European shares moved in tandem with global markets

U.S.

Most of the major benchmarks closed higher after previous week’s sharp gains. Joe Biden´s winning of the presidential election last weekend and Pfizer´s positive vaccine news on Monday propelled the markets higher after markets opened. All major indexes touched all-time intraday highs, but gave back much of the gains by the end of the trading day. The Dow Jones Industrial Average and the smaller-cap benchmarks performed best and stayed in green territory during the week, the DJI gained 4.08%. The technology-heavy Nasdaq Composite Index could not keep its gains and finished the week -0.55%. The S&P 500 Index rose 2.15% by the end of the week. Energy shares recorded solid gains as oil prices had a rally and closed the week in the green.

EU

European shares moved in tandem with global markets on encouraging news regarding the development of a vaccine to fight the coronavirus. The pan-European STOXX Europe 600 Index ended the week 5.13% higher. Germany’s DAX Index climbed 4.78%, France’s CAC 40 surged 7.45%, and Italy’s FTSE MIB added 6.21%. The UK’s FTSE 100 Index rose 6.88%.

ECB President Christine Lagarde said that the central bank would expand its pandemic emergency purchase program, which has bought more than EUR 640 billion of bonds. Further reduction in the ECB’s deposit rate, currently at -0.5%, is very unlikely.

The UK´s Gross domestic product (GDP) rebounded 15.5% in the third quarter and September´s  month-over-month data showed slower-than-expected 1.1% growth.

Japan

Japanese equities performed strongly last week. The Nikkei 225 Stock Average advanced 4.4% (1,061 points) and closed at 25,385.87. The large-cap TOPIX Index and the TOPIX Small Index, broader measures of Japanese stock market performance, also recorded positive returns. The yen weakened and traded near JPY 105 versus the U.S. dollar.

Around one-third of the listed Japanese companies with fiscal years ending in March have increased their forecasts for full-year earnings. However, the full-year net profit forecast is expected to be about one-third lower than in fiscal year 2019. Most of these companies are manufacturers, helped by China´s strong recovery.

China

Shares in China declined slightly for the week: The Shanghai Composite Index lost 0.1%, while the large-cap CSI Index ended down 0.6%. China’s bond market attracted less foreign investment in October following an especially strong third quarter, which recorded inflows of USD 21 billion for each month. The renminbi stayed unchanged and ended at 6.610 against the U.S. dollar.

US President Trump announced an executive order on Thursday prohibiting Americans from investing in Chinese firms that have ties to the country’s military. Companies such as China Mobile and China Telecom saw their U.S.-listed shares falling sharply on Friday.