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FTSE 100 Leads the Gains in Global Markets

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Jun. 30 2016, Updated 1:07 p.m. ET

European markets post strong gains

On June 29, major European indexes were trading higher for the second straight day. Market jitters, caused by the United Kingdom’s referendum, slowly receded. The rise in European indexes was led by the United Kingdom’s index FTSE 100. It suffered the most since Brexit. The FTSE 100 rose by 3.6%. However, with the fundamentals still shaky due to uncertainties about the exit terms, we would hardly see a continued revival. Looking at the performance of United Kingdom-based indexes, the iShares MSCI United Kingdom ETF (EWU) rose by 2.6%.

Most of the European markets were trading on a positive bias. Similar positive sentiments were reflected in related ETFs. The Deutsche X-trackers MSCI EAFE Hedged Equity ETF (DBEF) and the Vanguard FTSE Developed Markets ETF (VEA) rose by 1.6% and 1.8%, respectively.

Among other major indexes, the SPDR Euro STOXX 50 ETF (FEZ), a Eurozone blue-chip stock index, rose by 2.7%.

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Asian markets are broadly positive

Critical Asian indexes (AAXJ) were trading on an upward trajectory on June 29, 2016. The Asian markets’ rise was led by the Indonesian IDX Composite and the Japanese Nikkei 225 index. They rose by 2.0% and 1.6%, respectively.

The Asian ETFs were also trading on a positive bias. The iShares MSCI All Country Asia ex Japan ETF (AAXJ) and the iShares MSCI China ETF (MCHI) rose by 1.8% and 1.9%, respectively.

US equities rise on strong domestic data

US equities were boosted by the strong data release in the previous two days. The GDP and inflation numbers came out above the forecast. We discussed the inflation release in Part 1 of the series. The rise was also partially due to the return of risk-averse investors. They were shorting the Market after the Brexit vote. Looking at the performance of the indexes on June 29, the S&P 500 VIX index continued to fall from the previous day. It fell by 11.4%. The S&P 500 (SPY) rose by 1.7% and the NASDAQ Composite (IXIC) rose by 1.9%. The Dow Jones Industrial Average rose by 1.6%.

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