June 25, 2012 Financial Market Summary

DJIA rallied 0.5% to end at 12,640.8.NASDAQ surged 1.2% to settle at 2,892.4. S&P 500 climbed 0.7% to close at 1,335.0.

Nikkei 225 index is trading 0.2% lower at 8,785.1.

FTSE 100 shed 0.9% to settle at 5,513.7.

FTSEurofirst 300 index fell 0.7% to end at 1,001.9.

In Asia, crude oil for August delivery is trading 0.3% or $0.21 higher at $79.97 per barrel.

At 0400 BST today, the GBP is trading marginally down against the USD at $1.5582, 0.2% higher against the EUR at €1.2433, and 0.2% lower against the JPY at ¥125.11.

US Market Snapshot

US markets closed higher on Friday, shrugging off a much-anticipated round of bank downgrades by Moody’s, as the European Central Bank moved to ease its lending rules to allow financial institutions to pledge a wider range of assets to avail central-bank funds. Morgan Stanley, JP Morgan Chase and Bank of America added between 1.3% and 1.5%, as downgrades by Moody’s on the previous day were less severe than feared. First Solar soared 9.2%, after it received an approval to continue construction activities at its California solar farm. Facebook added 3.8%, after Nomura initiated a “Buy” rating on the stock, while Zynga jumped 4.8%, after a broker issued an upbeat note on its recent gaming portfolio. Harvest Natural Resources surged 86.9%, after it agreed to sell its Venezuela assets to Indonesia's PT Pertamina.

DJIA rallied 0.5% to end at 12,640.8.NASDAQ surged 1.2% to settle at 2,892.4. S&P 500 climbed 0.7% to close at 1,335.0

Asian Market Snapshot

Asian markets are trading mostly lower this morning, as investors grew cautious amid uncertainty ahead of a critical European Union summit later this week. In Japan, Renesas Electronics lost value, on news that the company might sell $621 million of new shares. Yahoo Japan traded lower following a report that the government would question the Internet Company on e-mail privacy. In Hong Kong, The Bank of East Asia and Hang Seng Bank traded higher, tracking gains in their US peers on Friday. Evergrande Real Estate Group traded higher amid favourable comments from several brokers. In South Korea, POSCO, paced lower, after the company reported that Nippon Steel had demanded $1.2 billion in compensation in a legal case.

Nikkei 225 index is trading 0.2% lower at 8,785.1. Hang Seng index is trading 0.2% higher at 19,023.1, while the Kospi index is trading 1.7% lower, at 1,816.0.

UK Market Snapshot

UK markets ended lower on Friday, weighed down by a sharp fall in mining sector stocks, amid concerns about the global economic recovery. BHP Billiton and Kazakhmys lost 2.7% and 3.0%, respectively, tracking a drop in base metal prices. Vedanta Resources fell 2.9%, amid speculation that the Indian government would reject Vedanta’s offer to buy stakes in Hindustan Zinc and Bharat Aluminium. Petrofac dropped 4.7%, ahead of a trading update on Tuesday. BP, Royal Dutch Shell and BG Group lost 1.2%, 1.7% and 2.4%, respectively, as risk appetite waned among investors. Vodafone Group edged down 0.2%, after Goldman Sachs removed the firm from its “Conviction Buy” list. Power provider, SSE lost 0.8%, after HSBC cut its rating from “Neutral” to “Underweight”. Marks & Spencer fell 3.1%, as Exane BNP Paribas initiated coverage on the stock with an “Underperform” rating.

FTSE 100 shed 0.9% to settle at 5,513.7. FTSE 250 fell 1.1% to end at 10,823.9.

European Market Snapshot

Other European markets closed lower on Friday, after German business confidence fell to its lowest level in more than two years in June. However, stocks trimmed some losses in the later session after the European Central Bank eased rules for collateral. Carmakers, Volkswagen, BMW and Porsche Automobil Holding declined between 0.9% and 1.5%, following report that rebates on new cars rose in June. Chemical maker, Solvay plunged 5.9%, after Citigroup trimmed its recommendation on the stock to “Sell” from “Neutral”. Bayer declined 2.5%, after the company and Johnson & Johnson failed to gain US FDA approval for wider use of their drug Xarelto. Royal KPN lost 4.4%, after ING Groep advised a “Sell” on the stock, citing volatility concern.

FTSEurofirst 300 index fell 0.7% to end at 1,001.9. German DAX Xetra 30 lost 1.3% to 6,263.3. French CAC-40 closed 0.7% lower at 3,090.9.

Commodities

In Asia, crude oil for August delivery is trading 0.3% or $0.21 higher at $79.97 per barrel. On Friday, crude oil for August delivery rose 2.0% or $1.56 to end at $79.76 per barrel, amid bargain hunting from investors following sharp losses in the previous sessions. Crude oil prices were also supported on news that the European Central Bank had relaxed some rules on bank collateral and amid possibility of a tropical storm in the Gulf of Mexico.

Gold for immediate delivery is trading marginally higher today, at $1,572.99 per ounce. Gold for August delivery added 0.1% or $1.50 to settle at $1,566.90 per ounce on Friday, on some bargain hunting from investors following previous day’s sharp sell-off. A weaker dollar also bolstered the demand for the yellow metal as an alternative investment.

 Currencies

At 0400 BST today, the GBP is trading marginally down against the USD at $1.5582, 0.2% higher against the EUR at €1.2433, and 0.2% lower against the JPY at ¥125.11.

The EUR is trading 0.2% lower against the USD at $1.2534 and 0.4% lower against the JPY at ¥100.63, ahead of the Italian and Spanish debt auction tomorrow, amid mounting speculation that eurozone debt crisis would spread to bigger economies of the region. The currency also traded lower amid speculation that data today would show a decline in German business confidence. 

The AUD and the NZD are trading lower against most of their major peers, ahead of the European leaders’ summit this week, as fears of escalation of the European sovereign debt crisis decreased demand for high yielding assets.

The JPY is trading higher against the USD. Earlier, the JPY was trading lower, as Prime Minister, Yoshihiko Noda’s, Democratic Party of Japan struggled to overcome internal conflict to his bill to double Japan’s sales tax.

On Friday, the EUR closed higher against the USD, after the European Central Bank stated that it would widen the range of securities it would accept from eurozone banks in exchange for its loans to boost lending to companies and household.

The JPY closed lower against the USD, after sales at supermarkets in Japan fell 1.7% in May to ¥1.04 trillion, compared to a 1.9% drop recorded in April, and after Japan's government retained its economic assessment, but warned of downside risks stemming from growing uncertainty about the economic situation in the Eurozone.