Wednesday, 1 August 2012

August 01, 2012 Financial Market Summary

DJIA shed 0.5% to settle at 13,008.7. NASDAQ ticked down 0.2% to close at 2,939.5. S&P 500 inched 0.4% lower to end at 1,379.3.
Nikkei 225 index is trading 1.1% lower at 8,601.6.
FTSE 100 shed 1.0%, to settle at 5,635.3.
FTSEurofirst 300 index eased 0.9% to 1,063.4.
In Asia, crude oil for September delivery is trading 0.3% or $0.22 lower at $87.84 per barrel.
At 0400 BST today, the GBP is trading marginally higher against the USD at $1.5674, slightly higher against the EUR at €1.2748, and 0.2% lower against the JPY at ¥122.23.
US Market Snapshot
US markets slid modestly yesterday, ahead of the Federal Reserve policy decision on Wednesday, as investors remained concerned that any additional monetary stimulus by the US central bank would not be enough to bolster the domestic economy. Coach tumbled 18.6%, leading the laggards on the S&P 500 index, as its fourth-quarter sales missed market expectations. Peer, Tiffany & Co shed 4.0%. Health-insurer, Humana slumped 12.7%, as it reported a drop in its second-quarter profit and lowered its full-year profit outlook. Facebook shares reached another new low, declining 6.2%, as investors continued to fret over its last week's earnings report that showed a deceleration in user growth and as the company issued no guidance. 3-D technology company, RealD plunged 23.0%, as its first-quarter income trailed analyst estimates.
DJIA shed 0.5% to settle at 13,008.7. NASDAQ ticked down 0.2% to close at 2,939.5. S&P 500 inched 0.4% lower to end at 1,379.3.
Asian Market Snapshot
Asian markets are trading mostly lower this morning tracking negative cues from Wall Street overnight, as China’s manufacturing activity expanded at the slowest pace in eight months and after South Korea's exports fell sharply from a year earlier in July. In Japan, shipbuilder, Sumitomo Heavy Industries slumped as it cut its profit outlook sharply, while construction machinery maker, Komatsu is traded lower as it posted an 18.5% year-on-year drop in its quarterly operating profit in April-June period. In Hong Kong, Sands China is trading lower, amid a report that one of its subsidiary was being investigated by the Macau government in connection with the transfer of some data to the US. In South Korea, Retailer Hyundai Department Store declined after it reported a 6.9% fall in operating profit for the second-quarter.
Nikkei 225 index is trading 1.1% lower at 8,601.6. Hang Seng index is trading 0.1% higher at 19,817.6.Kospi index is trading 0.2% lower at 1,878.4.
UK Market Snapshot
UK markets closed lower yesterday, after Germany ruled out granting a banking license for Europe's permanent bailout fund and ahead of the central-bank meetings. BP slumped 4.4%, after it posted second-quarter profit that missed market expectations. Tullow Oil, BG Group and Petrofac eased between 0.8% and 3.2%, tracking a drop in crude oil prices. Banks, Royal Bank of Scotland, Standard Chartered, Lloyds Banking and HSBC Holdings declined between 1.7% and 3.8%, as risk appetite decreased among investors. CRH plunged 5.8%, amid concerns, after its German sector peer HeidelbergCement lowered its 2012 guidance for US aggregates volumes. Shire dropped 3.9%, amid discussions that it could cut growth guidance following the launch of a generic version of its drug. ITV declined 1.7%, after Deutsche Bank downgraded the stock to “Sell” from “Hold”.
FTSE 100 shed 1.0%, to settle at 5,635.3. FTSE 250 declined 0.9%, to 11,136.7.
European Market Snapshot
Other European markets closed lower yesterday, following disappointing corporate earnings reports and as investors maintained caution before the outcome of the US Federal Reserve meeting. Markets were also weighed down on comments from a Bundesbank official that the bank remained opposed to restarting the European Central Bank’s (ECB) bond-buying program. UBS plunged 5.9%, after it posted weaker-than-anticipated second-quarter earnings. Hugo Boss shed 5.5%, after it posted quarterly gross-profit margins that fell short of analyst estimates. SGL Carbon declined 4.6%, after the company cut its full-year EBIT forecast, citing sluggish demand for the carbon fibers and composites business. Michelin dropped 2.8%, after a broker downgraded the stock to “Neutral” from “Overweight”.
FTSEurofirst 300 index eased 0.9% to 1,063.4. German DAX Xetra 30 fell marginally to close at 6,772.3. French CAC-40 closed 0.9% lower at 3,291.7.
Commodities
In Asia, crude oil for September delivery is trading 0.3% or $0.22 lower at $87.84 per barrel. Yesterday, crude oil for September delivery dropped 1.9% or $1.72 to $88.06 per barrel, tracking a decline in equity markets and as hopes dimmed that the US Federal Reserve would deliver additional stimulus measures following an unexpected rise in US consumer confidence and business activity data for July. Oil prices also fell, after German Chancellor Angela Merkel’s coalition rejected granting the permanent euro rescue fund access to ECB liquidity via a banking license.
Gold for immediate delivery is trading 0.1% higher today, at $1,614.75 per ounce. Gold for August delivery settled down 0.6% or $9.20 at $1,610.50 per ounce yesterday, as investors fretted about the prospects for new stimulus measures from central banks in the US and Europe.
Currencies
At 0400 BST today, the GBP is trading marginally higher against the USD at $1.5674, slightly higher against the EUR at €1.2748, and 0.2% lower against the JPY at ¥122.23.
The EUR is trading slightly higher against the USD at $1.2296, as investors await the outcome from the two-day meeting gathering of US Federal Reserve, and the ECB and Bank of England meetings that are scheduled tomorrow.
The EUR is trading 0.2% lower against the JPY at ¥95.88.
The AUD is trading lower against its major peers, as demand for the high-yielding currency faded, after reports revealed that China’s manufacturing activity slowed to its lowest pace in eight months in July and Australian manufacturing dropped to the lowest level in three years in July.
Yesterday, the EUR ended higher against its major counterparts, on expectations that the ECB might take further actions to contain the debt crisis. The EUR also rose, after French President Francois Hollande and Italian Prime Minister Mario Monti reaffirmed their commitment to preserve the euro zone. The USD ended lower against the EUR. However, upbeat US consumer confidence and business activity data for July helped limit losses. The GBP closed lower against the EUR and the USD, after a report indicated that UK consumer confidence remained unchanged in July as the recession deepened. The GBP also fell, after Moody’s Investors Service lowered its forecast for UK economic growth and stated that the government would struggle to meet its debt-reduction targets. The CAD closed lower against the USD, after data showed that the Canadian’s GDP grew less-than-expected in May.

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