June 20, 2012 Financial Market Summary

DJIA climbed 0.7% to settle at 12,837.3. NASDAQ surged 1.2% to close at 2,929.8. S&P 500 soared 1.0% to end at 1,358.0.

Nikkei 225 index is trading 0.8% higher at 8,722.2.

FTSE 100 surged 1.7% to settle at 5,586.3.

FTSEurofirst 300 index rose 1.6% to end at 1,009.6.

In Asia, crude oil for July delivery is trading 0.2% or $0.14 lower at $83.89 per barrel.

At 0400 BST today, the GBP is trading marginally up against the USD at $1.5723, marginally higher against the EUR at €1.2402, and 0.3% lower against the JPY at ¥123.96.

US Market Snapshot

US markets closed higher yesterday, amid speculation that the Federal Reserve would unveil additional stimulus measures to stimulate the US economy. A better-than-expected Spanish debt auction and a jump in US building permits aided the momentum. Citigroup and Bank of America rallied 3.5% and 4.5%, respectively, amid reports that the Federal Housing Finance Agency would consider to help banks decrease their mortgages buybacks. FedEx gained 2.8%, as it mulled to step up cost-cutting measures to boost profit margins. Microsoft added 2.9%, after it unveiled “Surface”, a windows-powered tablet computer, while Oracle advanced 3.1%, as its fourth-quarter profit surpassed market expectations.

DJIA climbed 0.7% to settle at 12,837.3. NASDAQ surged 1.2% to close at 2,929.8. S&P 500 soared 1.0% to end at 1,358.0.

Asian Market Snapshot

Asian markets are trading higher this morning, taking cues from overnight gains on Wall Street, on hopes of fresh round of stimulus by the US Federal reserve to bolster its economy. However, gains were restricted as reports showed Japan's trade deficit widened more-than-expected in May. In Japan, Daio Paper gained value, on news that Hokuetsu Kishu Paper would acquire a 20.0% stake in the company. Honda Motor paced higher, after Nomura upgraded the stock to “Buy” from “Neutral”. In Hong Kong, communications stock, Tencent Holdings traded higher, after the company announced that it would acquire a minority stake in Epic Games. In South Korea, LG Display paced higher following report that the company has obtained maximum revenue and market share in selling of 9-inch-or-larger liquid-crystal displays.

Nikkei 225 index is trading 0.8% higher at 8,722.2. Hang Seng index is trading 0.4% higher at 19,495.2, while the Kospi index is trading 0.3% higher, at 1,898.0.

UK Market Snapshot

UK markets ended higher yesterday, as a fall in UK inflation reignited talk of more easing by the Bank of England and as Spanish debt sale surpassed target, albeit higher borrowing costs. Market sentiment was also buoyed as Greece's political parties continued talks to form a new government. ITV advanced 2.8%, amid speculation about private equity interest. Whitbread rallied 6.4%, as its first-quarter revenue came ahead of expectations. Weir Group rallied 4.6%, after the company reaffirmed its full-year guidance. Antofagasta, Vedanta Resources, Rio Tinto and ENRC added between 2.1% and 5.1%, amid hopes that stimulus measures in China would boost demand for metals. ARM Holding advanced 3.6%, after Microsoft stated that it would use the company’s chips in a version of its new Surface tablet computer. Standard Chartered gained 3.5%, as BofA Merrill Lynch upgraded the stock to “Buy” from “Neutral”.

FTSE 100 surged 1.7% to settle at 5,586.3, while FTSE 250 soared 1.4% to end at 10,870.9.

European Market Snapshot

Other European markets closed sharply higher yesterday, following a successful Spanish bill auction and as Greece moved closer to forming a coalition government. Moreover, optimism that the US Fed would announce additional stimulus at its meeting, outweighed a higher-than-expected decline in German investor confidence. Banco Santander, BNP Paribas and Commerzbank, gained between 2.7% and 3.5%, as risk appetite improved among investors. SAP added 1.5%, after its US peer, Oracle, reported better-than-expected fourth-quarter results. Roche Holding added 3.4%, after the company forged an alliance Seaside Therapeutics to develop treatments for fragile X syndrome and autism spectrum disorders.

FTSEurofirst 300 index rose 1.6% to 1,009.6. German DAX Xetra 30 rose 1.8% to 6,363.4. French CAC-40 closed 1.7% higher at 3,117.9.

Commodities

In Asia, crude oil for July delivery is trading 0.2% or $0.14 lower at $83.89 per barrel. Yesterday, crude oil for July delivery added 0.9% or 76 cents to $84.03 per barrel, as energy demand prospects improved, after the Spanish government sold more than expected at a debt auction and amid hopes of further quantitative easing by the US central bank at the FOMC meeting. Additionally, favourable US housing data and positive developments in Greece also supported crude oil prices.

Gold for immediate delivery is trading marginally lower today, at $1,620.65 per ounce. Gold for August delivery retreated 0.2% or $3.80 to $1,623.20 per ounce yesterday, as demand for the safe haven asset waned after Spain successfully sold more than the targeted amount at a debt auction and Greece moved closer to forming a pro-bailout government. However, hopes for further monetary easing by the US Fed at its two-day Federal Open Market Committee meeting supported gold prices.

Currencies

At 0400 BST today, the GBP is trading marginally up against the USD at $1.5723, marginally higher against the EUR at €1.2402, and 0.3% lower against the JPY at ¥123.96.

The EUR is trading marginally down against the USD at $1.2676, ahead of the Spanish debt auction this week, amid mounting fears that the European leaders would struggle to prevent the spread of region’s sovereign debt crisis. Spain is scheduled to sell debt tomorrow maturing in 2014, 2015 and 2017.

The EUR erased some of its gains and is trading 0.3% lower against the JPY at ¥99.95, after Spain sold its maximum target of 12 and 18-month bills yesterday, despite a rise in borrowing costs.

The NZD is trading lower against the USD, after data showed that the New Zealand’s   current-account deficit widened more-than-forecast in the first-quarter.

Yesterday, the USD ended lower against the EUR, as investors speculated that the US Fed officials might announce new monetary easing steps on Wednesday, after the end of its two-day policy meeting. The GBP closed lower against the USD and the EUR, amid speculation that the Bank of England would resume its asset purchases programme to stimulate the economy, following a report that showed inflation in the UK slowed to the least since November 2009. The AUD and NZD finished higher against the USD, after the European Union stated that it might renegotiate Greece’s bailout, spurring demand for high yielding assets.