July 10, 2012 Financial Market Summary

DJIA edged down 0.3% to settle at 12,736.3. NASDAQ ticked down 0.2% to close at 2,931.8. S&P 500 inched 0.2% lower to end at 1,352.5.

Nikkei 225 index is trading 0.3% higher at 8,920.6.

FTSE 100 slid 0.6% to close at 5,627.3.

FTSEurofirst 300 index fell 0.4% to 1,030.1.

In Asia, crude oil for August delivery is trading 1.5% or $1.29 lower at $84.70 per barrel.

At 0400 BST today, the GBP is trading 0.2% lower against the USD at $1.5504, 0.1% higher against the EUR at €1.2613, and 0.2% lower against the JPY at ¥123.29.

US Market Snapshot

US markets closed lower yesterday, with the S&P 500 index extending its losses for the third day, as a surge in Italian and Spanish bond yields reflected signs that investors remained concerned about the ability of European policymakers to deal with the region’s debt crisis and ahead of quarterly results from Alcoa. Industrial and energy shares led the declines, with Chevron, Exxon Mobil, Caterpillar and DuPont dropping between 0.6% and 2.9%, as investors remained pessimistic about earnings. Alpha Natural Resources, the top laggard on the S&P 500 index, slumped 7.5%, amid a selloff in coal related shares after peer, Patriot Coal filed for bankruptcy. Patriot Coal nosedived 72.1%. Visa and MasterCard fell 1.3% and 2.4%, respectively, after being downgraded at UBS, citing concerns over their earnings.

DJIA edged down 0.3% to settle at 12,736.3. NASDAQ ticked down 0.2% to close at 2,931.8. S&P 500 inched 0.2% lower to end at 1,352.5.

Asian Market Snapshot

Asian markets are trading mostly lower this morning, as disappointing Chinese trade data increased concerns about China’s economic growth, outweighing report that eurozone Finance Ministers had agreed on aid for Spain. In Japan, Furukawa-Sky Aluminum gained value, after its US peer Alcoa reported better-than-expected quarterly profits. However, Mitsubishi UFJ Financial eased amid report that its core banking unit had suspended two traders suspected of prior involvement in the LIBOR manipulation. In Hong Kong, retailer, Li Ning traded lower after the company announced that its licensee LN Plus Iberoamerica had filed for bankruptcy. In South Korea, Hyundai Motor lost value, after a consumer watchdog in the US sued the company for allegedly misleading consumers.

Nikkei 225 index is trading 0.3% higher at 8,920.6. Hong Kong index is trading 0.3% lower, at 19,377.6, while the Kospi index is trading 0.5% lower, at 1,827.9.

UK Market Snapshot

UK markets declined yesterday, as a rise in Spanish bond yields renewed fears of contagion among investors before the European officials meet in Brussels to discuss on potential measures to contain the debt crisis. Engineering Group, IMI fell 3.3%, amid fears that Eurozone’s debt crisis would impact its earnings. Resources, ENRC and Anglo American lost between 1.9% and 2.9%, following reports that inflation in China eased in June as industrial demand fell. Xstrata dropped 2.2%, on a media report that the shareholder vote on its proposed merger with Glencore might be delayed until September. Burberry fell 2.6%, on demand concerns from China. Barclays lost 0.8%, as investors continued to fret over the LIBOR fixing scandal. Kenmare Resources dropped 10.3%, after its Australian peer Iluka Resources cut its sales outlook for the second-half of the year.

FTSE 100 slid 0.6% to close at 5,627.3, while FTSE 250 also shed 0.8% to settle at 10,983.3.

European Market Snapshot

Other European markets closed lower yesterday, as Spanish bond yields surged ahead of eurozone Finance Ministers meet in Brussels to discuss measures to contain the region’s debt crisis. Moreover, dismal Japanese machinery orders data and concerns about China’s economic growth weighed on market sentiment. Bankia, Banco Santander and Deutsche Bank lost between 0.9% and 1.8%, as risk appetite faded among investors. Metro dropped 6.3%, after its Chief Executive stated that there would be a “small increase at best” in German consumption this year. BASF fell 1.1%, after Societe Generale lowered its price target on the stock. However, Telecom Italia and France Telecom advanced 3.9% and 0.9%, respectively, after Nomura upgraded its rating on the sector to “Neutral” from “Underweight”.

FTSEurofirst 300 index fell 0.4% to 1,030.1. German DAX Xetra 30 dropped 0.4% to 6,387.6. French CAC-40 closed 0.4% lower at 3,156.8.

Commodities

In Asia, crude oil for August delivery is trading 1.5% or $1.29 lower at $84.70 per barrel. Yesterday, crude oil prices for August delivery gained $1.54 to settle at $85.99 per barrel, on expectations China would further ease monetary policy to support its economy and after a labour strike threatened to halt all offshore oil and gas production in Norway. Crude oil also gained value, after some Iranian policymakers proposed for tariffs on ships sailing through the Strait of Hormuz further increasing tensions between Iran and the Western powers.

Gold for immediate delivery is trading 0.2% lower today, at $1,585.48 per ounce.  Gold for August delivery rose 0.7% or $10.20 to end at $1,589.10 per ounce yesterday, as Spanish bond yield surged to unsustainable levels and after China’s inflation data came-in below market expectations in June, signalling prospects for further monetary policy easing by the central bank to stave off a slowdown.

Currencies

At 0400 BST today, the GBP is trading 0.2% lower against the USD at $1.5504, 0.1% higher against the EUR at €1.2613, and 0.2% lower against the JPY at ¥123.29. The RICS reported that UK house prices fell in June, while BRC reported that UK retail sales rose less-than-expected in June.

The EUR is trading 0.2% lower against the USD at $1.2291, ahead of reports which are expected to show that manufacturing in France and Italy fell in May.

The EUR is trading 0.3% lower against the JPY at ¥97.74, after the European Union Economic and Monetary Affairs Commissioner, Olli Rehn stated that Spain would have to take additional measures soon to meet budget targets.

The AUD and NZD are trading lower against the USD, after reports showed that imports in China rose less than estimated in June. However, the NZD capped losses, after data showed that New Zealand’s house prices climbed to a record in June.

Yesterday, the EUR ended higher against the USD and the GBP, after the European Central Bank (ECB) President Mario Draghi told a European Parliament committee that euro-zone leaders have made important progress on reforms aimed at addressing the causes of the region’s debt crisis and as eurozone Finance Ministers agreed on aid for Spain.

The JPY finished higher against the USD, after the Bank of Japan (BoJ) reported that the value of M2 money stock in Japan rose 2.2% in June, compared to an upwardly revised increase of 2.2% posted in May.