Ninth Quarterly Gain in S&P 500 Index, European Markets Lead Global Rally

Nichole Harper
31 Mar, 2015
New York City

World markets extended quarterly gains on the earnings optimism in the U.S., monetary support in the euro zone, Japan and China. S&P 500 index extended gains for the ninth quarter in a row. Oil fell as the U.S. led coalition inch closer to a deal with Iran on nuclear talks.

[R]1:20 PM New York – World markets extended quarterly gains on the earnings optimism in the U.S., monetary support in the euro zone, Japan and China. S&P 500 index extended gains for the ninth quarter in a row. Oil fell as the U.S. led coalition inch closer to a deal with Iran on nuclear talks.[/R]

Stocks on Wall Street searched for direction as the quarter drew to close and European markets reported strong returns in the first-quarter.

S&P 500 and other indexes are on the modest decline but the benchmark index is set to increase for the ninth quarter in a row.

On Wall Street trading, Tollbooth Strategy Index slid 0.05% or 4.93 to 10,518.48.

S&P 500 index fell 6.17 or 0.3% to 2,080.15 and the Nasdaq Composite Index slid 16.71 or 0.3% to 4,930.51.

Markets in Europe also surged and U.S. investors piled into European equities after the announcement of the monetary stimulus by the European Central Bank.

For the month of March, FTSE 100 index in London dropped 2.2% while in Frankfurt the DAX index soared 4.9% and in Paris the CAC 40 index jumped 2.5%.

In the first-quarter of 2015, FTSE 100 climbed 3.6% and the DAX index surged 22% and the CAC 40 index soared 18.6%.

In Asia, Nikkei in Japan soared 10% and Hang Seng in Hong Kong gained 5.5%.

The Sensex in India extended its run of last three years and jumped 1.7% in the quarter as the newly elected government of Narendra Modi begin to implement long range financial reforms and improve coordination between the Reserve Bank and ministry of finance.

Oil struggled as the U.S. led European coalition inches closer to finalizing a deal on nuclear talks with Iran.

After the talks, more oil supply is likely to flow to international markets and depress already weak oil prices.

Crude oil in New York trading slipped 81 cents to $47.87 a barrel and gold gained $1.80 to $1,186.60 an ounce.

U.S. Movers

Charter Communications, Inc ((CHTR)) soared 7.2% or $13.26 to $196.65 after the cable services provider agreed to acquire, smaller Florida-based rival, Bright House Networks LLC, digital cable television, video-on-demand services provider in a cash-and-stock deal valued at $10.4 billion.

CBRE Group Inc jumped 4.8% or $1.75 to $38.16 after the real estate services provider agreed to buy Johnson Controls Inc’s global workplace solutions business for about $1.48 billion in cash.

The company and Johnson Controls also announced a 10-year strategic relationship where CBRE will provide Johnson Controls with a suite of integrated corporate real estate services.

The transaction is expected to close in the late third quarter or early fourth quarter.

Endurance Specialty Holdings Ltd declined 4.5% or $2.92 to $61.38 after the Bermuda-based property and casualty insurance company agreed to acquire Montpelier Re Holdings Ltd for about $1.83 billion in cash and stock to expand its reinsurance business.

The offer price is valued at $40.24 per share based on closing price on March 30 and the deal consist $450 million in cash and 21.5 million Endurance ordinary shares that valued for about $1.4 billion.

European Markets

In London trading, FTSE 100 index declined 1.4% or 99.22 to 6,792.21 and in Frankfurt the DAX index dropped 0.8% or 92.08 to 11,993.93.

In Paris, CAC 40 index slumped 0.8% or 39.83 to 5,043.69.

For the March month, FTSE 100 index in London dropped 2.2% while the DAX index in Frankfurt soared 4.9% and CAC 40 index in Paris jumped 2.5%.

For the first-quarter of 2015, FTSE 100 in London climbed 3.6% but the DAX index in Frankfurt surged 22% and CAC 40 index in Paris soared 18.6%.

Bertelsmann SE & Co KGaA, the Germany-based entertainment network services provider said revenues in the year ending in December climbed 3.1% to €16.67 billion from €16.18 billion in a year ago period.

