Charting the Markets: One Week On, French Equities Defy Terror
Europe's worst terror attack in more than a decade hasn't deterred equity investors this week, with France's CAC 40 Index rising as much as 2.5 percent. Fewer than 10 stocks have fallen, among them Accor, Europe's biggest hotel operator, which dropped 4.7 percent on Monday on concern about tourist flows. Since then it's clawed back more than half of those losses. The CAC 40 Index remains one of Western Europe's best performing equity indexes this year. Only Denmark, Ireland, Italy and Austria have fared better.
Global stocks are little changed yet the MSCI All Country World Index is on track for its best week in six. Investors have a new-found belief the path of U.S. interest rate increases will be gradual even if the Federal Reserve embarks on tighter monetary policy next month for the first time in nine years. The MSCI Asia Pacific Index has risen 1.6 percent this week, while the MSCI Emerging Markets Index has jumped 2.4 percent. Goldman Sachs says emerging markets are about to turn the corner after three years of disappointment.
Emerging market currencies are set for their first weekly gain in five. The JPMorgan Emerging Market Currency Index has risen 0.5 percent over the past five days, the most since Oct. 9. This week some of the year's worst-performing emerging market currencies have rallied against the dollar. The Brazilian real has risen 3.5 percent, having dropped 28 percent in 2015. The South African rand has jumped 3 percent after falling 17 percent this year. Goldman Sachs says the biggest risk to emerging markets is a "significant depreciation" of the yuan. The JPMorgan Emerging Market Currency Index has slid 13 percent in 2015.
This year's worst performing metal on the London Metal Exchange has now dropped to its lowest since July 2003. Nickel's slump is so severe that at least half of global production is now loss-making, according to PT Vale Indonesia. The commodity has fallen for five consecutive weeks, the longest losing run in over two months. In 2015 it has plunged 41 percent, the worst year since the financial crisis. Nickel isn't alone in its slump. The entire industrial metals space is being weighed down by a slowdown in China. A London Metal Exchange index of 6 industrial metals has dropped 25 percent this year.