Out of the 109 constituent stocks of the iShares MSCI United Kingdom ETF (EWU), 104 stocks rose on September 3. The mining stock Glencore (GLEN) was the top gainer for the day, returning 6.64%. Glencore shares rose with the rally in the mining and basic material stocks. The key driver was the rebound in the commodities prices. Along with GLEN, the day saw a rise in the stock values of Anglo American (AAL), Royal Dutch Shell (RDS.B), Vodafone Group (VOD), and Johnson Matthey (JMAT). These stocks rose by 6.03%, 4.27%, 3.29%, and 1.44%, respectively.
The graph below shows the movement of BHP Billiton (BHP) for the past week. The stock rose subtly starting September 1 and rallied on September 3.
The UK markets had been very volatile since September 1.
The stocks at the bottom on September 3 were Weir Group (WEIR), RSA Insurance (RSA), and GKN (GKN). WEIR, belonging to the industrial sector, yielded -1.12%; RSA, belonging to financial services sector, yielded -0.20%; and GKN, from the industrial sector, returned -0.11% on September 3.
The UK market experienced a stock rally on Thursday, September 3, over a comment of the European Central Bank’s, or ECB, Chief Mario Draghi. Mr. Draghi commented on the “ECB’s asset buying program to be implemented completely” in a news conference at the ECB’s headquarters in Frankfurt.The assurance from the ECB chief served to boost the confidence of UK investors, and we saw all the component sectors of EWU in the green territory on Thursday, September 3.
Let’s analyze what the comment meant for investors in the US and the UK markets.