5 in February.
Gold at the afternoon London fixing was down US$1.50 to US$1,212.50. Copper futures were up 0.1% to US$2.69. WTI spot crude was up 8 US cents to US$49.84. Dated Brent spot crude was down US$2.80 to US$59.78. The US dollar was up against all of its major counterparts including the euro, yen, pound, Swiss franc and the Canadian and Australian dollars. The Dollar Index was up 0.1%. The yields on both the US Treasury 30 year bond and 10 year note were up 10 basis points to 2.69% and 2.09% respectively.
Europe
Stocks indices were mixed to begin the week. Europe built on the strong performance of the Asian markets in early trading after China’s People’s Bank of China announced an interest rate cut over the weekend. The drop in the euro area jobless rate also contributed to the early strength. However, markets later reversed direction, partly due to profit taking following recent gains which have brought the European markets to new multiyear highs. Reports out of Spain also stated that the Eurozone is in the midst of negotiating a third bailout package for Greece, which will be between €30 billion and €50 billion. The FTSE slipped 0.1% and the CAC lost 0.7%. However, the DAX and SMI added 0.1% and 0.5% respectively. The FTSE touched a record intraday high of 6,974.26 before retreating. Early gains were propelled by mining stocks after China cut interest rates over the weekend.
Car parts maker ElringKlinger declined after the company reported full year results today. Both E.ON and RWE retreated. BMW, Daimler and Volkswagen advanced. Vivendi declined after the company’s board approved an agreement to sell its remaining 20% stake in cable and wireless carrier Numericable-SFR to Altice for €3.9 billion. Lafarge, Solvay, Total and Technip were down. Crédit Agricole, BNP Paribas and Société Générale advanced. Intertek Group was up after it lifted its dividend. Tullow Oil and Royal Dutch Shell were down. Royal Bank of Scotland, Barclays and Lloyd’s Banking Group gained on the day.
Eurozone final manufacturing PMI for February was unchanged from January with a reading of 51. Euro area jobless rate declined 11.2%, the lowest since April 2012. Flash February harmonized index of consumer prices dropped 0.3% on the year after sinking 0.6% in January. In the UK, the February manufacturing PMI climbed to 54.1 from January’s reading of 53.1.
Asia Pacific
Asia Pacific stocks advanced Monday as investors shrugged off soft US data and instead focused on the weekend interest rate cut in China. However, the rate cut had only a limited impact on investor sentiment as the move was largely priced in. The Shanghai Composite was up 0.8% after the People’s Bank of China cut its one year lending and deposit rates by 25 basis points each to 5.35% and 2.5% respectively. This is expected to stimulate the Chinese economy amid concerns of slowing economic growth. The CFLP manufacturing PMI edged up to a still contractionary 49.9 from 49.8 in January. However, according to the February HSBC manufacturing survey, the PMI reading was 50.7, up from 49.7 in January. The Hang Seng was up 0.3%.
The Nikkei edged up 0.2% to close at fresh 15-year highs. A weaker yen and domestic pension-fund buying underpinned sentiment. Fast Retailing, the parent company of apparel retailer Uniqlo, advanced ahead of the release of its latest sales figures. Toyota Motor, Nikon and Panasonic advanced as the yen weakened for a third day. Nippon Telegraph & Telephone rallied on a report one of its units is looking to acquire German data center operator e-shelter GmbH for about ¥100 billion. Mitsui OSK Lines advanced after it signed a deal for construction of four 20,000 TEU containerships with South Korea’s leading shipbuilder Samsung Heavy Industries. Taisei declined on equity dilution worries after the company said it would issue new shares overseas. Sony shares were down on profit taking after rallying Friday.
Both the S&P/ASX and All Ordinaries were up 0.5% following China’s rate cut announcement. The big four banks advanced ahead the Reserve Bank of Australia’s rate decision Tuesday, with expectations running high that the RBA will cut its official cash rate again after the surprise reduction to 2.25% in February. Miners BHP Billiton and Rio Tinto rallied while Fortescue Metals Group retreated. Orica climbed after it unveiled an A$400 million share buyback after completing the sale of its chemicals division. The Kospi added 0.6% led by Samsung, refining and construction stocks. The Sensex was up 0.8%.
Global Stock Market Recap

Please remember, the value of investments and the income from them can do down as well as up. Funds that invest in overseas markets may be subject to currency fluctuations. Investments in small and emerging markets can be more volatile than other overseas markets. Reference in this document to specific securities should not be construed as a recommendation to buy or sell these securities, but is included for the purposes of illustration only.
Looking forward*
The Reserve Bank of Australia announces its monetary policy decision. Germany reports January retail sales. The UK releases February construction PMI while the Eurozone posts January producer price index. Canada reports fourth quarter gross domestic product.
*Note — all releases are listed in local time.
Anne D PickerChief EconomistEconoday