July 18, 2012 Financial Market Summary

DJIA gained 0.6% to settle at 12,805.5. NASDAQ added 0.5% to close at 2,910.0. S&P 500 advanced 0.7% to end at 1,363.7.

Nikkei 225 index is trading 0.2% higher, at 8,773.7.

FTSE 100 shed 0.6%, to settle at 5,629.1.

FTSEurofirst 300 index closed 0.2% lower at 1,041.5.

In Asia, crude oil for August delivery is trading 0.6% or $0.51 lower at $88.71 per barrel.

At 0400 BST today, the GBP is trading marginal lower against the USD at $1.5658, slightly lower against the EUR at €1.2737, and marginal lower against the JPY at ¥123.83.

US Market Snapshot

US markets rose yesterday, following better-than-expected corporate earnings report and after the Federal Reserve chief reiterated that the central bank would unveil further stimulus measures if warranted. Aiding the momentum, US industrial production rose in June and home-builder sentiment jumped in July to its highest level since March 2007. Charles Schwab added 2.7%, after its second-quarter earnings rose 16.0%, while Goldman Sachs edged up 0.3%, after its second-quarter earnings surpassed analyst estimates. Coca-Cola rose 1.6%, after it reported second-quarter profit that surpassed market expectations. Walt Disney rallied 3.1%, after Bank of America upgraded its rating on the stock to “Buy” from “Neutral”. Sprint Nextel climbed 5.5%, after Credit Suisse raised its price-target.

DJIA gained 0.6% to settle at 12,805.5. NASDAQ added 0.5% to close at 2,910.0. S&P 500 advanced 0.7% to end at 1,363.7.

Asian Market Snapshot

Asian markets are trading mostly lower this morning, after the US Federal Reserve Chairman Ben Bernanke’s testimony to Congress dashed hopes of another fresh round of quantitative easing and bearish comments from Chinese Premier Wen Jiabao fuelled concerns about the country’s economy. In Japan, Olympus and Canon traded higher, as investors were buoyed on news that there might be dividend hikes in the Japanese precision-equipment sector. In Hong Kong, China Overseas Land & Investment and China Resources Land paced lower, after a report showed a decline in domestic new-home prices in June. In South Korea, Woongjin Energy lost value, on news that the company had cancelled a long-term supply contract with Arise Technologies due to the latter's insolvency.

Nikkei 225 index is trading 0.2% higher, at 8,773.7. Hang Seng index is trading 0.7% lower, at 19,320.2, while the Kospi index is trading 0.7% lower, at 1,810.1.

UK Market Snapshot

UK markets closed lower yesterday, after the US Federal Reserve Chairman Ben Bernanke presented a gloomy outlook for the US economy and failed to signal further monetary easing to support the economy. Concerns about economic growth and its impact on corporate earnings also weighed on the market sentiment. G4S plunged 5.7%, after Bank of America Merrill Lynch downgraded its rating on the stock to “Neutral” from “Buy”. Rio Tinto fell 2.3%, despite reporting strong second-quarter earnings, as it issued a cautious outlook. HSBC Holdings dropped 1.7%, following allegations of money laundering from a Senate subcommittee. Utility, National Grid dropped 3.0%, after Societe Generale trimmed its target price on the stock. Anglo American and Lonmin dropped 1.1% and 1.5%, respectively, following reports that Eskom, South Africa’s state-owned power monopoly, was mulling to raise electricity tariffs.

FTSE 100 shed 0.6%, to settle at 5,629.1, while FTSE 250 fell 0.5%, to close at 11,019.2.

European Market Snapshot

Other European markets closed mostly lower yesterday, as investors were disappointed by the lack of stimulus details from US Fed Chairman Ben Bernanke in his testimony to the Senate Banking panel. However, some losses were pared on better-than-expected investor confidence data from Germany. Deutsche Boerse dropped 0.5%, after Commerzbank and DZ Bank, both reduced their price target on the stock, while Bankia plunged 13.4%, after the Spanish government stated that it could take longer to inject new capital into the bank. Alcatel-Lucent plunged 19.8%, after the company posted a loss in its second- quarter. However, Volkswagen gained 0.4%, after a report showed a rise in new-car registrations in the first-half of 2012.

FTSEurofirst 300 index closed 0.2% lower at 1,041.5. German DAX Xetra 30 added 0.2% to 6,577.6. French CAC-40 closed 0.1% lower at 3,177.0..

Commodities

In Asia, crude oil for August delivery is trading 0.6% or $0.51 lower at $88.71 per barrel. Yesterday, crude oil for August delivery gained 0.9% or 79 cents to settle at $89.22 per barrel, as tension intensified between Iran and the US, after the former warned against the latter’s military deployment in the Gulf and as the US dollar fell against other currencies. However, gains were capped, after the US Federal Reserve Chairman, Ben Bernanke, failed to signal another round of quantitative easing in a Senate committee.

Gold for immediate delivery is trading 0.2% lower today, at $1,582.07 per ounce. Gold for August delivery declined 0.1% or $2.10 to settle at $1,589.50 per ounce yesterday, as the US Federal Reserve Chairman, Ben Bernanke, refrained from introducing another round of monetary easing in his testimony before Congress. However, a weaker dollar kept losses under check.

Currencies

At 0400 BST today, the GBP is trading marginal lower against the USD at $1.5658, slightly lower against the EUR at €1.2737, and marginal lower against the JPY at ¥123.83. The GBP is trading lower against its major peers, amid rising expectations that the Bank of England would take additional steps to ease monetary policy following dismal consumer prices data.

The EUR is trading slightly lower against the USD at $1.2294, before Germany’s lower-house lawmakers vote tomorrow on aid to recapitalise Spanish banks. Earlier, the USD was trading lower against the EUR, before the release of the Fed Beige book outlining the US economic conditions. 

The US commerce department is expected to report data on housing starts today, while the US Labour Department would report weekly initial jobless claims data tomorrow.

The EUR is trading marginal lower against the JPY at ¥97.22.

Yesterday, the USD ended lower against the EUR and the GBP. However, earlier in the trading session, the USD was trading higher against the EUR and the GBP, after the US Federal Reserve Chairman Ben Bernanke provided no hints of another round of monetary stimulus to support the economy.

The GBP closed higher against the EUR, as ongoing concerns over eurozone debt crisis encouraged investors to opt for relatively safer currency. However, the GBP was trading lower against the USD and the EUR earlier in the session, after data revealed that UK annual consumer prices inflation eased unexpectedly in June, boosting speculation that the Bank of England would take further steps to ease monetary policy.

The AUD ended higher against the USD, after the Reserve Bank of Australia’s policy meeting.