June 06, 2012 Financial Market Summary

DJIA edged up 0.2% to close at 12,128.0. NASDAQ gained 0.7% to settle at 2,778.1. S&P 500 advanced 0.6% to end at 1,285.5.

Nikkei 225 index is trading 1.3% higher at 8,492.2.

FTSE 100 shed 1.1% to close at 5,260.2.

FTSEurofirst 300 index added 0.3% to 953.1.

In Asia, crude oil for July delivery is trading 0.6% or $0.52 higher at $84.81 per barrel.

At 0400 BST today, the GBP is trading 0.2% higher against the USD at $1.5411, flat against the EUR at €1.2344, 0.3% higher against the JPY at ¥121.48.

US Market Snapshot

US markets closed higher yesterday, with the DJIA index snapping its four days losing streak, as a better than expected reading on US service sector activity and reports that Spain might receive a precautionary credit line from the EFSF, lifted market sentiment. Prudential Financial rallied 2.8%, and led the insurance sector higher, as investors focused on the company’s ability to handle pension obligations for General Motors. Homebuilders, DRHorton, Pulte and Lennar gained between 2.6% and 6.7%, as US home prices rose for the second straight month in April. Oracle advanced 1.9%, as it announced a deal to acquire Collective Intellect, while SanDisk jumped 5.5%, as a broker initiated coverage on the stock with an “Outperform” rating. RF Micro Devices surged 13.2%, after a broker raised its rating to “Positive” from “Neutral”.

DJIA edged up 0.2% to close at 12,128.0. NASDAQ gained 0.7% to settle at 2,778.1. S&P 500 advanced 0.6% to end at 1,285.5.

Asian Market Snapshot

Asian markets are trading higher this morning, taking cues from overnight gains on Wall Street, after US services industry grew at a faster-than-estimated pace and the G-7 leaders agreed to coordinate efforts to stem the European debt crisis. In Japan, retailer, Tokyo Derica gained value, after the company cancelled a share sale. Exporters, Sharp, Nikon and Mazda Motor traded higher, as the yen depreciated against the dollar. However, Nintendo dropped after it failed to announce an offer pricing or a launch date for its new Wii-U videogame console. In Hong Kong, HSBC Holdings and Bank of Communications paced higher, tracking gains in their US peers. Markets in South Korea are closed on the account of a public holiday.

Nikkei 225 index is trading 1.3% higher at 8,492.2. Hang Seng index is trading 0.8% higher at 18,401.1.

UK Market Snapshot

UK markets slumped on Friday, following a contraction in the UK manufacturing activity at the fastest pace in three years for May and after Chinese factory output and US non-farm payrolls figures came below expectation. Vedanta Resources, ENRC, Xstrata and Evraz dropped between 1.3% and 4.9%, tracking a decline in base metal prices, as a downbeat reading on Chinese manufacturing index raised worries over future metal demand. Croda International, InterContinental Hotels Group and Weir Group lost 2.6%, 2.9% and 4.0%, respectively, as they traded ex-dividend. ITV declined 4.7%, after Investec downgraded its rating on the stock from “Hold” to “Sell”, citing a downturn in the TV advertising market. Telecoms major, BT Group fell 1.5%, wiping out its earlier gains, as it stated that it has disposed its application development services business in France to the Paris-listed IT services company, Osiatis.

FTSE 100 shed 1.1% to close at 5,260.2, while FTSE 250 slumped 2.0% to settle at 10,346.7.

European Market Snapshot

Other European markets closed mostly higher yesterday, as the US services sector expanded at a faster-than-expected pace and as the G-7 officials agreed to cooperate to deal with the eurozone debt crisis. Financial sector stocks, CaixaBank and Bankinter added 2.6% and 2.3%, respectively, after Spain’s Budget Minister, Cristobal Montoro stated that the European Union should provide financial aid to the banks. PostNL climbed 5.6%, on hopes that the Dutch government’s planned pension rule might benefit the company’s retirement fund. MAN surged 9.1%, after Volkswagen raised its stake in the company. However, EON dropped 1.2%, after the company stated that it might lose millions of euros due to “irregularities” by a former employee. France Telecom declined 0.2%, after the company trimmed its dividend.

FTSEurofirst 300 index added 0.3% to 953.1. German DAX Xetra 30 eased 0.1% to 5,969.4. French CAC-40 closed 1.1% higher at 2,986.1.

Commodities

In Asia, crude oil for July delivery is trading 0.6% or $0.52 higher at $84.81 per barrel. Yesterday, crude oil for July delivery gained 0.4% or 31 cents to settle at $84.29 per barrel, as the ISM report showed an improvement in the US services sector and after the G-7 officials agreed to closely monitor developments in Europe. However, gains were limited amid escalating concerns about the Eurozone, after Spain stated that the country was shut out of the credit markets.

Gold for immediate delivery is trading 0.5% higher today, at $1,625.81 per ounce. Gold for August delivery rose 0.2% or $3 to settle at $1,616.90 per ounce yesterday, in anticipation of more monetary easing measures from the central banks and on positive US service sector data.

Currencies

At 0400 BST today, the GBP is trading 0.2% higher against the USD at $1.5411, flat against the EUR at €1.2344, 0.3% higher against the JPY at ¥121.48.

The EUR is trading 0.2% higher against the USD at $1.2486.

The EUR is trading 0.3% higher against the JPY at ¥98.42. Earlier, the currency was trading lower against the JPY, amid speculation that reports due to be released would show growth in the eurozone stagnated in the first-quarter and industrial production in Germany declined in April.

The USD is trading lower against the EUR and the GBP, as demand for safe haven decreased, amid hopes that policymakers from the world’s leading economies would work together to contain the European debt crisis.

The AUD is trading higher against the USD, after a report showed that the country’s economy expanded at a faster-than-expected pace in the first quarter.

Yesterday, the EUR finished lower against the USD, after Spanish Budget Minister, Cristobal Montoro stated that the country faces difficulties in accessing capital markets. The JPY ended lower against the USD, after Japanese Finance Minister, Jun Azumi, highlighted that G-7 officials remained supportive of intervention to address extreme currency moves in the currency. The AUD closed higher against the USD, after the Reserve Bank of Australia lowered interest rates less-than-some forecasts. The CAD finished higher against the USD, after the Bank of Canada officials stated that they might raise interest rates if the domestic economic recovery continues as forecast, despite a rise in global risks.