June 21, 2012 Financial Market Summary

DJIA edged down 0.1% to settle at 12,824.4. NASDAQ advanced marginally to close at 2,930.5. S&P 500 inched 0.2% lower to end at 1,355.7.

Nikkei 225 index is trading 1.0% higher at 8,836.7.

FTSE 100 added 0.6% to settle at 5,622.3.

FTSEurofirst 300 index rose 0.5% to end at 1,014.3.

In Asia, crude oil for August delivery is trading 3.5% or $2.97 lower at $81.06 per barrel.

At 0400 BST today, the GBP is trading 0.2% lower against the USD at $1.5679, 0.1% lower against the EUR at €1.2377, and flat against the JPY at ¥124.77.

US Market Snapshot

US markets ended mostly lower yesterday, with the S&P 500 index snapping its four sessions winning streak, as the Federal Reserve sharply lowered its outlook for the US economic growth amid a slowdown in hiring. Procter & Gamble lost 2.9%, after it trimmed its earnings outlook for the current quarter and for 2013. Adobe Systems fell 2.7%, as it cut its full-year outlook. However, Cisco Systems rallied 1.9%, after a broker upgraded the stock to “Outperform” from “Market Perform”. Idenix Pharmaceuticals surged 14.3%, after it announced upbeat interim results for its hepatitis C drug study. Applied Materials added 3.4%, following an upgrade from an “Equal-Weight” rating to an “Over-Weight” rating at Barclays Capital. DJIA edged down 0.1% to settle at 12,824.4.

NASDAQ advanced marginally to close at 2,930.5. S&P 500 inched 0.2% lower to end at 1,355.7.

Asian Market Snapshot

Asian markets are trading mostly lower this morning, after data showed that China’s manufacturing activity weakened further in June and as a lack of fresh stimulus measures from the US Federal Reserve disappointed investors. In Japan, Renesas Electronics gained value, following report that private equity firms, KKR and Silver Lake might invest in the company. Honda Motor traded higher, after Credit Suisse raised its price target on the stock. In Hong Kong, China Petroleum & Chemical lost value, on news that the company was considering bidding for assets owned by Chesapeake Energy. In South Korea, Himart traded lower after SK Networks and Shinsegae announced yesterday that they had dropped out of the bidding to acquire a significant stake in the firm.

Nikkei 225 index is trading 1.0% higher at 8,836.7. Hang Seng index is trading 0.9% lower at 19,347.6, while the Kospi index is trading 0.7% lower, at 1,891.1.

UK Market Snapshot

UK markets closed higher yesterday, amid hopes of further monetary easing from the Bank of England, after minutes from the Monetary Policy Committee’s latest meeting showed more members voted for further monetary policy easing. Sage Group jumped 5.5%, after it acquired a controlling stake in business software writer Folhamatic of Brazil, while ITV rose 3.0%, amid news that it might be a takeover target for a private-equity firm. Aviva rallied 4.7%, on reports that European Union was mulling new capital rules for life insurers over seven years, easing the burden on the sector. Invensys jumped 26.6%, amid speculation that Emerson Electric has expressed an interest in buying all or part of the firm. Rio Tinto gained 1.4%, after it mulled to invest a further $4.2 billion in its iron-ore operations in Australia and Guinea. Standard Chartered and Royal Bank of Scotland added 1.6% and 1.8%, respectively, as risk appetite improved among investors.

FTSE 100 added 0.6% to settle at 5,622.3, while FTSE 250 soared 1.4% to 11,022.8.

European Market Snapshot

Other European markets closed in the positive territory yesterday, as investors looked ahead to the results of the 2-day FOMC meeting, amid speculation that the US Federal Reserve would expand support for the economy. Retailer, Hennes & Mauritz climbed 4.8%, after the company reported a sharp rise in its second-quarter profit. PSA Peugeot Citroen rallied 6.5%, on news that France might introduce a tax on large luxury cars to help slow a drop in demand for small sized cars, while Renault gained 2.8%, extending its earlier session gains. Among utilities, RWE added 3.6% after Nomura upgraded the stock to “Neutral” from “Reduce”, while EON advanced 2.9% after the same broker raised its recommendation on the stock to “Buy” from “Neutral”.

FTSEurofirst 300 index rose 0.5% to end at 1,014.3. German DAX Xetra 30 advanced 0.5% to 6,392.1. French CAC-40 closed 0.3% higher at 3,126.5.

Commodities

In Asia, crude oil for August delivery is trading 3.5% or $2.97 lower at $81.06 per barrel. Yesterday, crude oil futures for July delivery declined 2.7% or $2.23 to end at $81.90 per barrel, after the Energy Information Administration data reported that crude supplies rose by 2.9 million barrels in the week ended 15 June, their highest level since 1990 and on comments by the US Fed Chairman Ben Bernanke that offered little hope for further monetary easing. Crude oil prices were only mildly influenced by another round of inconclusive talks between the major world powers and Iran over its nuclear program. The July contract expired yesterday.

Gold for immediate delivery is trading 0.1% lower today, at $1,601.97 per ounce. Gold for August delivery declined 0.5% or $7.40 to $1,615.80 per ounce yesterday, as investors remained disappointed after the US Fed fell short of announcing another round of quantitative easing but extended its “Operation Twist” program as expected.

Currencies

At 0400 BST today, the GBP is trading 0.2% lower against the USD at $1.5679, 0.1% lower against the EUR at €1.2377, and flat against the JPY at ¥124.77.

The EUR is trading 0.1% lower against the USD at $1.2669, as Spain prepares to sell bond maturing 2014, 2015 and 2017 amid signs the debt crisis is hampering economic growth in the euro region. EUR also traded lower, amid speculation that a preliminary report today might show European services and manufacturing contracted in June at the fastest pace in three years. However, gains in USD were limited after the US Federal Reserve stated that it stands ready to implement further stimulus.

The EUR is trading 0.1% higher against the JPY at ¥100.81, ahead of the European finance ministers meeting today to discuss the region’s debt crisis.

The NZD is trading higher against most of its major peers, following a report that showed New Zealand’s economy grew at the fastest pace in five years in the March quarter, as food manufacturing and farm production increased

Yesterday, the USD closed lower against the EUR, on prospects that the US Federal Reserve would implement fresh round of stimulus measures to bolster the economy, if needed. The GBP closed lower against the USD and the EUR after minutes of the Bank of England’s June meeting showed more members supported additional stimulus and after a report showed UK jobless-benefit claims unexpectedly rose in May. The CAD finished lower against the USD after the US Federal Reserve trimmed its US economic growth estimates for 2012 amid a slowdown in hiring.