July 13, 2012 Financial Market Summary

DJIA edged down 0.2% to settle at 12,573.3. NASDAQ fell 0.8% to close at 2,866.2. S&P 500 slid 0.5% to end at 1,334.8.

Nikkei 225 index is trading 0.1% lower at 8,715.8.

FTSE 100 shed 1.0% to close at 5,608.3.

FTSEurofirst 300 index dropped 1.0% to 1,028.8.

In Asia, crude oil for August delivery is trading 0.2% or $0.17 lower at $85.91 per barrel.

At 0400 BST today, the GBP is trading marginally higher against the USD at $1.5432, slightly lower against the EUR at €1.2651, and 0.1% higher against the JPY at ¥122.46.

US Market Snapshot

US markets closed lower yesterday, as mounting worries over corporate earnings and sluggish global economy jittered investor sentiment, shrugging off data that showed unemployment claims last week fell to the lowest level in more than four years. JPMorgan Chase dropped 1.6%, amid speculation that the company might report a drop in its second-quarter profits. Supervalu slumped 49.2%, as the firm stated that it would mull strategic alternatives like selling full or part of its business and suspended its dividend. Marriott International fell 6.4%, a day after it trimmed its outlook for growth outside North America. Insurer, Progressive dropped 5.0%, as it reported a larger-than-expected drop in its second quarter earnings. Delta Air Lines and United Continental Holdings slipped 3.1% and 4.1%, respectively, after Goldman Sachs initiated coverage on both the stocks with a “Sell” rating.

DJIA edged down 0.2% to settle at 12,573.3. NASDAQ fell 0.8% to close at 2,866.2. S&P 500 slid 0.5% to end at 1,334.8.

Asian Market Snapshot

Asian markets are trading mostly higher this morning, after data showed that China’s second-quarter GDP growth was  in line with market expectations overshadowing concerns about the US and eurozone economies. In Japan, Dentsu traded lower, after the company agreed to buy UK based Aegis Group for about £3.16 billion. In Hong Kong, Belle International Holdings gained value, after the company reported an upbeat second-quarter sales. In South Korea, E-Mart gained value, after it mulled to acquire NS Home Shopping's Super Supermarket, NS Mart. NCsoft traded higher, after a broker stated that recent concerns over the success of the company’s new game and its second quarter earnings are overdone.

Nikkei 225 index is trading 0.1% lower at 8,715.8. Hong Kong index is trading 0.2% higher, at 19,059.9, while the Kospi index is trading 0.7% higher, at 1,797.3.

UK Market Snapshot

UK markets dropped yesterday, weighed by declines in mining sector stocks, amid speculation that China’s second-quarter GDP data would point to a slowdown in the country and as minutes from the US FOMC meeting gave no hint of additional stimulus. Antofagasta and ENRC dropped 4.0% and 4.2%, respectively, amid concern a slowdown in China would affect demand for metals. Rio Tinto slid 3.5%, after it announced that its CFO, Guy Elliot, would retire at the end of 2013. BHP Billiton lost 3.3%, after Credit Suisse downgraded the stock to “Neutral” from “Outperform”. Ashmore Group slumped 6.7%, as its AUM dropped 3.3% at the end of June-quarter. InterContinental Hotels dropped 3.0%, after its peer, US based Marriott, cut its sales guidance. G4S declined 2.6%, as it stated that it would be struggling to meet staffs-obligation at the Olympics, ahead of a fortnight.

FTSE 100 shed 1.0% to close at 5,608.3, while FTSE 250 fell 0.4% to settle at 10,924.1.

European Market Snapshot

Other European markets closed lower yesterday, after minutes from the US Federal Reserve’s latest policy meeting failed to signal more stimulus measures to boost economic growth. Moreover, investors remained cautious ahead of the Chinese GDP data, shrugging off upbeat labour market report from the US. Commerzbank, Deutsche Bank and Credit Agricole lost between 1.6% and 2.6%, after the European Central Bank (ECB) issued cautious comments about the eurozone. Telecom Italia dropped 6.5%, after a broker forecasted a drop in its Latin American sales for 2013. Temenos Group plunged 28.1%, after it reduced its estimate for 2012 revenue growth and stated that its CEO would step down, while Capgemini dropped 2.9%, after Credit Suisse initiated coverage on the stock with an “Underperform” rating.

FTSEurofirst 300 index dropped 1.0% to 1,028.8. German DAX Xetra 30 fell 0.5% to 6,419.4. French CAC-40 closed 0.7% lower at 3,135.2.

Commodities

In Asia, crude oil for August delivery is trading 0.2% or $0.17 lower at $85.91 per barrel. Yesterday, crude oil for August delivery advanced 0.3% or 31 cents to settle at $86.08 per barrel, amid concern about supply disruptions, as the US announced more sanctions on Iran and after the US Labour Department reported that unemployment claims last week fell to their lowest level in more than four years. However, a rise in dollar and continued concern about the global economy capped gains.

Gold for immediate delivery is trading 0.1% higher today, at $1,570.90 per ounce. Gold for August delivery retreated 0.7% or $10.40 to settle at $1,565.30 per ounce yesterday, as the dollar rose against the major currencies and investors remained cautious on indications that the US Fed is unlikely to ease policies until US economic conditions deteriorate further.

Currencies

At 0400 BST today, the GBP is trading marginally higher against the USD at $1.5432, slightly lower against the EUR at €1.2651, and 0.1% higher against the JPY at ¥122.46.

The EUR is trading 0.1% higher against the USD at $ 1.2198. However, earlier in the session, the EUR was trading lower against the USD, after Moody’s Investors Services cut Italy’s bond rating before the nation sells debt today.

The EUR is trading 0.1% higher against the JPY at ¥96.80. However, earlier in the session, the JPY was trading higher against the EUR, as signs global growth is slowing boosted demand for safe haven currency.

The AUD is trading higher against the USD, after the National Bureau of Statistics reported that China’s GDP expanded 7.6% in the second quarter of 2012.

Yesterday, the USD and the JPY ended higher against their major peers, as dampened expectations for further easing measures by the US Federal Reserve weighed on investor confidence and boosted the safe-haven appeal of the USD and the JPY. The USD also rose, after a report revealed that US jobless claims fell to its lowest level in four years last week.

The EUR ended lower against the USD, after Italian and Spanish bond yields surged amid nervousness ahead of an Italian bond auction on Friday and as the European Central Bank (ECB) stated that the risks surrounding the economic outlook for the Euro-area continue to be on the downside. The JPY closed higher against the USD, after the Bank of Japan left interest rates unchanged at a policy meeting and reaffirmed its commitment to steadily increasing the size of its asset-purchase program.