Profit in the year declined 19.3% from a year ago to €1.60 billion compared to €1.99 billion and diluted earnings per share dropped to 24.2 pence from 29.7 pence.

Revenues from RTL group fell 0.3% to €5.8 billion while revenues form Penguin Random House segment surged 25.2% to €3.3 billion from a year ago period.

Revenues from Gruner + Jahr business plunged 13.3% to €1.7 billion and revenues from Arvato segment climbed 6.2% to €4.7 billion.

Kingfisher Plc climbed 5.5% to 384.70 pence after the U.K.-based home improvement retailer reported sales in the year ending in January dropped 1.4% to £10.97 billion from £11.13 billion in a year ago period.

Profit in the year plunged 19.3% from a year ago to £573 million compared to £710 million and diluted earnings per share dropped to 24.2 pence from 29.7 pence.

The retailer sustained its plans to acquire 41.9% stake in franchisees of Mr Bricolage after the agreement made provision that it would lapse if the anti-trust clearance was not obtained by March 31.

Yoox SpA surged 11.4% to €25.80 after the Italy-based online multi-brand clothing and accessories retailer agreed to acquire Cie. Financiere Richemont SA’s Net-a-Porter business in an all-stock deal worth about €719 million.

Asian Markets

On the final day of the quarter, investors in Japan sold positions to adjust portfolio allocation and the weak auto production report weighed on the market sentiment. Passenger car production declined for the eighth month in a row in February.

Stocks in Tokyo struggled and the Nikkei index declined more than 1% after the latest automobile production report.

The passenger car production declined for the eighth month in a row and the expectations of weak economic growth resurfaced after the report.

Automobile production in February declined 5.3% to 817,390 units compared to 863,452 units a year ago month. Motorcycle production in February plunged 11.2% to 50,079 units from 56,423 units for the same month a year ago, the Japan Automobile Manufacturers Association said today.

Production of passenger cars declined 6.7% to 692,071 units, eighth monthly decrease in a row. Total production of trucks in the month climbed 3.4% to 113,807 units from a year ago month.

On the sales front, passenger cars sales in February plummeted 15.8% to 413,192 units and trucks sales dropped 7.7% to 67,920 units.

Domestic demand in the month plunged 14.7% to 482,103 units.

The department added automobile export in the month fell 0.3% to 365,855 units compared to 366,779 units a year ago period. Export of passenger cars fell 0.3% to 313,100 units and truck export declined 3.6% to 41,414 units.

The Nikkei 225 Stock Average declined 204.41 or 1.1% to 19,206.99 and the broader Topix index dropped 14.66 to 1,543.11.

For the month of March, Nikkei 225 climbed 2.1% and for the first-quarter of 2015 the index surged 10.1%.

The yen weakened to 119.99 against a dollar.

Sensex in India held its ground in volatile trading and rupee edged up higher but flirted near the low of the year.

Rupee gained 17 paisa 62.50 against one dollar.

The Sensex Index fell 18.37 to close at 27,957.49. The CNX Nifty slid 1.30 to 8,491.

For the month, Sensex Index and CNX Nifty declined 5.7% and in the first quarter of 2015, the Sensex jumped 1.5% and CNX Nifty climbed 2.5%.

Ashok Leyland Limited fell 0.6% to ₹73.55 and the commercial vehicles maker said it has sold its Czech subsidiary for nearly $11 million.

The anchor company of the Hinduja Group has been selling assets to raise cash, restructure business, and pay down debt.

Ashok Leyland had acquired Avia Group for $35 million in 2010 to accelerate its expansion in Europe and access certain production technology, however the loss making subsidiary failed to live up to its expectations.

Ashok Leyland also lowered its stake in its wind energy subsidiary to 11.5% from 48.5%.

The vehicle maker said it has reached ahead of schedule its target of reducing debt-to-equity ratio to 1:1 and plans to lower the ratio to 0.5:1 in the next three-to-five years.

The debt ridden company has lowered its debt to ₹4,200 crore from the peak of ₹6,000 crore in 2013.

Larsen & Toubro Limited slid 0.5% to ₹1,719 after the engineering infrastructure maker received contract for about ₹1,432 crore from the Ministry of Defence.