Market commentary: Germany leads markets lower

After a bright start to the week, shares worldwide suffered a loss on Tuesday. Wall Street traded in the red, echoing the vibe in Europe and Asia. Shares were led lower by German stocks due to an unexpected plunge in Europe’s biggest economy. German industrial orders tumbled due to weaker foreign demand, suggesting that a slowdown in the global economy is leaving its mark. The weakness was related to the manufacturing sector, which reportedly fell 1.2% in February, thereby missing estimates of a small gain.

Exporters and other globally-exposed stocks were hit across the region, with the automobile industry and mining stocks also trading lower on Tuesday.

In the automobile industry, Peugeot would have expected to have a good day on Tuesday, after the company presented a new five-year strategic plan. However, the French carmaker saw its shares trade 6% lower as investors were left disappointed with the new proposals. Staying in the industry, BMW and Toyota were also trading lower, after falling 3.62% and 2.125%, respectively.

Major stock markets have struggled to log gains for 2016 so far, partly due to a continued slide in oil prices. Slumping oil prices were also a concern on Tuesday, as crude oil traded lower, moving towards $35 a barrel. Brent also fell slightly to end the day at $37.74. The losses in oil prices deepened on mounting scepticism that major oil producers will reach an agreement to freeze production at a highly anticipated meeting in Doha on 17 April.

Shares of major oil companies likewise took a hit. Commodity firms found themselves under selling pressure, resulting in Royal Dutch Shell loosing 2% in Tuesday’s session, and BP plc also suffered the same fate, losing 2.1%. Other commodity companies were also reporting losses. Shares in mining giants BHP Billiton gave up 2.35%, and Rio Tinto retreated 1.4%.

Among other movers on Tuesday were entertainment and media giant Disney. Shares were subject to selling pressure after the company said that Chief Operations Officer Thomas Staggs – the heir to the Disney throne – will be leaving the company next month. This news leaves the media giant frantically searching a replacement to fill the role of Chairman and CEO Bob Iger, throwing Disney’s succession plans into confusion.

Meanwhile, it was a good day in the pharmaceuticals industry as Canadian drug maker, Valeant, enjoyed gains of over 8%. This came after the company announced it will file its annual report on time, and this report will be in compliance with all financial covenants in its credit facility. Valeant’s accounting practices were under review by a board committee, though it has reported that nothing alarming was found.

In other news, the US National Football League said it has chosen Twitter as its exclusive global partner for streaming its Thursday night games during the 2016 regular season. Twitter, whose shares rose around 1% in early trading, will stream 10 games for free, according to a statement by the NFL. The deal also includes game highlights and pre-game broadcasts from players and teams.

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.