June 08, 2012 Financial Market Summary

DJIA edged up 0.4% to close at 12,461.0. NASDAQ fell 0.5% to settle at 2,831.0. S&P 500 slid marginally to end at 1,315.0.

Nikkei 225 index is trading 2.0% lower at 8,470.4.

FTSE100 gained 1.2% to close at 5,447.8.

FTSEurofirst 300 index rose 1.1% to 984.6.

In Asia, crude oil for July delivery is trading 1.9% or $1.63 lower at $83.19 per barrel.

At 0400 BST today, the GBP is trading 0.2% lower against the USD at $1.5493, 0.1% higher against the EUR at €1.2368, 0.5% lower against the JPY at ¥123.14.

US Market Snapshot

US markets had opened sharply higher yesterday, after China cut its benchmark lending rate. However, stocks pared earlier gains, dragging the indices lower as the Federal Reserve chief offered no indication that the central bank might take immediate action to stimulate the economy. JP Morgan Chase, Goldman Sachs, Bank of America and Morgan Stanley dropped between 0.8% and 3.8%, as the Federal Reserve released a proposal for US banks to set aside more money to cover for unexpected losses. Filtration products maker, Pall Corp shed 4.3%, as its third quarter earnings trailed market estimates. Yoga-apparel retailer, Lululemon Athletica slumped 8.8%, as its full-year earnings and sales forecasts trailed analyst estimates. Navistar International dropped 14.4%, after it posted an unexpected loss in its fiscal second-quarter.

DJIA edged up 0.4% to close at 12,461.0. NASDAQ fell 0.5% to settle at 2,831.0. S&P 500 slid marginally to end at 1,315.0.

Asian Market Snapshot

Asian markets are trading lower this morning, as an unexpected rate cut decision by China failed to cheers investors as they remained concerned about the strength of the Chinese economy and as reports showed that Japan's current account surplus unexpectedly contracted in April. Markets were also disappointed by US Fed’s failure to commit to further monetary easing. In Japan, Sony and Panasonic traded lower, amid speculation that these companies might make a major share investment in Olympus. In Hong Kong, Bank of Communications and ICBC paced declines, amid concern that the China’s rate cut decision might lower their interest-rate margins. In South Korea, Kia Motors, Samsung Electronics and Hyundai Motor traded lower, amid demand worries in a scenario of sluggish economic growth.

Nikkei 225 index is trading 2.0% lower at 8,470.4. Hang Seng index is trading 0.4% lower at 18,595.5, while the Kospi index is trading 0.5% lower, at 1,839.3.

UK Market Snapshot

UK markets gained yesterday, after People's Bank of China slashed its key policy rates and as Spain successfully sold bonds. Bank of England’s decision to maintain its interest rate and stimulus program also added to the positive sentiment. However, stocks trimmed some of the earlier gains after the US Federal Reserve chief offered no hints of further quantitative easing. Speciality chemicals company, Johnson Matthey rallied 4.9%, after it reported a sharp jump in full-year profits and declared a special dividend. Tullow Oil added 2.1%, as it discovered “good-quality light oil” offshore from Ivory Coast. Miners, Vedanta Resources, BHP Billiton and Rio Tinto gained between 2.3% and 4.0%, tracking higher base metal prices. Burberry Group advanced 5.1%, as Credit Suisse lifted its rating to “Outperform” from “Neutral”.

FTSE100 gained 1.2% to close at 5,447.8, while FTSE 250 surged 1.5% to settle at 10,745.1.

European Market Snapshot

Other European markets closed in the positive territory yesterday, after China’s central bank cut its benchmark interest rates, raising hopes that officials around the world would increase their efforts to boost the global economy. Santander, Commerzbank and Swedbank gained between 1.7% and 5.7%, as risk appetite increased among investors following a successful Spanish bond auction, while Mediobanca rose 3.1%, on news that billionaire, Vincent Bollore, might increase his stake in the company if shareholder Groupama exits. Vivendi climbed 3.7%, following reports that the company might sell its 61.0 % stake in Activision Blizzard. Deutsche Boerse advanced 2.1%, after RBC Capital Markets advised a “Buy” on the stock. Roche Holding added 0.5%, after Societe Generale raised its price target on the stock.

FTSEurofirst 300 index rose 1.1% to 984.6. German DAX Xetra 30 climbed 0.8% to 6,144.2. French CAC-40 closed 0.4% higher at 3,071.2.

Commodities

In Asia, crude oil for July delivery is trading 1.9% or $1.63 lower at $83.19 per barrel. Yesterday, crude oil for July delivery dropped 0.2% or 20 cents to settle at $84.82 per barrel, erasing strong early gains, as the US Federal Reserve Chairman Ben Bernanke’s comments lacked reference to any immediate further stimulus measures from the US central bank. Crude oil prices had risen earlier after China cut interest rates to stimulate the economy and as a strong bond auction pushed Spanish borrowing costs lower.

Gold for immediate delivery is trading 1.3% lower today, at $1,570.43 per ounce. Gold futures for delivery in August fell 2.8% or $46.20 to end at $1,588.00 per ounce yesterday, after the US Federal Reserve chief refrained from signalling imminent measures that the central bank might take to bolster the economy. 

Currencies

At 0400 BST today, the GBP is trading 0.2% lower against the USD at $1.5493, 0.1% higher against the EUR at €1.2368, 0.5% lower against the JPY at ¥123.14.

The EUR is trading 0.3% lower against the USD at $1.2527. The EUR is trading 0.6% lower against the JPY at ¥99.57.

The EUR is trading lower against most of its major peers ahead of release of a report that might show German exports fell in April, raising concerns about the European sovereign debt crisis.

The JPY is trading higher against the USD. Earlier, the JPY was trading lower against the USD, amid speculation that the Bank of Japan might increase its asset-purchase program next week.

Yesterday, the EUR ended lower against the USD. However, the EUR had gained earlier in the session, after German Chancellor, Angela Merkel, pushed for a stronger European political union and stated that her country is ready to back eurozone financial instruments and following a successful bond auction in Spain. The USD closed higher against the JPY, after the Federal Reserve Chairman, Ben S. Bernanke, refrained from indicating additional steps the officials might take to boost economic growth. The GBP closed higher against the USD, as the Bank of England kept its stimulus program unchanged, following a steady growth in the UK services sector and recovering retail sales. A report showed UK services grew higher-than-expected in May. The AUD and the NZD finished higher against the USD, after China’s central bank lowered its Benchmark interest rates, spurring demand for riskier assets. The AUD also gained value, after the statistics bureau reported that Australian payrolls jumped by 38,900 in May.