June 14, 2012 Financial Market Summary

DJIA fell 0.6% to 12,496.4. NASDAQ slipped 0.9% to 2,818.6. S&P 500 slid 0.7% to 1,314.9.

Nikkei 225 index is trading 0.2% lower at 8,573.8.

FTSE 100 edged up 0.2% to settle at 5,483.8. FTSEurofirst 300 index eased 0.3% to 987.0.

In Asia, crude oil for July delivery is trading 0.3% or 27 cents higher at $82.89 per barrel.

At 0400 BST today, the GBP is trading marginally down against the USD at $1.5519, 0.1% higher against the EUR at €1.2354, and slightly up against the JPY at ¥123.25.

US Market Snapshot

US markets closed lower yesterday, following a drop in retail sales in May for the second month in a row. Mounting borrowing costs for Italy and Germany coupled with concerns over the outcome of Greek election also weighed on the risk appetite. Auto insurer, Progressive slipped 4.4%, as claims costs rose above the company’s target. Lawn & garden company, Scotts Miracle-Gro declined 6.6%, as it stated that it would miss its full-year target, amid sluggish demand and after RBC slashed its price target.  American Express dropped 2.4%, amid a drop in credit-card spending for April and May. Broker downgrades spurred a selloff in shares of Chesapeake Energy and Urban Outfitters.

DJIA fell 0.6% to 12,496.4. NASDAQ slipped 0.9% to 2,818.6. S&P 500 slid 0.7% to 1,314.9.

Asian Market Snapshot

Asian markets are trading mostly lower this morning, following downbeat US retail sales data and a rise in German and Italian bond yields. Additionally, downgrade of Spain’s sovereign debt rating by Egan-Jones and Moody’s also weighed on market sentiment. Tsugami lost value, after Citigroup stated that order growth for the company’s products has declined. Exporters, Nintendo, Shimano and Honda Motor paced lower, amid demand worries following sluggish US retail sales. In Hong Kong, Esprit Holdings paced lower, after its Chairman also resigned yesterday, following its CEO’s resignation. In South Korea, Daewoo Engineering & Construction gained value, after the company announced that it had bagged a river restoration project worth $349.35 million in Algeria.

Nikkei 225 index is trading 0.2% lower at 8,573.8. Hang Seng index is trading 0.6% lower at 18,910.7, while the Kospi index is trading 0.1% higher, at 1,860.7.

UK Market Snapshot

UK markets closed on a mixed note yesterday, with the FTSE 100 index closing almost flat, as borrowing costs rose at debt auctions by Italy and Germany and after US retail sales dropped in May for the second straight month. Fresnillo, the top gainer on the FTSE 100 index, advanced 4.1%, as silver showed gains during the London session. Shares of drug maker, Shire and insurer, Resolution, benefited from broker upgrades. British Sky Broadcasting rallied 1.4%, amid hopes that it would be awarded a major chunk of Premier League football rights for telecasting. Utility, SSE gained 2.1%, on favourable reviews from Barclays and Exane BNP Paribas. However, gains in the FTSE 100 were kept in check as Xstrata and Glencore International registered losses, on fears that shareholders would block their merger. Cairn Energy fell 1.1%, as it agreed to acquire North Sea oil producer Nautical Petroleum.

FTSE 100 edged up 0.2% to settle at 5,483.8, while FTSE 250 edged down 0.2% to close at 10,538.6.

European Market Snapshot

Other European markets closed in the negative territory yesterday, amid a rise in Italian and German bond yields at debt auctions and after US retail sales fell for a second consecutive month in May. Industrial sector stock, SKF, slumped 7.3%, after the company revealed “slightly lower” second quarter demand for its products and services on an annual basis, while Konecranes, Schneider Electric and Alstom, sank between 5.0% and 7.0%. Carmakers, Daimler, Volkswagen and Renault lost between 1.8% and 4.2%, after Renault’s CEO, Carlos Ghosn, issued cautious comments on European auto industry. Tyre makers, Pirelli, Michelin & Cie and Continental, fell between 2.1% and 3.5%, after Morgan Stanley highlighted that tyre volumes were “not picking up and mass pricing is on its way down”. Siemens declined 1.9%, after UBS removed the stock from its “European Key Call List”.

FTSEurofirst 300 index eased 0.3% to 987.0. German DAX Xetra 30 dropped 0.1% to 6,152.5. French CAC-40 closed 0.6% lower at 3,030.0.

Commodities

In Asia, crude oil for July delivery is trading 0.3% or 27 cents higher at $82.89 per barrel. Yesterday, crude oil for July delivery fell 0.8% or 70 cents to settle at $82.62 per barrel, an eight month low, amid sluggish fuel energy demand prospects, following a decline in the US retail sales and producer prices data for May. However, losses were limited, after the US Energy Information Administration reported that crude oil inventories fell by 200,000 barrels for the week ended 8 June. Meanwhile, the International Energy Agency slashed its estimate by 100,000 barrels from its May prediction to 89.9 million barrels per day for 2012 crude oil consumption, reflecting an increase of 820,000 barrels from last year.

Gold for immediate delivery is trading marginally lower today, at $1617.16 per ounce. Gold for August delivery rose 0.4% or $5.60 to settle at $1,619.40 per ounce yesterday, as the dollar depreciated against the euro, after investors speculated further quantitative easing by the US Federal reserve following weak retail sales data, increasing demand for the yellow metal as a hedge against inflation.

Currencies

At 0400 BST today, the GBP is trading marginally down against the USD at $1.5519, 0.1% higher against the EUR at €1.2354, and slightly up against the JPY at ¥123.25.

The EUR is trading 0.1% lower both against the USD and JPY at $1.2562 and ¥99.76 respectively, ahead of today’s Italian debt auction and Greek elections on 17 June.

The USD traded initially lower against the JPY, as investors speculated that the US Federal Reserve would expand its monetary policy if an upcoming report shows that the US consumer prices fell in May.

The NZD is trading higher against most of its major peers, after the Reserve Bank of New Zealand left the benchmark interest rate unchanged at 2.5%.

Yesterday, the EUR closed higher against the USD, amid mounting speculation that Greece might seek to modify its austerity program following the 17 June election in an effort to remain in the monetary bloc.

The AUD finished lower against the USD, as a drop in the US retail sales and rising concerns due to looming Greek elections, dampened demand for high yielding assets.

The CAD ended lower against the USD, following the Commerce Department report that showed a 0.2% decrease in the retail sales in May for US, Canada’s largest trading partner.