Asia
With Japanese stock markets yet to trade in 2018, Chinese equities took centre stage again with a rise at least partly inspired by another push higher on Wall Street on Tuesday night. China’s strong manufacturing numbers yesterday were also a driving force – today the Shenzhen Composite Index was a stronger performer than the Shanghai equivalent. Hong Kong’s Hang Seng made a strong start to 2018’s trading on Tuesday but gains were more modest today.
Europe
Early indications of UK retailers’ Christmas trading were rather downbeat, so Next’s forecast-beating update to the market came as an unexpected surprise. Next (NXT) shares have struggled in recent years, having come off a high of £80 in 2015 to hit £36 a share in the summer of 2017. Today’s update, which included a small increase in full-year profit guidance, helped lift the shares nearly 7% higher to £48. The move helped the FTSE 100 back into positive territory after an uncertain start to the day’s trading, and also helped clothes retailers such as Primark owner Associated British Foods (ABF) and Marks & Spencer (MKS). Britain’s largest supermarkets start reporting Christmas trading figures next week.
The FTSE 100 was also helped by a softening pound after the Purchasing Managers’ Index (PMI) for construction came in below forecasts – as did the equivalent survey for manufacturing yesterday – although growth was still healthy. Tomorrow sees the release of service sector figures for December, which will be closely watched for signs of the health of consumer spending.
European equities were boosted by a drop in the euro against the dollar in morning trading, with the continent’s largest exchanges modestly higher approaching midday. German unemployment figures fell much more than expected in December, but the jobless rate remained the same at 5.5%.
North America
The US manufacturing PMI was released on Tuesday, in line with other global releases, but traders will also be able to digest more manufacturing numbers with the release of the ISM survey today. Also of note are the minutes of the Federal Reserve meeting from December, which saw the Fed raise rates by 0.25%. Mortgage applications up to December 29 and construction spending for November will also be in focus.
The corporate earnings calendar is light this week but Monsanto (MON) is one of the biggest names to report.