June 29, 2012 Financial Market Summary

DJIA edged down 0.2% to end at 12,602.3. NASDAQ fell 0.9% to settle at 2,849.5. S&P 500 ticked down 0.2% to close at 1,329.0.

Nikkei 225 index is trading 0.1% lower at 8,862.9.

FTSE 100 fell 0.6% to settle at 5,493.1.

FTSEurofirst 300 index declined 0.5% to 995.1.

In Asia, crude oil for August delivery is trading 1.9% or $1.45 higher at $79.14 per barrel.

At 0400 BST today, the GBP is trading 0.6% higher against the USD at $1.5604, 0.8% lower against the EUR at €1.2377, and 0.6% higher against the JPY at ¥123.86.

US Market Snapshot

US markets closed modestly lower yesterday, paring earlier losses, amid speculation that leaders at the European summit would come up with a concrete solution to the region’s debt crisis. Earlier, markets were under pressure, after data showed jobless claims last week were near their highest level in a year and the economic growth slowed as expected in the first quarter. JPMorgan Chase, the top laggard on the DJIA index, dropped 2.5%, after The New York Times reported that its trading losses from credit derivatives could reach $9 billion, while Bank of America, Morgan Stanley and Citigroup dropped between 0.3% and 2.6%.Family Dollar Stores slipped 2.8%, as its third-quarter earnings missed market expectations. Health insurance stocks, Cigna, Aetna and Wellpoint lost between 2.7% and 5.2%, after the US Supreme Court upheld the Obama administration's healthcare overhaul law.

DJIA edged down 0.2% to end at 12,602.3. NASDAQ fell 0.9% to settle at 2,849.5. S&P 500 ticked down 0.2% to close at 1,329.0.

Asian Market Snapshot

Asian markets are trading mixed this morning, as reports that European leaders had mulled to establish a single financial supervisory mechanism for the eurozone, offset downbeat economic data from Japan, the US and eurozone. In Japan, TDK Corporation and Nidec Corp dropped after their US peer, Hutchinson Technology reported disappointing third quarter results. In Hong Kong, energy sector stock, China Gas Holdings gained value, after the company posted a sharp rise in its annual earnings. In South Korea, gains in Kospi index were restricted as Kia Motors and Hyundai Motor paced lower, amid continued concerns about a labour strike. However, Tsingtao Brewery lost value after its chairman quit for health reasons.

Nikkei 225 index is trading 0.1% lower at 8,862.9. Hang Seng index is trading 2.1% higher at 19,428.7, while the Kospi index is trading 0.6% higher, at 1,830.4.

UK Market Snapshot

UK markets closed lower yesterday, weighed down by a sharp decline in banking sector stocks, after Barclays received a backlash from British lawmakers over its manipulation of LIBOR and as investors continued to fret over the outcome of the EU summit. Barclays plunged 15.5%, on concerns of further litigations, after the company was fined $452.0 million on Wednesday over its manipulation of interbank lending rates. HSBC Holdings and Royal Bank of Scotland dropped 2.6% and 11.5%, respectively, amid reports that the banks were being probed for attempting to manipulate LIBOR. Reckitt Benckiser fell 2.3%, as Credit Suisse downgraded its rating on the stock to “Neutral” from “Outperform”. Polymetal International slipped 3.0%, as UBS cut its rating on the stock from “Buy” to “Neutral”, citing weak silver prices. GlaxoSmithKline fell 1.6%, after a broker recommended its peer AstraZeneca.

FTSE 100 fell 0.6% to settle at 5,493.1, while FTSE 250 also slid 0.6% to close at 10,688.3.

European Market Snapshot

Other European markets slid yesterday, as investors remained cautious ahead of the EU summit. Markets retreated following a sharp rise in Spanish borrowing costs at a debt auction and higher-than-expected increase in Germany’s unemployment rate. UBS lost 2.8%, following report that the company was being probed for attempting to manipulate LIBOR, while Commerzbank slumped 5.7%, after the company issued new shares worth about €176.5 million. Among other financials, Banco Popular, Banca Monte dei Paschi di Siena and Banca Popolare di Sondrio Scarl, fell between 1.6% and 3.5%, following a rise in Italian and Spanish borrowings costs.

FTSEurofirst 300 index declined 0.5% to 995.1. German DAX Xetra 30 fell 1.3% to 6,149.9. French CAC-40 closed 0.4% lower at 3,051.7.

Commodities

In Asia, crude oil for August delivery is trading 1.9% or $1.45 higher at $79.14 per barrel. Yesterday, crude oil for August delivery slid 3.1% or $2.52 to $77.69 per barrel, as various downbeat global economic reports and a sharp rise in Spanish bond yields at a debt auction weighed on oil prices. Crude oil also lost value on stronger dollar and amid concerns about the outcome of the EU summit.

Gold for immediate delivery is trading 0.7% higher today, at $1,564.55 per ounce. Gold for August delivery fell 1.8% or $28 to end at $1,550.40 per ounce yesterday, as disappointing US economic data and continued scepticism about the two-day EU summit increased the demand for the greenback as a safe haven, dragging gold futures lower.

Currencies

At 0400 BST today, the GBP is trading 0.6% higher against the USD at $1.5604, 0.8% lower against the EUR at €1.2377, and 0.6% higher against the JPY at ¥123.86.

The EUR is trading 1.3% higher against the USD at $1.2598. The EUR is trading 1.3% higher against the JPY at ¥99.94. The EUR is trading higher against most of its major peers, after European policymakers dropped the condition that emergency loans to Spanish banks give their governments preferred creditor status and planned to establish a single financial supervisory mechanism for the eurozone in EU summit.

The JPY is trading lower against the USD, after economic reports showed consumer prices in Japan dropped in May and manufacturing activity shrank in June.

The AUD and NZD are trading higher against the USD, after European leaders announced measures to support funding for Spain, boosting demand for higher-yielding assets. The AUD also rose amid speculation the Reserve Bank of Australia would refrain from lowering its interest rate at a policy meeting on 3 July.

Yesterday, the EUR and the AUD finished lower against the USD, amid speculation that EU policymakers would fail to agree on a strategy to prevent the spread of the sovereign-debt crisis to the bigger economies and Germany unemployment climbed in June for the fourth month this year. However, losses were restricted after the European Union agreed to spend €120 billion to stimulate economic growth and create jobs in the region. The GBP closed lower against the USD and the EUR, after reports showed UK house prices fell in June and the gross domestic product shrank in the first quarter.