The United Kingdom
The FTSE 100 Index started this week on a stable note and declined sharply on Tuesday to three-week low price levels amid the dented market sentiment. However, the FTSE 100 Index started to recover and closed higher on Wednesday. Carrying forward the strength, the FTSE 100 Index opened higher on May 31. The index was consolidating above opening prices in the morning session.
The FTSE 100 Index declined on Tuesday amid increased political uncertainty in Italy and Spain. The chances of re-elections in Italy as early as July along with the possibility of dominance by Euroskeptic political powers dented the market sentiment and pushed the market lower. However, the FTSE 100 Index started to recover on Wednesday amid a strong rally in the energy sector and the recovery in crude oil prices. On Thursday, the FTSE 100 Index is trading with strength following a rebound in US and Asian markets and the improved global risk appetite as Italian political fears faded.
At 4:45 AM EST, the FTSE 100 Index was trading at 7,710.99 with a gain of 0.28%. The iShares MSCI United Kingdom (EWU) gained 1.6% to $36.16 on Wednesday.
After declining for the first two trading days, Germany’s DAX 30 Index recovered some of the losses on Wednesday and opened higher on May 31. The release of strong economic data and strength in energy stocks supported the DAX 30 Index on Wednesday. According to the Federal Statistical Office Germany, Germany’s consumer price index grew 0.5% in May, which is better than the expected growth of 0.3%. In the morning session on Thursday, the DAX 30 Index was stable amid the improved risk appetite in European markets. Italy’s renewed efforts to form a government supported the markets.
At 4:50 AM EST, the DAX 30 Index was trading at 12,755.28—a drop of 0.21%. The iShares MSCI Germany (EWG) gained 2.3% on Wednesday.
Unlike the FTSE 100 Index and the DAX 30 Index, France’s CAC 40 Index closed lower on Wednesday amid the release of weaker-than-expected economic data. According to INSEE, France’s consumer spending declined 1.5% in April, while the market expected 0.2% growth. According to the National Institute for Statistics and Economic Studies, France’s GDP recorded quarterly growth of 0.2%—below the expected growth of 0.3%. In the early hours on Thursday, the CAC 40 Index was trading with stability amid improved sentiment in European markets as fears about Italy’s political situation subsided.
At 5:00 AM EST on May 31, the CAC 40 Index was trading at 5,446.71—a gain of 0.35%. The iShares MSCI France (EWQ) gained 1.8% on Wednesday.
Next, we’ll discuss how Asian markets performed on May 31.