August 02, 2012 Financial Market Summary

DJIA edged down 0.3% to settle at 12,971.1. NASDAQ shed 0.7% to close at 2,920.2. S&P 500 inched 0.3% lower to end at 1,375.1.

Nikkei 225 index is trading 0.3% higher at 8,669.5.

FTSE 100 added 1.4%, to settle at 5,712.8.

FTSEurofirst 300 index rose 0.5% to 1,068.2.

In Asia, crude oil for September delivery is trading 0.1% or $0.08 lower at $88.83 per barrel.

At 0400 BST today, the GBP is trading slightly lower against the USD at $1.5541, 0.1% lower against the EUR at €1.2692, and 0.1% higher against the JPY at ¥121.97.

US Market Snapshot

US markets closed lower yesterday, as investors' hopes for fresh monetary stimulus was dashed after the Federal Reserve maintained its status-quo on monetary policies but noted that economic activity had decelerated somewhat over the first half of the year. Avon Products and Harley-Davidson dropped 1.2% and 3.6%, respectively, as their second-quarter earnings trailed market expectations. Genworth Financial declined 11.1%, leading the laggards on the S&P 500, as its Chief Executive cited on potential difficulties to separating its US mortgage insurance unit from the company. MasterCard declined 2.2%, as it reported lower-than-expected second-quarter revenue and warned of a worldwide slowdown in consumption. General Motors and Ford dipped 0.3% and 0.5%, respectively, on account of lower fleet sales in July.

DJIA edged down 0.3% to settle at 12,971.1. NASDAQ shed 0.7% to close at 2,920.2. S&P 500 inched 0.3% lower to end at 1,375.1.

Asian Market Snapshot

Asian markets are trading mostly higher this morning, amid hopes of positive actions from the ECB later on in the day and boosted by upbeat corporate earnings results. However, gains were limited as the US Federal Reserve refrained from delivering fresh stimulus measures at the end of its policy meeting. In Japan, Toyota Motor is trading higher, after the company reported a 26% surge in US sales in July. Ibiden jumped as it announced a buy-back programme. In Hong-Kong, Orient Overseas International paced losses, as it reported a sharp decline in first-half profit. In South Korea, Korea Gas gained value, as it discovered additional gas reserves at an offshore gas field in Mozambique.

Nikkei 225 index is trading 0.3% higher at 8,669.5. Hang Seng index is trading 0.4% lower at 19,745.5, while Kospi index is trading 0.1% higher at 1,881.1.

UK Market Snapshot

UK markets closed higher yesterday, as robust corporate-earnings reports, and optimistic labour market data from the US overweighed weak domestic manufacturing data for July. Next climbed 6.5%, after the company raised its full-year guidance following better-than-expected first-half results. Standard Chartered gained 3.6%, after it posted first-half profit that surpassed market expectations. Amongst other banks, HSBC Holdings, Lloyds Banking, Royal Bank of Scotland and Barclays advanced between 0.2% and 1.3%, as risk appetite improved among investors. Antofagasta gained 2.4%, after it reported a 9.1% increase in copper output for the second-quarter. Xstrata added 1.5%, amid speculation that Glencore might increase its takeover offer this month. Shire gained 4.8%, as its second-quarter results surpassed market expectations and as it reassured investors about outlook despite increasing generic drug competition.

FTSE 100 added 1.4%, to settle at 5,712.8. FTSE 250 rose 0.4%, to close at 11,186.2.

European Market Snapshot

Other European markets closed mostly higher yesterday, as optimism that the US Federal Reserve and the ECB would take necessary action to provide economic stability, overshadowed weak manufacturing data from the UK and the US and comments from Germany’s Bundesbank. Nokia surged 6.2%, amid speculation that Lenovo was interested in acquiring the firm. Chemical company, Arkema soared 5.7%, after it reported better-than-expected second-quarter earnings. Schneider Electric rallied 4.7%, after the company posted upbeat first-half operating profit, helped by cost-cutting and currency movements. However, BMW dropped 2.9%, after it posted a decline in its second-quarter profit amid higher spend on new models and severe pricing competition. Peers, Daimler, Peugeot and Volkswagen eased between 0.6% and 1.4%.

FTSEurofirst 300 index rose 0.5% to 1,068.2. German DAX Xetra 30 eased 0.3% to 6,754.5. French CAC-40 closed 0.9% higher at 3,321.6.

Commodities

In Asia, crude oil for September delivery is trading 0.1% or $0.08 lower at $88.83 per barrel. Yesterday, crude oil for September delivery rose 1.0% or $0.85 to settle at $88.91 per barrel, after the US Energy Information Administration (EIA) reported a larger-than-expected 6.5 million barrel drop in domestic crude oil inventories for the week ended July 27, the biggest decline since December. However, some gains were pared after the US Federal Reserve, at the end of its two-day policy meeting, offered no new monetary stimulus but signalled further bond buying ahead to support the economic recovery.

Gold for immediate delivery is trading marginally higher today, at $1,602.75 per ounce. Gold for August delivery settled down 0.4% or $6.80 at $1,603.7 per ounce yesterday, after the US Federal Reserve held off on increasing stimulus measures, disappointing investors and lowering demand for the precious metal.

Currencies

At 0400 BST today, the GBP is trading slightly lower against the USD at $1.5541, 0.1% lower against the EUR at €1.2692, and 0.1% higher against the JPY at ¥121.97, ahead of Bank of England’s interest rate decision.

The EUR is trading marginally higher against the USD at $1.2245. The EUR is trading 0.2% higher against the JPY at ¥96.09. However, gains in the EUR were capped, ahead of the Spanish bond auction that is scheduled later in the day.

The JPY is trading lower against its major peers, after the International Monetary Fund (IMF) stated that it is “moderately overvalued,” easing the way for Japanese officials to intervene in the currency market.

The AUD is trading higher against the USD, after data showed that retail sales in Australia rose more-than-expected in June. However, gains were capped, as hopes faded that the ECB officials meeting would offer further stimulus measures to resolve the region’s debt crisis.

Yesterday, the USD ended higher against it major counterparts, after the US Federal Reserve refrained from introducing a third round of quantitative easing to stimulate the economy and maintained its benchmark rate unchanged at historic lows.

The EUR ended lower against the USD, after a report indicated that eurozone manufacturing PMI fell more than initially estimated in July.

The GBP closed lower against the EUR and the USD, after reports revealed that UK house prices declined more-than-expected in July and UK manufacturing contracted at fastest pace since 2009 in July.