July 31, 2012 Financial Market Summary

DJIA edged down marginally to settle at 13,073.0. NASDAQ ticked down 0.4% to close at 2,945.8. S&P 500 slipped marginally to end at 1,385.3.

Nikkei 225 index is trading 0.5% higher at 8,679.5.

FTSE 100 surged 1.2% to close at 5,693.6.

FTSEurofirst 300 index advanced 1.6% to 1,073.0.

In Asia, crude oil for September delivery is trading 0.3% or $0.24 higher at $90.02 per barrel.

At 0400 BST today, the GBP is trading 0.1% higher against the USD at $1.5723, 0.1% lower against the EUR at €1.2798, and 0.2% higher against the JPY at ¥122.95.

US Market Snapshot

US markets ended lower yesterday, as investors remained cautious ahead of the central bank meeting and release of a slew of domestic economic data. JPMorgan declined 2.0%, following a downgrade at Deutsche Bank from “Buy” to “Hold”. Retailer, Abercrombie & Fitch, slated to release its second-quarter sales report on Thursday, dropped 3.7%, as Morgan Stanley reduced its earnings estimate. Flooring maker, Armstrong World Industries tumbled 12.8%, as the company lowered its full-year guidance for both earnings and revenue, following downbeat second-quarter results. Insurance firm, Loews slumped 5.2%, after reporting a sharp drop in its second-quarter earnings. However,, Supervalu surged 12.6%, as it ousted its CEO and named Wayne Sales as chairman to succeed him in an effort to speed up a lagging turnaround.

DJIA edged down marginally at 13,073.0. NASDAQ ticked down 0.4% to close at 2,945.8. S&P 500 slipped marginally to end at 1,385.3.

Asian Market Snapshot

Asian markets are trading higher this morning, amid optimism that the US Federal Reserve and the ECB would hint at monetary easing measures to stimulate economic growth. In Japan, Canon traded higher, as it unveiled a share buyback plan of ¥50 billion, while Panasonic paced gain, amid optimism that it would report higher net profit, after the market close today. Hitachi gained value as its first-quarter operating profit surpassed market expectation. In Hong Kong, Hang Lung Properties and China Resources Power Holdings are trading higher, amid hopes for near-term monetary easing. In South Korea, troubled shipbuilders jumped on bargain-hunting, with STX Offshore & Shipbuilding and Hyundai Heavy Industries gaining values.

Nikkei 225 index is trading 0.5% higher at 8,679.5. Kospi index is trading 1.3% higher at 1,867.6. Hang Seng index is trading 0.8% higher at 19,734.8.

UK Market Snapshot

UK markets rallied yesterday, led by gains in banking and commodity sector stocks, amid optimism that major central banks would unveil near-term stimulus to support economic growth. International Airlines Group surged 7.2%, after its peer Air France halved its operating loss in second-quarter. Mining firms underpinned gains, with Rio Tinto, Kazakhmys, Vedanta Resources and ENRC climbing between 1.6% and 4.5%, as base metal prices edged up during the London session. Global banking group, HSBC gained 2.3%, as it reported an 11% rise in its pre-tax profit in the first-half. Barclays, Lloyds Banking Group and RBS rose between 2.1% and 3.6%, as risk appetite improved amongst investors. National Grid added 1.1%, as it maintained its guidance for the full year. Aviva rose 4.4%, following weekend reports that it might dispose its US business for around £1.0 billion.

FTSE 100 surged 1.2% to close at 5,693.6, while FTSE 250 added 0.5% to end at 11,238.9.

European Market Snapshot

Other European markets closed higher yesterday, amid expectations the European Central Bank (ECB) would take action to contain the region’s debt crisis, including buying government debt to rein in high borrowing costs. Air France rallied 19.0%, after it posted a narrower-than-expected second-quarter loss. Banks, Credit Agricole, Societe Generale, Commerzbank and Deutsche Bank surged between 2.0% and 7.0%, as risk appetite improved among investors. ArcelorMittal advanced 5.4%, after its CEO Lakshmi Mittal stated that the company might shut more plants and make further redundancies. Siemens rose 3.4% after a report stated that ThyssenKrupp would not merge with the company. K+S gained 2.7%, after it reported second-quarter results that surpassed market expectations.

FTSEurofirst 300 index advanced 1.6% to 1,073.0. German DAX Xetra 30 rose 1.3% to 6,774.1. French CAC-40 closed 1.2% higher at 3,320.7.

Commodities

In Asia, crude oil for September delivery is trading 0.3% or $0.24 higher at $90.02 per barrel. Yesterday, crude oil for September delivery dropped 0.4% or $0.35 to settle at $89.78 per barrel, as the dollar advanced against the euro, and as an unexpected drop in Japan’s industrial production and dismal European economic confidence data sparked worries over demand outlook. Oil prices also fell, as investors remained cautious ahead of the outcome of US Federal Reserve, Bank of England and ECB’s meetings due in this week.

Gold for immediate delivery is trading 0.2% higher today, at $1,624.15 per ounce. Gold for August delivery settled up $0.70 at $1,618.70 per ounce yesterday, on rising expectations that the US Federal Reserve and the ECB would take further steps to spur economic growth.

Currencies

At 0400 BST today, the GBP is trading 0.1% higher against the USD at $1.5723, 0.1% lower against the EUR at €1.2798, and 0.2% higher against the JPY at ¥122.95, ahead of Bank of England’s policy makers meet starting tomorrow.

The EUR is trading 0.2% higher against the USD at $1.2285. The EUR is trading 0.3% higher against the JPY at ¥96.08. However, earlier in the session, the EUR traded lower, ahead of reports this week which are expected to show that eurozone jobless rate rose to a record high in June and manufacturing activity shrank in July. Investors also remained concerned ahead of the outcome of the ECB’s Governing Council meets this week.

The USD is trading lower against the JPY, amid speculation that US Federal Reserve policy makers might signal another round of monetary stimulus in a two-day meeting that starts today.

The AUD is trading higher against its major peers, after a report indicated that the number of building approvals in Australia fell less-than-expected in June.

Yesterday, the EUR ended lower against the USD, as investor speculated that European officials’ pledge to preserve the euro and ECB’s bond purchases program would not be enough to solve worsening debt crisis in the region. However, the demand for the USD was tempered amid speculation of further monetary easing by US Federal Reserve.

The JPY ended higher against the USD. However, in earlier trading session, the JPY was trading lower against the USD, after data revealed an unexpected drop in Japan’s monthly industrial production in June.