July 12, 2012 Financial Market Summary

DJIA fell 0.4% to settle at 12,604.5. NASDAQ slid 0.5% to close at 2,888.0. S&P 500 closed unchanged at 1,341.5.

Nikkei 225 index is trading 1.0% lower at 8,765.4.

FTSE 100 edged up marginally to close at 5,664.5.

FTSEurofirst 300 index closed unchanged at 1,039.1.

In Asia, crude oil for August delivery is trading marginally higher at $85.83 per barrel.

At 0400 BST today, the GBP is trading marginally higher against the USD at $1.5510, slightly higher against the EUR at €1.2671, and 0.1% lower against the JPY at ¥123.34.

US Market Snapshot

US markets ended on a lower note yesterday, with the DJIA and the NASDAQ losing ground, after minutes of the Federal Reserve's latest meeting offered little hopes about further monetary easing to boost the sluggish economy. DuPont slipped 1.1%, after Macquarie Group downgraded the stock to “Neutral” from “Outperform”. Google dropped 1.8%, amid speculation the company might report second-quarter sales below analysts’ estimates. HHGregg plunged 36.4%, as it cut its full-year forecast, while peer, Best Buy slumped 8.4%. Telecommunications equipment provider, Adtran tumbled 15.4%, as its second-quarter earnings missed estimates. Goldcorp slipped 9.7%, as it reduced full-year gold-production guidance. However, Abercrombie & Fitch gained 4.1%, amid speculation that it might launch a “massive” buyback programme.

DJIA fell 0.4% to settle at 12,604.5. NASDAQ slid 0.5% to close at 2,888.0. S&P 500 closed unchanged at 1,341.5.

Asian Market Snapshot

Asian markets are trading lower this morning, as the US Federal Reserve meeting minutes showed no imminent plans for easing and a surprise interest rate cut by the South Korean central bank added to global economic concerns. Investors also remained cautious ahead of a key growth data from China and interest rate decision from the Bank of Japan on Friday. In Japan, Tokyo Electric lost value, on news that its reactor clean-up would cost ¥1.0 trillion. In Hong Kong, Kingway Brewery Holdings paced lower, after the company forecasted significant loss for the first-half of 2012. In South Korea, carmakers, Hyundai Motor and Kia Motors traded lower after workers at the former voted to stage their first strike in four years.

Nikkei 225 index is trading 1.0% lower at 8,765.4. Hong Kong index is trading 1.7% lower, at 19,090.1, while the Kospi index is trading 0.7% lower, at 1,813.8.

UK Market Snapshot

UK markets closed modestly lower yesterday, as concern about corporate earnings offset optimism over the highly-anticipated minutes of the latest FOMC meeting that might hint at additional round of stimulus. Burberry dropped 7.4%, after its first-quarter sales growth trailed market estimates, prompting Bank of America Merrill Lynch to cut its earnings estimates. Johnson Matthey declined 3.0%, after its US peer, Cummins cut its revenue forecast. Banking major, Lloyds Banking Group dropped 0.9%, after a broker reduced its rating to “Sell”. Polymetal International declined 4.9%, as it lost a legal row regarding a hedging contract, resulting in payment of $27 million in additional taxes. However, ARM Holdings rose 1.6%, after Bank of America resumed its coverage on the stock with a “Buy” recommendation. ICAP gained 1.2%, after the company forecasted full-year earnings in line with analyst estimates.

FTSE 100 edged up marginally to close at 5,664.5, while FTSE 250 fell 0.9% to settle at 10,967.8.

European Market Snapshot

Other European markets closed mixed yesterday, as investors awaited minutes from the US Federal Reserve’s latest meeting for signs of further stimulus measures to boost economic growth. PPR and LVMH dropped 3.5% and 3.2%, respectively, after their UK peer, Burberry Group reported lower-than-estimated first-quarter sales. Renault, BMW and Daimler lost between 0.8% and 1.2%, after US truck maker, Cummins trimmed its full-year revenue forecast. Mediaset retreated 3.3%, after Societe Generale downgraded its rating on the stock to “Sell” from “Hold”. However, among banks, BBVA rose 2.3%, after Nomura upgraded its rating on the bank to “Buy” from “Reduce”, while Banco Santander, Credit Agricole BNP Paribas gained between 1.5% and 1.7%, amid improved risk appetite among investors.

FTSEurofirst 300 index closed unchanged at 1,039.1. German DAX Xetra 30 added 0.2% to 6,453.9. French CAC-40 closed 0.6% lower at 3,157.3.

Commodities

In Asia, crude oil for August delivery is trading marginally higher at $85.83 per barrel. Yesterday, crude oil for August delivery added 2.3% or $1.90 to $85.81 per barrel, after the US Energy Information Administration reported that crude inventories declined more-than-expected 4.7 million barrels in the week ended 6 July. However, crude oil pared some of the gains, after the US Federal Reserve meeting minutes suggested no imminent likelihood of a third round of monetary easing.

Gold for immediate delivery is trading 0.3% lower today, at $1,572.23 per ounce. Gold for August delivery slipped 0.3% or $4.10 to settle at $1,575.70 per ounce yesterday, as the dollar appreciated against the euro, after minutes from the Federal Reserve’s latest meeting showed that only few officials were in favour of more asset purchases to stimulate the country’s economy.

Currencies

At 0400 BST today, the GBP is trading marginally higher against the USD at $1.5510, slightly higher against the EUR at €1.2671, and 0.1% lower against the JPY at ¥123.34.

The EUR is trading slightly lower against the USD at $1.2241. The EUR is trading 0.1% lower against the JPY at ¥97.34.

The EUR is trading lower against the USD and the JPY, ahead of a report which is expected to show that manufacturing output in the eurozone remained stagnant in May.

The JPY is trading higher against its major counterparts, on speculation that the Bank of Japan would refrain from taking steps to stem the currency’s gains as it concludes a meeting today and as signs of a global economic slowdown boosted demand for safe haven currency.

The AUD is trading lower against the USD, after data revealed that Australian payrolls dropped by 27,000 in June, following a revised 27,800 gain recorded in May and the unemployment rate climbed to 5.2% in June.

Yesterday, the USD ended higher against most of its peers, after minutes of the Federal Reserve’s June meeting disappointed speculation that policy makers would signal at more monetary stimulus. The minutes showed only a few policy makers supported the need for further action to boost the economy. The GBP closed higher against the EUR, as investors preferred the relative safety of the British currency, amid speculation that legislation needed for Europe’s permanent bailout fund would be delayed. The AUD ended higher against its major counterparts, after a report showed that consumer confidence in Australia reached a five-month high in July.