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Market Update

Weak U.S. Holiday Sales, Oil Plunge Wreaks Havoc in Russia, Mid-East Markets


Author: Nichole Harper
ticker.com
Last Update: 12:52 PM ET December 01 2014

12:50 PM New York – The plunge in crude oil price travelled around the global financial markets as the decline in oil price continued and wreaked havoc in financial asset prices of oil producing nations. U.S. holiday shopping over the weekend was sharply lower than a year ago.

Stocks on Wall Street edged lower and investors focused on the beginning of holiday sales in the U.S. and weaker than anticipated Chinese manufacturing growth data.

So called Black Friday sales in the U.S. over the weekend surprised many market watchers after the retail industry association reported sales plunged 11% in the weekend from a year ago.

Retail and consumer technology related stocks declined in New York trading.

Official and a private survey of manufacturing industry in China suggested that the growth in the sector is declining.

The two surveys released over the weekend and today showed that manufacturing sector driven by exports is struggling to hold the growth rate among medium and smaller companies.

The ongoing decline in oil price travelled around the global markets and market indexes in Australia, Japan, Middle East and Europe were impacted by the dramatic fall.

Russian ruble dropped more than 6% in Monday’s trading and currencies in Iran, Venezuela, Nigeria and Australia weakened.

Russian ruble has dropped 40% in the year so far and traded as low as 54 before recovering to close at 52 against the U.S. dollar. Ruble is the second-worst performing currency in the world.

Russia’s central bank also intervened in the market and also announced measures to create a free-float in the ruble linked to oil price. Crude oil is 68% of Russia’s exports and oil revenues are about 50% of federal government revenues.

Iran’s currency has plunged more than 80% in the year so far and Nigerian Naira has lost 2.5% and declined to a record low of 183.05 against one dollar.

On Wall Street trading, Tollbooth Index slipped 0.8% or 82.42 to 9,983.34.

S&P 500 index slipped 14.31 or 0.7% to 2,053.24 and the Nasdaq Composite Index dropped 59.85 or 1.2% to 4,732.34.


U.S. Movers

Avolon Holdings, the Ireland-based aircraft leasing company launched an initial public offering valued at up to $1.86 billion. Trading will starts in to the next two weeks.

The company forecasted the sale of existing stock to be priced between $21 per share and $23 per share.

Cott Corporation (COT) dropped 2.1% or 14 cents to $6.41 after the beverages maker’s subsidiary plans to issue convertible bonds due in 2019 for aggregate principal amount of $615 million.

European Markets

In London trading, FTSE 100 index slumped 0.8% or 56.60 to 6,666.02 and in Frankfurt the DAX index fell 0.2% or 25.31 to 9,955.54.

In Paris, CAC 40 index slid 0.3% or 12.59 to 4,377.59.

In the European corporate news, Altice agreed to acquire Portugal Telecom SGPS S.A. from Brazilian wireless carrier Oi S.A. for €7.4 billion. E.ON plans to split into two companies. Balfour Beatty received £1 billion non-binding proposal from John Laing Infrastructure Fund. Vodafone plans to acquire Blinkbox.

Altice SA surged 6.2% to €57.45 after the France-based pay television and broadband internet service provider agreed to acquire Portugal Telecom SGPS S.A. from Brazilian wireless carrier Oi S.A. for €7.4 billion or $9.2 billion.

The transaction is expected to close before the end of this month.

E.ON SE jumped 3.7% to €14.79 after the Germany-based energy solution provider plans to split into two companies to focus on renewable, distribution networks while new company will focus on energy production and trading businesses.

Balfour Beatty Plc climbed 4.4% to 191.40 pence after John Laing Infrastructure Fund confirmed a non-binding proposal to the U.K.-based infrastructure developer for about £1 billion.

The company said the board will review the proposal and the company is open to “value creation opportunities” for shareholders.

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc