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Global Stock Jump on Possible Ukraine Ceasefire

David Becker
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Global Stock Jump on Possible Ukraine Ceasefire

Global stocks jumped on Wednesday as news of a possible ceasefire in Ukraine has given a big boost to equity bourses. Nowhere is that more evident than in Russia. The Market Vectors Russia ETF (RSX) jumped more than 5%. The Russian ETF needs to clear its mid-August peak at 25.45 to turn its short-term trend higher. That would put it above its 200-day moving average line as well. Russian tensions have taken a heavy toll on Eurozone stocks, especially Germany. Stronger Russian stocks are translating into stronger European stocks as well.

The Dow Jones Germany Stock Index climbed more than 1% and trying to climb back over its 200-day line. The Dow Jones France Stock Index) has already cleared this milestone. While today’s geopolitical bounce is encouraging, the eurozone still has to deal with an economic slowdown and the threat of deflation. Today’s announcement by the ECB on monetary policy will also have a big influence on the direction of Eurozone stocks. An ECB announcement of some form of quantitative easing could give stocks an added bounce.

The Russian rebound is also giving a boost to emerging market stocks. So are rallies in the three other big emerging market countries that are Brazil, China, and India. Of those three, India has been the strongest. The Wisdom Tree India ETF (EPI) trading at a three year high and up 34% this year. China iShares (FXI) jumped to a three year high Wednesday and up 11% for the year. The EEM rally is being led by upside breakouts in three of its biggest components. The fact that the EEM 2014 gain is a smaller 9.9% is due to a -13% drop in Russian stocks. The EEM has also outpaced 2014 gains in the U.S. and foreign developed stocks.

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