June 19, 2012 Financial Market Summary

DJIA edged down 0.2% to settle at 12,741.8. NASDAQ advanced 0.8% to close at 2,895.3. S&P 500 ticked up 0.1% to end at 1,344.8.

Nikkei 225 index is trading 0.3% lower at 8,698.6.

FTSE 100 edged up 0.2% to settle at 5,491.1.

FTSEurofirst 300 index closed marginally higher at 993.7.

In Asia, crude oil for July delivery is trading marginally lower at $83.24 per barrel.

At 0400 BST today, the GBP is trading marginally up against the USD at $1.5689, 0.1% lower against the EUR at €1.2445, and marginally lower against the JPY at ¥123.91.

US Market Snapshot

US markets closed mostly higher yesterday, as some positive sentiment on Greece and signs of revival in the US housing market countered rising fears about Spain. Clean energy providers, LDK Solar, SunPower, First Solar and Suntech Power Holdings added between 1.8% and 9.2%, after the Japanese government introduced tax incentives for solar panels. Homebuilders, Beazer, Toll Brothers and Pulte advanced between 1.9% and 3.4%, as US homebuilder sentiment for June rose to its highest level in five years. However, financial stocks, Citigroup and Morgan Stanley retreated 2.7% and 3.4%, respectively, amid erosion of risk appetite among investors. Bank of America dropped 1.8%, as it neared a deal to dispose its non-US wealth management operations to Julius Baer.

DJIA fell 0.2% to settle at 12,741.8. NASDAQ rose 0.8% to 2,895.3. S&P 500 gained 0.1% to end at 1,344.8.

Asian Market Snapshot

Asian markets are trading lower this morning, after borrowing costs in Spain reached to a euro-area record and amid fading optimism that Greece’s election of pro-bailout parties would calm the region’s debt crisis. In Japan, Nomura Holdings lost value, after Reuters reported that Japan had excluded the company from working on the government's sale of Japan Tobacco shares. In Hong Kong Pacific Basin Shipping lost value after the company forecasted a net loss for the six months ending in June. In South Korea, Samsung Electronics traded lower, after Tong Yang Securities stated in a report that the company’s second quarter profit was likely to be lower than its initial forecasts.

Nikkei 225 index is trading 0.3% lower at 8,698.6. Hang Seng index is trading 0.2% lower at 19,388.8, while the Kospi index is trading 0.1% lower, at 1,890.8.

 UK Market Snapshot

UK markets closed on a mixed note yesterday, with the FTSE 100 index eking out gains, as the Greek-poll results alleviated fears of an imminent disintegration of the eurozone, despite rising Spanish and Italian bond yields. Burberry rallied 2.9%, following positive comments by Deutsche Bank on the luxury goods sector, while Rolls-Royce climbed 2.1%, as it bagged a submarine contract worth over £1 billion with the Ministry of Defence. Media major, WPP rose 0.8%, following an acquisition of a majority stake in Slovakian advertising agency Communication Group. Building materials group, Wolseley added 2.6%, after analysts highlighted that it might return up to £1.5 billion to shareholders or it might move for a buyback. However, Royal Bank of Scotland, Lloyds Banking Group and Standard Chartered fell between 1.7% and 5.0%, after Nomura retained its “Neutral” view of the UK banking sector.

FTSE 100 edged up 0.2% to settle at 5,491.1, while FTSE 250 inched 0.1% lower to end at 10,721.4.

European Market Snapshot

Other European markets closed mixed yesterday, as an election victory for the pro-bailout parties in the Greek elections offset escalating concerns about eurozone following a sharp rise in Spanish benchmark 10-year bond yields. MAN added 2.0%, after the company announced that its owner, Volkswagen, might increase its stake in the company in next 12 months. PPR rose 1.1%, after Deutsche Bank issued positive comments on the luxury-goods industry. Utility sector stock, Electricite de France gained 2.8%, after Exane BNP Paribas upgraded the stock to “Outperform” from “Neutral”. However, Carrefour declined 3.2%, after its CEO, Georges Plassat, stated that it would take at least three years to turnaround the company. Bankia, Banco Santander and BBVA declined between 4.2% and 9.0%, after data showed that bad loans for banks in Spain continued to rise in April.

FTSEurofirst 300 index closed marginally higher at 993.7. German DAX Xetra 30 advanced 0.3% to 6,248.2. French CAC-40 closed 0.7% lower at 3,066.2.

Commodities

In Asia, crude oil for July delivery is trading marginally lower at $83.24 per barrel. Yesterday, crude oil for July delivery declined 0.9% or 76 cents to end at $83.27 per barrel, as fading optimism over the Greek election results and a surge in Spanish borrowing costs added to concerns the eurozone debt crisis would curb demand for crude oil. However, lack of any progress in talks between six world powers and Iran over Tehran's nuclear program continued to support crude oil prices.

Gold for immediate delivery is trading 0.1% higher today, at $1,628.24 per ounce. Gold for August delivery eased 0.1% or $1.10 to settle at $1,627 per ounce yesterday, as a positive outcome of the Greek elections dampened speculations that Greece might exit the eurozone, decreasing the metal’s safe haven demand. Investors also remained cautious ahead of the Federal Open Market Committee (FOMC) meeting on Tuesday and Wednesday.

Currencies

At 0400 BST today, the GBP is trading marginally up against the USD at $1.5689, 0.1% lower against the EUR at €1.2445, and marginally lower against the JPY at ¥123.91.

The EUR is trading 0.1% higher against the USD at $1.2606. The currency is trading marginally higher against the JPY at ¥99.58. Earlier, the EUR was trading lower against the USD and JPY, amid mounting speculation that European lawmakers would struggle to contain region’s debt crisis, following a sharp rise in Spanish borrowing costs.

The USD is trading lower against most of its major peers, ahead of the US Federal Reserve meeting, amid speculation that policy makers would take further monetary easing steps to bolster the country’s economy.

The AUD is trading lower against the JPY, after the Reserve Bank of Australia stated that it had lowered interest rates this month after a “finely balanced” discussion.

Yesterday, the EUR ended lower against the USD, as Spanish 10-year bond yields rose to euro-area high levels.

The USD finished higher against the JPY, after National Association of Home Builders reported a modest increase in the US homebuilder confidence in June.

The AUD closed higher against the USD, after Treasury Secretary, Martin Parkinson, stated that the country has capacity to respond to an economic shock from Europe.