August 06, 2012 Financial Market Summary

DJIA soared 1.7% to close at 13,096.2. NASDAQ surged 2.0% to settle at 2,967.9. S&P 500 surged 1.9% to end at 1,391.0.

Nikkei 225 index is trading 1.7% higher at 8,702.3.

FTSE 100 surged 2.2% to settle at 5,787.3.

FTSEurofirst 300 index advanced 2.5% to 1,081.4.

In Asia, crude oil for September delivery is trading 0.3% or $0.25 lower at $91.15 per barrel.

At 0400 BST today, the GBP is trading 0.1% lower against the USD at $1.5619, 0.3% lower against the EUR at €1.2600, and 0.4% lower against the JPY at ¥122.48.

US Market Snapshot

US markets closed higher on Friday, snapping a four-day losing streak, after US nonfarm payrolls rose more-than-expected in July, at the fastest pace in five months. Renewed hopes of actions from the European authorities to contain the eurozone debt crisis and upbeat July service sector data also underpinned market sentiments. Kraft Foods gained 4.0%,  as it left its full-year forecasts unchanged, after reporting forecast-beating second-quarter results, while Procter & Gamble rose 3.1%, as it unveiled a $4 billion worth of share re-purchase plan. LinkedIn jumped 16.0%, as it raised its revenue forecast for this year. Boeing added 1.1%, as NASA picked Boeing along with two other aerospace companies to develop spacecraft capable of carrying astronauts.

DJIA soared 1.7% to close at 13,096.2. NASDAQ surged 2.0% to settle at 2,967.9. S&P 500 surged 1.9% to end at 1,391.0.

Asian Market Snapshot

Asian markets are trading higher this morning, following positive US labour market and services industry data, alleviating fears of a slowdown in the world’s largest economy. A weekend statement by the People's Bank of China indicating a step-up in monetary policy fine-tuning also helped investment sentiment, raising hopes for more monetary easing. In Japan, Toyota Motor paced gains after it hiked its sales target on strong US and domestic demand. In Hong-Kong, Cnooc and China Petroleum & Chemical added values, as crude-oil futures rallied nearly 5% on Friday. In South Korea, STX Corp and STX Offshore & Shipbuilding, both surged, after media reports revealed that a local private equity fund was in talks to acquire a 49% stake in unlisted affiliate STX Energy.

Nikkei 225 index is trading 1.7% higher at 8,702.3. Kospi index is trading 2.1% higher at 1,887.6. Hang Seng index is trading 2.0% higher at 20,062.8.

UK Market Snapshot

UK markets rallied sharply on Friday, with the FTSE 100 index hitting a three-month high, following solid corporate earnings across Europe and after US non-farm payrolls data for July surpassed market expectations. Among insurance sector stocks, Aviva , the top gainer on the FTSE 100 index, jumped 7.4%, while Legal & General and Prudential climbed 2.7% and 6.1%, respectively, as their French-peer, Axa  reported first-half profits that surpassed market expectations. BHP Billiton rose 3.3%, after the company stated that its CEO would give up his 2012 bonus following a write-down worth $2.84 billion on US shale gas assets. Royal Bank of Scotland jumped 5.6%, despite reporting a £1.5 billion loss in the first half. Inmarsat rallied 10.9%, after it was encouraged by revenue growth in its core Global MSS business, despite a drop in second-quarter results.

FTSE 100 surged 2.2% to settle at 5,787.3, while FTSE 250 soared 2.0% to close at 11,301.1..

European Market Snapshot

Other European markets ended higher on Friday, as risk appetite returned among investors, following robust nonfarm payrolls data released from the US and after yields on Spanish and Italian bonds eased. Banks, Societe Generale, BNP Paribas, Deutsche Bank and Commerzbank rallied between 6.4% and 10.3%, on higher risk appetite. Siemens surged 6.2%, after the company stated that it would buy back as much as €3 billion of stock by late December. Continental gained 6.1%, after its second-quarter‎ profit surpassed market expectations and as it raised its 2012 target. Allianz soared 5.7%, on stronger-than-anticipated second-quarter results. Nokia rose 3.3%, on the back of increased sales of its Lumia smartphone series and amid speculation of a bid interest from Lenovo Group. 

FTSEurofirst 300 index advanced 2.5% to 1,081.4. German DAX Xetra 30 gained 3.9% to 6,865.7. French CAC-40 closed 4.4% higher at 3,374.2.

Commodities

In Asia, crude oil for September delivery is trading 0.3% or $0.25 lower at $91.15 per barrel. On Friday, crude oil for September delivery advanced 4.9% or $4.27 to $91.40 per barrel, amid optimism over demand outlook, after reports revealed that US non-farm payrolls climbed more-than-expected in July and US service industries increased unexpectedly in July. Oil prices also rose, tracking a rise in global equity markets and as a weak dollar increased the appeal of crude oil as an alternative investment.

Gold for immediate delivery is trading 0.1% higher today, at $1,604.60 per ounce. Gold for December delivery settled up 1.2% or $18.60 at $1,609.30 per ounce on Friday, as the dollar weakened against the major currencies, increasing the demand for the precious metal as a hedge against inflation.

Currencies

At 0400 BST today, the GBP is trading 0.1% lower against the USD at $1.5619, 0.3% lower against the EUR at €1.2600, and 0.4% lower against the JPY at ¥122.48.

The EUR is trading 0.2% higher against the USD at $1.2396, after Greece and its international creditors agreed on the need to strengthen policy efforts to boost the economy and comply with its bailout terms after more than a week of meetings in Athens. The EUR is trading 0.1% lower against the JPY at ¥97.21.

The JPY is trading lower against most of its major peers, amid speculations that Japan’s officials, at the  Bank of Japan’s a two-day policy meeting starting 8 August, would favour intervention in the currency markets to weaken the local currency.

On Friday, the USD ended lower against most of its major counterparts, as better-than-expected US employment and services sector data improved risk appetite among investors and dampened the demand for the currency as safe-haven asset. Continued speculation of further quantitative easing by US Federal Reserve also weighed on the dollar.

The EUR closed higher against the USD, after data indicated an unexpected rise in eurozone retail sales for June and upbeat German services sector data for July. The EUR also rose, after members of German Chancellor Angela Merkel’s coalition parties indicated that they would not stand in the way of ECB Chief Mario Draghi’s plan to buy government bonds. 

The NZD ended higher against most of its major peers, after Standard & Poor’s affirmed the New Zealand’s credit rating at ‘AA+/A-1+’, with a stable outlook.