Market commentary: Winning sessions resume

Asian shares opened sharply higher on Wednesday following earlier gains in the US.. European stocks finished higher for a fifth straight session, drawing support from financials and miners. Meanwhile, Wall Street edged slightly lower on Wednesday as oil prices slipped and utility stocks struggled. A day earlier, stocks made their biggest gains in more than a month.

Among the winners of the day were volatile mining shares. Copper producers enjoyed a positive day, as copper futures rallied 2.6 cents to a three-month peak of $2.172 a pound amid easing concerns over the health of the global economy. Silver, also, did well on Wednesday, and gold futures reversed early losses to end the day in the green.

Teen apparel retailer Abercrombie and Fitch posted a surprise rise in sales during the holiday-shopping quarter thanks to strong demand for its Hollister-branded clothing. The retailer’s results showed its efforts to revive sales growth by revamping merchandise and improving shoppers’ in-store experience were paying off, and sent its shares up almost 9% to $31.96 in premarket trading.

New stimulus from the ECB?

Investors will be eagerly waiting for what the European Central Bank has to say next week on whether it has decided to increase its stimulus efforts for the Eurozone. ECB President Mario Draghi, in a letter to European lawmakers, said the central bank will review its policies at its meeting on Thursday since it faces downside risks for the economy and its inflation expectations.

Bank of France Governor Francois Villeroy de Galhau put many minds at rest on Wednesday after saying that the ECB is ready to roll out new stimulus measures to boost worryingly low inflation in the Eurozone. Some tools he mentioned include targeted loans to commercial banks, more asset purchases as well as providing more detail about how long the ECB might keep interest rates at low levels.

The ECB has set the interest rate for banks to park money at the central bank at negative levels and is in the middle of buying hundreds of billions of euros of assets to boost prices. Yet inflation remains stubbornly low, and has recently dipped into negative territory, pulled down by falling energy prices.

Mr Villeroy de Galhau, a member of the ECB's governing council, said the brief period of negative inflation does not herald the arrival of a more long-lasting period of falling prices. In his statement, he says inflation should become positive again later on in the year as the oil price stabilises.

Meanwhile in the US…

Investors are weighing results from Super Tuesday, after Republican Donald Trump and Democrat Hillary Clinton both took big steps towards securing their party’s presidential nomination, with a series of state-by-state victories. Trump, 69, and Clinton, 68, proved themselves the undisputed front-runners to battle it out to find a successor for Democratic President Barack Obama.

The battle to seek their respective party’s nomination is not over yet, but once they secure that nomination they will be under pressure to show they can unify voters in their respective parties before facing off in the election on November 8.

This article was issued by Rebecca Naudi, Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt .The information, views and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.