Thursday, 31 May 2012

May 31, 2012 Financial Market Summary


DJIA slumped 1.3% to close at 12,419.9. NASDAQ shed 1.2% to settle at 2,837.4. S&P 500 tumbled 1.4% to end at 1,313.3.
Nikkei 225 index is trading 1.8% lower at 8,474.6.
FTSE 100 tumbled 1.7% to settle at 5,297.3.
FTSEurofirst 300 index fell 1.5% to end at 975.7.
In Asia, crude oil for July delivery is trading 0.2% or $0.18 lower at $87.64 per barrel.
At 0400 BST today, the GBP is trading marginally lower against the USD at $1.5476, marginally lower against the EUR at €1.2509, 0.3% lower against the JPY at ¥121.84.
US Market Snapshot
US markets fell sharply yesterday, erasing most of the previous session gains, on disappointing domestic housing data and as rising bond yields in Spain and Italy increased concern the debt crisis is spreading. Research In Motion slipped 7.8%, as it forecasted an unexpected operating loss for the fiscal first-quarter. Nabors Industries, Quicksilver Resources, Denbury Resources and Rowan tumbled between 3.9% and 6.2%, as oil prices fell to a 7-month low on weak demand prospects. Alcoa, FedEx and Chevron declined between 2.3% and 3.5%, amid concerns about the global economic outlook, while Caterpillar lost 2.5%, as it agreed to dispose a distribution-and-support business in South Africa and Botswana. Medical-device maker, Synergetics USA plunged 28.1%, as its preliminary third-quarter results trailed market expectations.
DJIA slumped 1.3% to close at 12,419.9. NASDAQ shed 1.2% to settle at 2,837.4. S&P 500 tumbled 1.4% to end at 1,313.3.
Asian Market Snapshot
Asian markets are trading lower this morning, taking cues from overnight losses on Wall Street, amid concerns about deteriorating situation in Europe and weak Japanese economic data. In Japan, Hitachi Construction Machinery and Komatsu lost values on a report that Japan’s industrial output rose less-than-expected. In Hong Kong, Agricultural Bank of China traded lower, on news that it’s Vice-President is under investigation by the Communist Party's discipline authorities. Retailer, Pou Sheng International paced decline after the company posted a loss for the six months ended in March. In South Korea, refiners, SK Innovation and S-Oil, paced lower, in line with a fall in crude oil prices.
Nikkei 225 index is trading 1.8% lower at 8,474.6. Hang Seng index is trading 1.2% lower at 18,471.8 while the Kospi index is trading 1.3% lower, at 1,820.9.
UK Market Snapshot
UK markets fell sharply yesterday, as a surge in benchmark yield at an auction of Italian debt and concerns about the viability of Spanish banks fuelled concerns of contagion in the euro area. Among miners, ENRC, the top decliner of the FTSE 100 index, tumbled 6.6%, while Antofagasta, Rio Tinto, Kazakhmys and Vedanta Resources declined between 3.9% and 5.4%, as base metal prices fell, after China dampened speculation for a massive stimulus to boost the country’s economic growth. Lloyds Banking Group and Royal Bank of Scotland dropped 2.3% and 3.0%, respectively, amid reports that the ECB had rejected a Spanish plan to recapitalize its distressed bank Bankia. Royal Dutch Shell and Tullow Oil lost 1.3% and 3.3%, respectively, as crude oil prices dropped. National Grid slumped 4.5%, as it traded ex-dividend.
FTSE 100 tumbled 1.7% to settle at 5,297.3, while FTSE 250 slumped 1.5% to close at 10,494.8.
European Market Snapshot
Other European markets closed sharply lower yesterday, as Italy failed to meet its maximum target at a bond auction and after a poll in Greece showed increased support for anti-bailout parties. Continued concerns about Spain’s troubled banking system also weighed on market sentiment. Financial sector stocks, Bankia, National Bank of Greece and Deutsche Bank lost between 0.7% and 8.6%, after the ECB stated that the Spanish government had not consulted it on any plans to recapitalize a major bank. BASF dropped 1.7%, after its CEO stated that the company’s business momentum in Asia is weaker than expected. Societe Television Francaise 1 tumbled 5.7%, after a broker stated that the company might lose about €40.0 million in revenues if the French government lifts its advertising ban on France TV.
FTSEurofirst 300 index fell 1.5% to 975.7. German DAX Xetra 30 dropped 1.8% to 6,280.8. French CAC-40 closed 2.2% lower at 3,015.6.
Commodities
In Asia, crude oil for July delivery is trading 0.2% or $0.18 lower at $87.64 per barrel. Yesterday, crude oil for July contract fell 3.2% or $2.94 to end at $87.82 per barrel, barrel, amid concerns that the European debt crisis could spread to larger economies in the region as Spain’s default risk rose to a record and Italy’s debt auction failed to meet its maximum target, and as the US dollar strengthened against the major currencies.
Gold for immediate delivery is trading 0.1% lower today, at $1,562.58 per ounce. Gold for August delivery rose 1.0% or $14.70 to settle at $1,565.70 per ounce yesterday, as mounting concerns about Greece, Spain and Italy and a fall in US pending home sales, spurred purchase of the precious metal as an alternative investment.
Currencies
At 0400 BST today, the GBP is trading marginally lower against the USD at $1.5476, marginally lower against the EUR at €1.2509, 0.3% lower against the JPY at ¥121.84.
The EUR is trading marginally lower against the USD at $1.2373.
The EUR is trading 0.3% lower against the JPY at ¥97.42, ahead of a release of data that might show the jobless rate reached to a record high and manufacturing activity contracted in the eurozone.
The JPY is trading higher against most of its major peers, as concerns about Spain’s banking system, fall in euro region’s consumer confidence, and a poll that showed a rise in support for political party opposing spending cuts in Greece, spurred demand for safe haven assets.
Yesterday, the EUR closed lower against the USD and the JPY, as Spain, Italy and Greece struggled to recover from the European sovereign debt crisis, raising speculation that debt crisis might spread to the region’s other economies.
The GBP closed lower against the USD, amid mounting speculation that Europe’s contagion would harm the UK’s economic outlook. The AUD and NZD finished lower against the USD, as mounting concerns about the economic situation in eurozone, reduced the demand for high-yielding assets. The CAD dropped against the USD, as prospects of an interest rate hike by the Bank of Canada decreased amid fears that global growth is faltering. The currency also lost value, as lower commodity prices decreased the demand for the commodity linked currency.

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