Weaker GDP Data In US Lifted The Markets In Asia And In Europe

Asian markets closed higher today by recovering some of their losses. Trader picked up their momentum from US indices which closed in a positive territory on the back of a weaker GDP number for the US economy. This increased the optimism among investors that Fed may postpone their plan of tapering. However, mainland China remained deprived among traders as there were still concerns about the policy outlook.

The Nikkei Index was the best performing index during the session which closed with a gain of 2.96%. The index is still down nearly -7.77% so far this month. The Hang Seng index was the second best performer and closed with a gain of 0.50%. The Shanghai index on the slipped in a negative territory again and closed with a loss of -0.08%.

Energy sector came under pressure in Shanghai specially the coal miners. Shares of China Shenhua Energy Co. lost nearly -2.1%. But in Hong Kong shares enjoyed another day of gains and Industrial & Commercial Bank Of China Ltd. closed higher by 1.7%. Belle International Holdings Ltd, a major footwear maker also closed higher by 4.0%.

European stock markets are building up further gains on top of yesterday, during the early hours of trading. The economic data – Final GDP q/q reading came in line with the expectations with the final reading of 0.3%. The data showed that the UK economy avoided the double dip recession. The German Unemployment economic data also came better than anticipated and surprised the investors to the upside with a final reading of -12K while the forecast was 7K. This represented the strength for the German economy, which is the biggest economy in the euro area.

Subsea 7 SA tanked by nearly 14% after the company provided an update on its offshore Brazil project. Chemical Sector also came under major pressure on the back of sector downgrade by JP. Morgan Cazenove. Shares of BASF SE, Lanxess AG and Solvay SA all dropped nearly by -2.67%, -3.99% and -4.53% respectively.

DISCLOSURE & DISCLAIMER:
The above is for informational purposes only and NOT to be construed as specific trading advice. responsibility for trade decisions is solely with the reader.

by Naeem Aslam