ETF Trading Report: Regional, Spanish ETFs In Focus - ETF News And Commentary
09 Maggio 2012 - 7:13PM
Zacks
U.S. stock markets again finished the day in the red as more
European woes plagued the markets. Today, the focus was on Spain
and its troubled banking sector as there were rumors of a bank
nationalization in the country. This factor helped to push Spanish
10 Year Government bonds up above the key 6% yield mark, moving
shares lower on both sides of the Atlantic in the process.
Overall, the Nasdaq slumped by about 0.4% on the day while the
Dow and S&P 500 both retreated by about 0.7% in comparison.
Losses were pretty bad throughout, with consumers, materials, and
financials leading the way on the downside. However, some strength
was seen in a few big tech names, retail staples, and utilities in
Wednesday trading.
Thanks to this weakness, the dollar was a popular safe haven
investment in the session, as the U.S. dollar index rose above the
$80 mark as the euro fell below the $1.30 level to close the day.
Despite this, Treasury bonds didn’t see a huge move in the session,
as most levels of the curve saw rates that were unchanged from the
previous trading day (read Real Estate ETFs: Unexpected Safe
Haven).
Still, commodity markets were weak in Wednesday trading although
most energy products continued to rally. Softs were mixed with many
products adding marginally, although wheat and corn dragged down
the space with 2.5% losses each. Beyond these corners, metals were
weak as gold fell below the $1,600/oz. mark, finishing the day
below $1,590 per ounce.
In ETF trading, volume was again heavy across the board, as all
of the major products saw more shares change hands than normal.
Once again, commodity and foreign markets experienced solid days,
with those most impacted by the euro zone crisis staying in the
limelight in Wednesday’s session.
In particular, it was another heavy volume day for the
iShares MSCI Spain Index Fund (EWP) as the
country’s troubled economy was again in focus. The product usually
sees volume of about 216,000 shares a day but saw a spike just over
the one million share market for Wednesday’s session (read Pain In
The Spain ETF Continues).
In terms of volume dispersion, the vast majority of trading came
within the first hour, including two 75,000+ blocks in the first
half hour. Clearly, the fund was in focus after the nationalization
plan for one of the country’s banks and ongoing speculation
regarding the fiscal health of the country. Additionally, the 4%
move to the downside also ensured that the product would be a heavy
trader during Wednesday’s session.
Another ETF that saw a massive volume spike was the
RevenueShares ADR Fund (RTR) which is usually not
in focus due to its low market cap of $37 million. Nevertheless,
the product saw a nearly tenfold increase in volume during
Wednesday trading with more than 43,000 shares changing hands
during the session.
The product declined by about 0.7% on the day and was likely in
focus due to both its sector breakdown, and the fund’s regional
exposure. The product puts 20% in financials, and 36% in energy,
two sectors that were especially impacted by today’s events (see
Are Investors Abandoning Brazil ETFs?).
Beyond this, the product is also heavily tilted towards Europe
as more than half of the portfolio goes to the troubled region.
Overall, two of the top four countries represented are European
ones, while 6 of the top ten come from the area. Clearly, this
heavy European exposure was also another reason for why this
product saw a surge in interest during Wednesday’s session.
(see more on ETF trading at the Zacks ETF
Center)
To read this article on Zacks.com click here.
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