EWU lost 1.75%
The UK stock market’s volatility was aggravated on Friday, September 18, when the iShares MSCI United Kingdom ETF (EWU) tripped by 1.75%. The trailing five-day return of the EWU was -0.41%. The iShares MSCI United Kingdom ETF (EWU) and the SPDR S&P 500 ETF (SPY) are almost in tandem to each other, as illustrated by the graph below.
China’s stock market turmoil and its economic slowdown have implications over both the US and the UK stock market. The stock markets responded to the global economic panic sometimes misaligned from the domestic economic indicators.
The Federal Reserve’s decision to keep rates unchanged due to the concerns of global turmoil seemed to deepen the panic among stock market investors. And thus, we saw both the US and the UK markets go red on Friday, September 18. Both markets are mature markets that are seen more as safe-haven areas when compared with emerging markets such as China or Brazil.
Stocks at the top and bottom
The stocks at the top of the EWU list were Celsus Therapeutics (CLTX), KNOT Offshore Partners (KNOP), and AstraZeneca (AZN) that returned 83.02%, 3.58%, and 1.66%, respectively, on September 18. The company is expected to report growth in earnings for the current quarter. AZN was upgraded from “neutral” to “buy” by the brokerage firm Bryan Garnier on Friday, September 18, 2015. The stock traded 3.6 million shares on the day and even crossed its 200-day simple moving average.
The stocks at the bottom were MAM Software Group (MAMS), Noble Corporation (NE), and Ensco (ESV). These stocks yielded -11.14%, -10.67%, and -8.48%, respectively, on September 18. NE and ESV, from the oil and gas drilling and exploration industry, fell with the lowered oil prices in the presence of excess oil supply. The speculation for the energy stocks has increased due to the global economic concerns and hence the fall in oil-related stocks.
The UK stock market also experienced a fall in consumer staples like Unilever (UL), Diageo (DEO), Fiat Chrysler (FCAU), and Michael Kors Holdings (KORS). The financial sector also went down steeply. To get an overview of the recent economic condition in the US and the UK, please visit our series on economic indicators, Key Indicators Released on September 16.