Stocks end worst quarter in four years on upbeat note

1 Oct 2015 | Author: | No comments yet »

For Global Equities Markets, Worst Quarter in Years.

NEW YORK — The dollar gained and global equity markets rallied on Wednesday, adding an upbeat note to an otherwise dismal third quarter on hope the commodities rout has run its course.Markets were up in early trading and shares in Glencore rose again by six percent – two days after the mining giant plunged on the back of sliding commodity prices.

Major equity indexes around the world declined more than 10 per cent from July through September, pulled down by fears of a global slowdown brought on by China, which also took its toll on commodity prices and countries that depend on their export. European stocks turned in their worst quarter since the depths of the eurozone debt crisis four years ago, when regional indices such as the blue-chip Euro STOXX 50 index slid 23.5 per cent in the third quarter of 2011. Still, analysts questioned the strength of the equity market’s rally, which was helped by a Chinese tax cut on small cars aimed at reviving sales in the world’s biggest auto market.

Rick Meckler, president of hedge fund LibertyView Capital Management LLC in Jersey City, New Jersey, said some people bought on the notion that the recent sell-off is over. A temporary calm in September was shattered after the Federal Reserve surprised markets by holding rates at zero, citing the very financial conditions that were hammering equities. The Nasdaq biotech index, which had skidded 13.5 per cent over the past five days, rose 3.2 per cent on Wednesday even as it posted a 19.8 loss for the quarter. Shares in mining and trading firm Glencore, which plummeted on Monday along with commodity prices, jumped 14.1 per cent after it sought to reassure investors over its debt. The dollar got a lift from American private-sector jobs data, which bolstered bets a hike in U.S. interest rates will come in 2015, while the euro fell back on a report eurozone inflation had turned negative.

Citi’s Tobias Levkovich expects the index to close the year at 2200 – up about 16% from here. “There will be many who will argue that this is the start of the next bull market,” said Dennis Gartman of the Gartman Letter, “that the worst is now behind us and that the global nearly 20% decline from the highs is sufficiently deep to have discounted all of the ill economic news that bear markets must do. “We are of the opinion that the worst is not yet behind us; that a mere less-than-handful of months from the highs is insufficient as far as ‘time’ is concerned for a bear market to have run its course and that new lows still lie ahead. We shall consider each and every rally then to be interim and corrective in nature.” The Dow Jones Industrial Average was down 1334.81 points, or 7.58%, to 16284.70. The dollar index, a basket of major trading partner currencies, rose 0.44 per cent for the day and was on track for a 0.7 per cent gain for the three months ending Wednesday. U.S. government debt fell, but the market was limited as traders refrained from making major bets ahead of Friday’s U.S. non-farm payrolls report for September, which may influence the Fed’s timeline for hiking interest rates. Oil prices were mixed in volatile trade, with global benchmark Brent up on worries about Russian airstrikes in Syria but U.S. crude down after data showed a surge in domestic inventories.

The Thomson Reuters Jefferies CRB Index of 19 commodity prices pared gains to post a 0.06 per cent rise, as the fall of U.S. crude weighed on the index.

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