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DAILY MARKET REVIEW: 31 DECEMBER 2014

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Daily Market Review on STOCK.com

DAILY MARKET REVIEW: 31 DECEMBER 2014

Dec 31 2014, 08.42am GMT

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STOCK.com   Indices

On Wednesday, the Chinese markets closed off the trading year on a high making 2014 their best year in the last 5 years. Elsewhere in Asia, markets treaded cautiously with investor worries regarding the future of Greece in the euro zone while investors also took profits. China came out as a top global equity performer and the CSI300 index, which consists of the largest listed companies in Shenzhen and Shanghai, closed 2014 with almost 50% gains. This marked the biggest index gain among all major markets worldwide. The increase in Chinese stocks has taken place over the last few months as their more aggressive stimulus policy has helped to boost its brokerages and banks in order to help counter the country’s economic slowdown. On Wednesday, the biggest gainers in China were train makers CSR Corporation and China CNR after these two companies confirmed a merger valued at $26 billion. In other areas in the region, trading was thin in South Korea, Thailand and Japan. For the year, the Japanese Nikkei index gained 7.1%. This climb came in response to a move by the Bank of Japan (BoJ) to buy assets which helped to push the Japanese yen (JPY) lower while boosting the profit margins of exporters. The poorest performer in Asia for 2014 was South Korea. For the year, the Kospi declined by 4.8%. The slide was prompted by investor fears that a declining Japanese yen would provide Japanese exporters with a competitive edge over its rivals in Asia. Today, markets in Hong Kong and Australia will trade for a half-day due to New Year’s Eve. Meanwhile, the markets in Thailand, Indonesia, Japan, South Korea and the Philippines will be closed.

STOCK.com   Currencies

As a result of year-end profit taking, the U.S. dollar (USD) traded lower against most major currencies on Tuesday in light trading volume. This decline also came after the U.S. released lower-than-expected U.S. consumer confidence data. In its report, the Conference Board stated that the CCI (consumer confidence index) rose from 91.0 in November to 92.6 in December. Analysts were hoping for a rise to 93.2 in December while November’s figure was revised for the estimated reading of only 88.7. Despite missing analyst’s expectations, the greenback remained supported by the positive GDP data from last week which increased 5.0% in the third quarter. As a result, investors now expect the Federal Reserve to hike interest rates in the New Year. Against the euro (EUR), the USD lost ground and the EUR/USD currency pair advanced 0.11% to 1.2168. Markets also remained cautious after Antonis Samaras, the Greek Prime Minister, announced on Monday that he would recommend that parliamentary elections will take place on the 25th of January. This means that these elections will take place almost a year and a half before Samaras’s coalition's term is due to end. To top it off, preliminary data released from Spain on Tuesday, showed that Spanish consumer price inflation (CPI) declined by 0.6% this month. This came after a downtick in November of 0.1%. In December, the year-on-year CPI dropped 1.1 percent. Analysts were expecting a fall of only 0.7% fall.

STOCK.com   Stocks

It’s that time of the year, the season of giving, and millions of people around the world were lucky enough to receive a new gadget under the Christmas tree. So you might be wondering which devices and apps were hot favorites this season? According to Flurry, Apple took center stage this festive season. Let’s take a step back – in 2007, Apple (AAPL) introduced the first iPhone and as a result, the mobile revolution began. Seven years later, in the week leading up to and including Christmas, Apple took first place. This tech giant accounted for over fifty one percent of all new device activations globally between the 19th and the 25th of December. In second place was Samsung with only 18 percent of activations while Microsoft followed in third place with only 5.8% of the market share thanks mainly to their Lumia devices. The remaining market share of new device activations over the holiday period is filled with names such as LG and Sony as well as HTC, Huawei and Xiaomi.

Let us put this into perspective for you. For each Microsoft Lumia device that was activated over the holiday period, Apple activated 8.8 devices while for every Samsung device activated over this period, Apple took first place activating 2.9 devices. Apps also had the opportunity to join in on the celebrations and according to Flurry, there were two and a half times more downloads of apps on Christmas Day in the United States compared to any other day during the December month. The most downloaded apps include messaging apps and games.

Phablets also made their mark over the Christmas holidays this year. Prior to Christmas, more that thirteen percent of new device activations were phablets. This is up from the 3 percent in 2013. It seems that larger screens are what consumers are looking for. So in a nutshell, the top device which was activated on Christmas was the iPhone 6 so now we have to wonder what Apple has in store for us for 2015. Apple is currently trading at $112.52 per share.

STOCK.com   Commodities

There were no surprises on Wednesday as Brent crude prices moved closer to $57 a barrel. This decline came in response to demand concerns as well as weak Chinese manufacturing data. For the 1st time in the last seven months, the factory sector in China shrank. The final HSBC & Markit Purchasing Managers' Index for December was at 49.6. While this reading was higher than the reading of 49.5 in November, it was still below the 50.0 mark which separates contraction from growth. It is important to note that China is the world’s 2nd largest consumer of oil in the world and if the factory sector in China is contracting, this could have a great impact on the demand for this commodity. After falling as low as $57.18 in early trading, Brent for February delivery traded at $57.46, down 44 cents. Elsewhere, as a result of increased U.S. crude inventories which rose by 760,000 barrels last week to 387.3 million, U.S. crude for February delivery was at $53.78, down 34 cents.

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