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A day of two halves

Published Thursday, January 14th, 2016

The erratic start to the year for global risk assets shows little sign of abating and moves across financial and commodity markets are becoming increasingly characterised by contrasting morning and afternoon sessions. This “day of two halves” syndrome was explicitly highlighted yesterday when unexpectedly solid Chinese trade data pointing to the first rise in exports for six months initially saw Chinese mainland shares trade higher yesterday. The feel good factor from this rare bit of good news however quickly evaporated and China’s major bourses ended the day lower. These forces have been at work again overnight where the Shanghai Composite tumbled almost 3% on its way to a pre-August rout low before a late surge saw it end with a 2% gain, supported perhaps by the ‘national team’.

It was much the same elsewhere as European stock markets struggled to hold on to an early trading bounce despite investors brushing off downbeat eurozone industrial output and taking heart from news of Greece’s long awaited emergence from deflation. The rollercoaster ride was most prevalent in the US where equity gauges were at the mercy of a severe bout of oil price volatility. An encouraging start ultimately turned sour with Wall St shedding more than 2% and the S&P 500 falling into correction territory following a close below 1,900 points.

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Posted by Stephen Brennock

Stephen Brennock joined PVM in 2013 after having worked as a project manager for a business development firm. He graduated with a degree in Business Management in 2007.