The iShares MSCI United Kingdom ETF (EWU) rose by 1.95% on September 2. The top three performers in the UK stock market on September 2 were Carnival (CUK), BHP Billiton (BHP), and Arms Holdings (ARMH). The stocks returned 3.41%, 3.24%, and 3.23%, respectively, on Wednesday. The material sector, which was adversely affected yesterday by China’s manufacturing activity report, seemed to shrug off the news, as it rebounded on September 2. Thus, we saw a rise in BHP for the day.
The graph below shows EWU’s movement for the past week. The EWU ETF fell miserably on September 1, but stayed steady on Wednesday, September 3.
Arms Holdings (ARMH) has a short-term “hold” rating from Zack’s analysts. The stock has also received 20 “buy” ratings, three “sell” ratings, and six “hold” ratings from analysts. The upgraded rating contributed to the rise in the stock price.
Smith & Nephew (SNN) returned 1.93% on September 2. The medical appliances and equipment company’s stock was rated “outperform” by Bernstein analysts. 11 analysts recommend a “buy,” one recommends a “sell,” while eight recommended a “hold.”
The UK stock market on September 1 strongly reflected the adverse effects of the slowdown in the manufacturing activity of China. The slump in the world’s largest emerging market is affecting its trading countries. The United Kingdom is quite exposed to the Chinese economy through trade. It has strong trade relations with the other European countries too. Countries like Germany and France have significant exposure to the Chinese economy. Thus, any negative data from China alarms the Eurozone and the UK stock market.
In the next article, we’ll look at the other sectors of the EWU.