August 03, 2012 Financial Market Summary

DJIA fell 0.7% to settle at 12,878.9. NASDAQ shed 0.4% to close at 2,909.8. S&P 500 shed 0.7% to end at 1,365.0.

Nikkei 225 index is trading 1.6% lower at 8,513.2.

FTSE 100 eased 0.9%, to settle at 5,662.3.

FTSEurofirst 300 index eased 1.2 % to 1,055.3.

In Asia, crude oil for September delivery is trading 0.4% or $0.36 higher at $87.49 per barrel.

At 0400 BST today, the GBP is trading marginally higher against the USD at $1.5518, 0.1% higher against the EUR at €1.2746, and slightly lower against the JPY at ¥121.33.

US Market Snapshot

US markets slid for the fourth day in a row, closing lower yesterday, after the ECB president, Mario Draghi dampened hopes of immediate solid actions to contain the European debt crisis, jittering market sentiment. Abercrombie & Fitch plunged to a three-year low, dropping 14.6%, as it slashed its annual forecast, citing  an anticipated double-digit drop in same-store sales in the second half of 2012. Knight Capital Group plummeted 62.8%, after a $440 million trading loss caused by a technical glitch wiped out much of its capital. Packaging firm, Sealed Air, the top laggard on the S&P 500, slumped 16.8%, as it swung to a second-quarter loss and after it lowered its full-year earnings outlook. General Motors dropped 2.6%, as its second-quarter revenue came in below market expectations.

DJIA fell 0.7% to settle at 12,878.9. NASDAQ shed 0.4% to close at 2,909.8. S&P 500 shed 0.7% to end at 1,365.0.

Asian Market Snapshot

Asian markets are trading lower this morning, tracking negative cues from Wall Street overnight and amid speculation that China would not ease its monetary policies in near term, increasing concern about the global economic recovery. Markets were also weighed down on disappointing corporate earnings. In Japan, Sharp plunged, after widening its full-year loss forecast, while Sony tumbled, as it reported a larger-than-expected quarterly loss and trimmed its profit forecast for the full year. In Hong Kong, Hutchison Whampoa paced decline, as it reported a sharp fall in its first-half net profit. In South Korea, Woori Finance Holdings traded lower after South Korea decided to suspend the sale of its 6 trillion won controlling stake in Woori Finance Holdings after the government received no initial bids.

Nikkei 225 index is trading 1.6% lower at 8,513.2. Kospi index is trading 0.7% lower at 1,857.2. Hang Seng index is trading 0.9% lower at 19,520.5.

UK Market Snapshot

UK markets closed lower yesterday, dragged by losses in financial and mining sector stocks, after the ECB President Mario Draghi failed to outline new measures to curb the region’s debt crisis. Royal Bank of Scotland plunged 5.1%, following media reports that the British government was considering nationalizing the bank. Amongst other banks, Lloyds Banking, Barclays, Standard Chartered and HSBC Holdings declined between 0.4% and 4.3%, as risk appetite decreased among investors. BAE Systems dropped 1.1%, after it reported a drop in its first-half sales. Miners, Vedanta Resources, Antofagasta, Kazakhmys and ENRC dropped between 4.0% and 7.1%, tracking a drop in base metal prices. Ophir Energy slumped 10.4%, after it announced gas discovery in Tanzania, much smaller than its previous expectations. However, Segro rallied 4.9%, after it posted stronger-than-expected quarterly results.

FTSE 100 eased 0.9%, to settle at 5,662.3. FTSE 250 shed 1.0%, to close at 11,076.6.

European Market Snapshot

Other European markets closed lower yesterday, as negative sentiment prevailed among investors after ECB President Mario Draghi failed to announce immediate actions to stimulate the region’s economy. Banks, Credit Agricole, Societe Generale, Commerzbank and Deutsche Bank plunged between 5.3% and 8.0%, as risk appetite decreased among investors. BNP Paribas fell 4.1%, after it reported a sharp drop in its second quarter profit. Veolia Environnement tumbled 11.7%, after it reported first-half results that fell short of market expectations. D.E Master Blenders 1753, the beverage business spun off from the former Sara Lee, slipped 5.6%, after the company stated that it would restate earnings following irregularities in accounting and tax provisions at its Brazilian operations.

FTSEurofirst 300 index eased 1.2 % to 1,055.3. German DAX Xetra 30 dropped 2.2% to 6,606.1. French CAC-40 closed 2.7% lower at 3,232.5.

Commodities

In Asia, crude oil for September delivery is trading 0.4% or $0.36 higher at $87.49 per barrel. Yesterday, crude oil for September delivery dropped 2.0% or $1.78 to $87.13 per barrel, tracking a decline in equity markets and as ECB President Mario Draghi failed to offer immediate stimulus measures to protect the euro and stem the eurozone debt crisis.

Gold for immediate delivery is trading 0.1% higher today, at $1,590.55 per ounce. Gold for December delivery settled down 0.9% or $14.30 at $1,592.80 per ounce yesterday, as the dollar strengthened against the euro, as investors were disappointed at the outcome of the ECB meeting which lacked aggressive monetary policy actions to contain the region’s debt crisis.

Currencies

At 0400 BST today, the GBP is trading marginally higher against the USD at $1.5518, 0.1% higher against the EUR at €1.2746, and slightly lower against the JPY at ¥121.33.

The EUR is trading marginally lower against the USD at $1.2174. The EUR is trading 0.1% lower against the JPY at ¥95.18.

The JPY is trading higher against its major peers, as escalating worries over the health of global economy and intensifying Europe’s debt crisis boosted demand for the safe haven currency.

Yesterday, the EUR ended lower against its major counterparts, after ECB President Mario Draghi failed to implement fresh monetary steps to back up last week’s pledge to do whatever it takes to protect the European common currency, the euro. Earlier in the session, the EUR was trading higher, as the ECB kept its benchmark interest rate unchanged at 0.75%, in line with market expectations.

The GBP ended higher against the EUR, after the Bank of England left its interest rate unchanged and retained the size of its quantitative easing programme.

The AUD closed higher against most of its major peers, after a report showed an improvement in retail sales and trade data for June, boosting expectations that the Reserve Bank of Australia would keep interest rates unchanged next week.

The NZD ended higher against most of its major peers, after data indicated that whole-milk powder prices in New Zealand climbed for the first time in six weeks.