July 17, 2012 Financial Market Summary

DJIA slid 0.4% to settle at 12,727.2. NASDAQ lost 0.4% to close at 2,896.9. S&P 500 edged down 0.2% to end at 1,353.6.

Nikkei 225 index is trading 0.6% higher, at 8,774.5.

FTSE 100 edged down 0.1% to close at 5,662.4.

FTSEurofirst 300 index added 0.1% to 1,043.7.

In Asia, crude oil for August delivery is trading 0.1% or $0.11 higher at $88.54 per barrel.

At 0400 BST today, the GBP is trading 0.2% higher against the USD at $1.5665, slightly higher against the EUR at € 1.2740, and 0.3% higher against the JPY at ¥ 123.62.

US Market Snapshot

US markets modestly retreated yesterday, as the IMF trimmed its 2013 forecast for global economic growth and after retail sales fell unexpectedly for the third straight month in June. Alpha Natural Resources and Arch Coal fell 10.2% and 3.9%, as a broker downgraded its rating on both the stocks. China-exposed baby formula maker, Mead Johnson Nutrition declined 5.2%, after RBC Capital Markets downgraded its rating on the stock to “Sector Perform”, lowering its target price. General Motors declined 1.2%, amid media reports that the company expects substantial losses in Europe for the rest of the year. Walmart, Procter & Gamble and Best Buy slipped between 0.3% and 0.5%, as US retail sales slid 0.5% MoM in June. General Electric lost 0.9%, after Morgan Stanley issued a negative outlook on the stock, citing its relative valuation.

DJIA slid 0.4% to settle at 12,727.2. NASDAQ lost 0.4% to close at 2,896.9. S&P 500 edged down 0.2% to end at 1,353.6.

Asian Market Snapshot

Asian markets are trading higher this morning, after the IMF raised Japan’s growth forecast and amid optimism that policymakers from China to the US would stimulate the world’s largest economies. In Japan, Astellas Pharma gained value, after Nomura Holdings upgraded the stock to “Neutral”. In Hong Kong, HSBC Holdings traded higher, despite a US Senate panel allegations that its staff ignored warnings of money-laundering activity at the bank. China Railway Group gained value, after the Chinese government boosted this year’s railway infrastructure investment plan. In South Korea, Hyundai Heavy Industries gained value, after it sold 3.2 million shares in automaker Hyundai Motor to improve its financial health.

Nikkei 225 index is trading 0.6% higher, at 8,774.5. Hang Seng index is trading 1.5% higher, at 19,403.2, while the Kospi index is trading 0.6% higher, at 1,829.4.

UK Market Snapshot

UK markets closed on a mixed note yesterday, with the FTSE 100 drifting lower, as investors remained concerned about corporate earnings outlook and as investigations intensified into allegations of interest-rate manipulation. Losses were further compounded after the International Monetary Fund (IMF) slashed the UK’s growth forecast for 2012, more than any other major economy. G4S tumbled 8.7%, after it projected a loss between £35 million and £50 million in Olympics contract, as it struggled to provide the necessary workforce numbers. Rio Tinto lost 1.1%, while BHP Billiton fell 0.6%, as UBS trimmed their target prices. Mining peers, Vedanta Resources, Randgold Resources, Polymetal International and Kazakhmys dropped between 1.9% and 2.2%, amid concerns over the Chinese economy. However, Firstgroup gained 5.4%, on Government's infrastructure spending boost.

FTSE 100 edged down 0.1% to close at 5,662.4, while FTSE 250 ticked up 0.3% to settle at 11,075.3.

European Market Snapshot

Other European markets closed mostly higher yesterday, after a report indicated that manufacturing in the New York region expanded more-than-expected in July. However, gains were capped, as the IMF lowered its 2013 global growth forecast and following dismal US retail sales data. Metro gained 2.3%, after UBS upgraded its rating on the stock to “Neutral” from “Sell”. Delta Lloyd advanced 1.6%, as Citigroup upgraded its rating on the stock to “Buy” from “Neutral”. Skandinaviska Enskilda Banken climbed 8.2%, after the banks’ second-quarter earnings surpassed market expectations. However, Banco Santander, BBVA and Commerzbank dropped between 0.9% and 3.3%, after the Wall Street Journal reported that the European Central Bank (ECB) is now advocating the imposition of losses on senior debt holders.

FTSEurofirst 300 index added 0.1% to 1,043.7. German DAX Xetra 30 gained 0.1% to 6,565.7. French CAC-40 closed 0.9 points lower at 3,179.9.

Commodities

In Asia, crude oil for August delivery is trading 0.1% or $0.11 higher at $88.54 per barrel. Yesterday, crude oil for August delivery rose 1.5% or $1.33 to settle at $88.43 per barrel, amid prospects for additional monetary stimulus in China and the US, and as investors remained cautious ahead of the US Federal Reserve Chairman Ben Bernanke's testimony to Congress the next day. However, disappointing US retail sales data weighed on market sentiment and limited gains in crude oil prices.

Gold for immediate delivery is trading 0.2% higher today, at $1,593.73 per ounce. Gold for August delivery declined 40 cents to settle at $1,591.60 per ounce yesterday, as investors cautiously looked forward to remarks from the US Fed chief Tuesday which is expected to provide more cues on whether the central bank would launch more monetary stimulus.

Currencies

At 0400 BST today, the GBP is trading 0.2% higher against the USD at $1.5665, slightly higher against the EUR at € 1.2740, and 0.3% higher against the JPY at ¥ 123.62. Investors await data on UK consumer prices and retail sales, both for June.

The EUR is trading 0.2% higher against the USD at $1.2296. The EUR is trading 0.3% higher against the JPY at ¥ 97.04.

The EUR is trading lower against the GBP, ahead of a report which is expected to show confidence deteriorated among German investors in July.

The USD is trading lower against the GBP and the EUR, amid rising expectations that the US Federal Reserve Chairman Ben S. Bernanke would signal at further monetary easing in his testimony before the Congress.

The JPY is trading lower against most of its major peers, after Japanese Finance Minister, Azumi stated that he would take firm measures on domestic currency appreciation.

Yesterday, the USD ended lower against its major peers, after a report revealed an unexpected drop in US retail sales for June, boosting speculation that the Fed would introduce additional monetary easing to support the economy growth. Earlier in the session, the USD was trading higher the EUR, after the Wall Street Journal report that the European Central Bank (ECB) has advocated imposing losses on holders of senior bonds issued by Spain's most troubled banks. The GBP ended higher against the EUR, as investors remained worried about growing risks to Italy and Spanish banking sector, boosting demand for the relatively safe UK currency. The CAD ended lower against most of its major counterpart, after Canada existing home sales fell in June and following dismal US retail sales data.