June 12, 2012 Financial Market Summary

DJIA slumped 1.1% to settle at 12,411.2. NASDAQ tumbled 1.7% to close at 2,809.7. S&P 500 shed 1.3% to finish at 1,308.9.

Nikkei 225 index is trading 1.3% lower at 8,514.8.

FTSE 100 edged down marginally to settle at 5,432.4. FTSEurofirst 300 index added 0.1% to 983.1.

In Asia, crude oil for July delivery is trading 1.1% or $0.89 lower at $81.81 per barrel.

At 0400 BST today, the GBP is trading flat against the USD at $1.5483, 0.1% lower against the EUR at €1.2402, 0.1% higher against the JPY at ¥122.86.

US Market Snapshot

US markets closed sharply lower yesterday, as enthusiasm over the $125 billion bailout for Spanish banks faded out and investors cautiously looked ahead to the Greek elections next Sunday.  Peabody Energy, Alpha Natural Resources and Patriot Coal declined between 4.7% and 13.2%, as the coal industry continues to grapple with intense competition from cheaper natural gas. AK Steel Holding plunged 14.0%, as Goldman Sachs downgraded its rating on the stock to “Sell” from “Neutral”. Apple retreated 1.6%, after its annual Worldwide Developers Conference failed to impress investors. Centene plunged 22.2%, after it slashed its 2012 earnings outlook. Diamond Foods tumbled 8.0%, after it stated that it would fail to meet a Monday deadline to file its quarterly reports and expects a delisting notice from NASDAQ.

DJIA slumped 1.1% to settle at 12,411.2. NASDAQ tumbled 1.7% to close at 2,809.7. S&P 500 shed 1.3% to finish at 1,308.9.

Asian Market Snapshot

Asian markets are trading lower this morning, tracking overnight losses on Wall Street, as the Spanish bank aid package failed to ease concerns about the eurozone contagion. In Japan, JFE Holdings lost value, after its Chinese peer Baoshan Iron & Steel cut steel prices following a slump in demand. Nomura Holdings lost value, after Japan’s Financial Services Minister, stated that the company might face regulatory action after employees leaked insider information. In Hong Kong, retailer, Li Ning paced lower, after the company announced that it might report substantial decline in its first-half and full-year earnings for fiscal 2012. In South Korea, shipbuilders, Daewoo Shipbuilding & Marine Engineering and Hyundai Heavy Industries traded lower, reversing their earlier session gains.

Nikkei 225 index is trading 1.3% lower at 8,514.8. Hang Seng index is trading 0.9% lower at 18,779.8, while the Kospi index is trading 1.0% lower, at 1,849.2.

UK Market Snapshot

UK markets closed lower yesterday, paring earlier gains, amid uncertainty over the long term efficacy of the Spanish bank rescue deal and continued concerns about the eurozone debt crisis. ENRC dropped 4.0%, after RBC capital downgraded the stock to “Underperform” from “Sector Perform”, citing price realisation pressures and cost headwinds, while Antofagasta fell 0.6%, after the same broker downgraded the stock. Kazakhmys and Fresnillo fell 1.8% and 3.2%, respectively, while Royal Bank of Scotland dropped 0.7%, as the uncertain outlook in the eurozone dampened investor sentiment.  Aquarius Platinum slumped 10.9%, after it suspended operations in South Africa’s Marikana mine, owing to sluggish price outlook. Oil and gas contractor, Lamprell dropped 6.8%, after Investec trimmed its target price, following Thursday’s profit warning.

FTSE 100 edged down marginally to settle at 5,432.4, while FTSE 250 slid 0.4% to close at 10,658.2.

European Market Snapshot

Other European markets closed mostly positive yesterday, trimming most of its earlier gains, as optimism over the Spanish aid fizzled out, as investors awaited more details on the rescue deal and on renewed uncertainty over the Greek elections this weekend. Carmaker, Volkswagen and Porsche gained 1.3% and 2.4%, respectively, after the former stated that it had cleared a tax hurdle to buy 50.1% of the latter’s sports-car business. Volkswagen also advanced, after data showed that sale of its Audi brand reached new monthly record highs in May. However, Banco Santander eased 0.3%, after Fitch Ratings downgraded its Long-term Issuer Default Ratings (IDR), while UniCredit, Intesa Sanpaolo and Mediobanca dropped between 5.6% and 8.8%, following a rise in Italian bond yields.

FTSEurofirst 300 index added 0.1% to 983.1. German DAX Xetra 30 rose 0.2% to 6,141.1. French CAC-40 closed 0.3% lower at 3,042.8.

Commodities

In Asia, crude oil for July delivery is trading 1.1% or $0.89 lower at $81.81 per barrel. Yesterday, crude oil futures for July delivery slid 1.7% or $1.40 to settle at $82.70 per barrel, amid fuel energy demand concern, on speculation that Spain’s bailout plan would fail to contain the European sovereign debt crisis and on renewed concerns about Greece. Crude oil prices also dropped following a rise in the dollar against the euro and after the Saudi Arabian Oil Minister, Ali al-Naimi, called for an increase in OPEC’s output target.

Gold for immediate delivery is trading 0.1% higher today, at $1,592.81 per ounce. Gold for August delivery rose 0.3% or $5.40 to settle at $1,596.80 per ounce yesterday. Gold futures had gained initially in line with the euro as investors welcomed the Spanish bank bailout program. However, gains were trimmed on profit booking as the metal price rose back above $1,600.00 per ounce and as the euro eased amid lingering concerns about Greece and other eurozone economies. 

Currencies

At 0400 BST today, the GBP is trading flat against the USD at $1.5483, 0.1% lower against the EUR at €1.2402, 0.1% higher against the JPY at ¥122.86. A report showed that UK RICS index of house prices remained negative in May as concerns about domestic economic instability and global uncertainty continued to weigh on consumer sentiment

The EUR is trading 0.1% higher against the USD at $1.2484. Earlier, the EUR was trading lower before Italy sells bonds this week and the upcoming elections in Greece. The EUR is trading 0.1% higher against the JPY at ¥99.06.Earlier, the EUR was trading lower as demand for safe haven increased amid concerns after borrowing costs in Italy and Spain surged yesterday.

The USD is trading flat against the JPY, amid speculation that reports due tomorrow would show a decline in US retail sales for the month of May.

The AUD is trading higher against the JPY. Earlier, the currency traded lower, after National Australia Bank (NAB) report showed that Australian business confidence slid to a nine month low in May.

The NZD is trading lower against the JPY. However, losses in the currency were restricted after a report showed that home prices in New Zealand climbed in May.

Yesterday, the USD closed higher against the EUR, as demand for safe haven increased on renewed concerns about Greece and as optimism about Spain’s bank bailout faded due to uncertainty. The CAD and AUD finished lower against the USD, amid mounting concern that Italy might be the next European country to require a bailout, dampening demand for high yielding assets.