Foreign Stock Roundup: Novartis, UBS & Posco Results Impress, Sanofi Buys Bioverativ

 | Jan 28, 2018 09:47PM ET

The government shutdown in the United States guided stocks across Europe and Asia last week. Meanwhile, world leaders continued to deliberate on crucial issues such as trade at the World Economic Forum in Davos. Stocks across Asia also gained direction from the dollar’s plunge. Meanwhile, stocks in Brazil and Argentina breached key levels following encouraging legal developments.

Earnings, Corporate Developments Guide Europe’s Stocks

Stocks across Europe finished in the green last Monday as investors attempted to shrug off fears emanating from the U.S. government shutdown. The STOXX 600 gained 0.3% with all major sectors ending mixed. Most indexes closed in the black with the CAC 40 and the DAX ending 0.3% and 0.2% higher. However, the FTSE 100 declined by 0.2%. Travel and leisure stocks were the leading losers, closing 0.8% lower. Banks and telecom stocks each closed the session 1% higher.

The STOXX 600 increased by 0.1% last Tuesday with nearly all the sectors finishing in the green. Stocks across the region were guided by corporate developments following the end of the government shutdown in the United States. The DAX closed ahead of all other indexes while the CAC 40 ended slightly lower.

Markets across Europe closed in the red last Wednesday as investors continued to receive news on individual stocks. The STOXX 600 declined by 0.5% as nearly all major sectors closed with losses. Among the day’s worst performers were utilities stocks. Meanwhile, the number of employed individuals in the U.K. increased by 102,000 during the September-November 2017 period. This took the number of employed to a record 32.2 million even as the FTSE 100 closed with losses.

The STOXX 600 lost 0.6% last Thursday with nearly all major sectors closing in the red. Investors assessed the latest comments from the ECB even as the region’s central banks refrained from raising rates. ECB Chairman Mario Draghi said recently observed exchange rate volatility was a “source of uncertainty” and would require constant monitoring. Investors also continued to receive news from the World Economic Forum being held at Davos.

Bullish earnings numbers helped most of Europe’s stocks to close in the green last Friday. The STOXX 600 gained nearly 0.5% with most sectors finishing in the green. The CAC 40 emerged as the best performer among its counterparts, powered by strong earnings numbers. Meanwhile, U.K.’s GDP increased by 0.5% during the last quarter of 2017, exceeding most analysts’ estimates. Additionally, President Trump addressed world leaders at Davos, saying that the United States desires “fair” and “reciprocal” trade even as several countries were exploiting others in trade agreements.

Dollar’s Slide, U.S. Government Shutdown Guide Asia’s Stocks

Stocks across Asia ended mixed last Monday even as investors digested political developments surrounding the government shutdown in the United States. The Nikkei ended mostly unchanged, gaining a mere 0.03%. South Korea’s manufacturing, finance and retail stocks closed mixed even as the Kospi ended 0.7% lower. The S&P/ASX 200 also closed in the red, losing 0.2%. The Shanghai Composite and the Shenzhen Composite advanced by 0.4% and 1.2%, respectively.

Asia’s markets rebounded last Tuesday after Wall Street chalked up gains following an end to the U.S. government shutdown. Meanwhile, the Bank of Japan opted to keep interest rates unchanged. The Nikkei 225 added 1.3% after reaching its highest level in 26 years earlier in the trading session. The Kospi and the S&P/ASX 200 added 1.4% and 0.8%, respectively. The Shanghai Composite and the Shenzhen Composite increased by 1.3% and 0.4%, respectively. Meanwhile, the CSI 300 advanced by 1.1%.

The dollar continued to slide versus a basket of currencies last Wednesday even as Asia’s markets finished mostly in the black. The Nikkei 225 lost 0.8% even as the Kospi and finished 0.1% higher. The S&P/ASX 200 gained 0.3% even as Australia’s major banks ended with gains. Meanwhile, major mining companies ended with losses. The Shanghai Composite and the Shenzhen Composite added 0.4% and 0.5%, respectively.

Stocks across Asia closed in the red last Thursday even as the dollar remained weighed down after sliding in the last session. The Nikkei 225 lost 1.1% while the Kospi gained nearly 1%. The S&P/ASX 200 inched down by 0.1% even as gains made by materials stocks were outweighed by losses suffered by industrials and utilities. The Shanghai Composite and the Shenzhen Composite lost 0.3% and 0.4%, respectively.

Comments from President Trump led to Asia’s markets closing mixed last Friday. The Nikkei 225 lost out on early gains to end the session 0.2% lower. In contrast, the Kospi overcame early losses to gain 0.5%. Markets across India and Australia were closed for Republic Day and Australia Day, respectively. The Shanghai Composite and the Shenzhen Composite added 0.3% and 0.2%, respectively.

Bovespa Surges as Lula Conviction is Upheld, Merval Breaches 35,000 Barrier

Stocks in Brazil traded within a tight range last Monday. Investors were wary of betting big before the trial of former president Luiz Inácio Lula da Silva, a major contender for this year’s elections. Even so, the Bovespa gained 0.6%. Meanwhile, Mexico’s benchmark S&P/BMV IPC index also gained 0.6%.

Last Tuesday, the Bovespa lost 1.2% after traders indulged in profit taking following recent gains. Shares of mining company Vale SA (NYSE:VALE) dropped by 4.2%. Brazil’s benchmark index hit an all-time high last Wednesday. The Bovespa gained 3.7%, surging above the 83,000 mark after an appellate court upheld convictions against former president Lula for bribery and money laundering.

Lula is opposed to current president Michel Temer’s reforms agenda. Leading the gainers during this session were the likes of Itaú Unibanco (NYSE:ITUB) , Banco Bradesco (NYSE:BBD) and Petrobras (NYSE:PBR) . Argentina’s stocks also enjoyed considerable gains with the benchmark Merval index gaining 3.1% to hit a record level of around 35,000.

The Merval gained 0.6% last Thursday, surging above the 35,000 mark for the first time even as mixed signals over the U.S. dollar emerged. Brazil’s markets were closed for the Sao Paulo anniversary holiday.

The Bovespa reopened on a strong note last Friday, gaining 2.2% to hit an all time high of 85,530.84. The index gained more than 5% over last week after an appeals court upheld former president Lula’s conviction. Blue chip stocks such as Petrobras mopped up gains but Vale suffered losses following a drop in iron ore prices. Mexico’s S&P/BMV IPC index gained 0.6% to close at its highest level since early September.

Stocks in the News

UBS Group AG (NYSE:UBS) reported fourth-quarter 2017 net profit attributable to shareholders of CHF 955 million ($967.7 million) on an adjusted basis, up around 25.2% from the prior-year quarter. Results exclude deferred tax expense. UBS has a Zacks Rank #3 (Hold).

Including deferred tax expense, net loss attributable to shareholders came in at CHF 2.2 billion ($2.23 billion) compared with net income of $636 million recorded in the prior-year quarter.

Results displayed rise in net fee and commission income (up 3% year over year) and higher trading income (up 4% year over year), partially offset by decrease in net interest income (down 5% year over year). Notably, the quarter benefited from the company’s continued focus on expense management.

For 2017, net profit attributable to shareholders was CHF 5.3 billion on an adjusted basis, up 23.3% from the prior year. Including one-time adjustments, net income came in at CHF 1.2 billion, down 62.5% from the prior year. (Read: Shire Gets FDA Nod for Cinryze Tech Transfer to New Site )

Performance of Leading Foreign Stocks

The table given below shows the price movements of 10 of the largest stocks listed on indexes worldwide, over the last five days and during the last six months.

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