August 07, 2012 Financial Market Summary

DJIA edged up 0.2% to close at 13,117.5. NASDAQ added 0.7% to settle at 2,989.9. S&P 500 ticked up 0.2% to end at 1,394.2.

Nikkei 225 index is trading 0.6% higher at 8,778.7.

FTSE 100 rose 0.4%, to settle at 5,808.8.

FTSEurofirst 300 index added 0.4% to 1,085.8.

In Asia, crude oil for September delivery is trading 0.2% or $0.21 lower at $91.99 per barrel.

At 0400 BST today, the GBP is trading marginally higher against the USD at $1.5592, 0.1% lower against the EUR at €1.2572, and 0.1% higher against the JPY at ¥ 122.08.

US Market Snapshot

US markets closed higher yesterday, hitting fresh three-month highs, as better-than-expected earnings reports lifted market sentiment and after worries over the European debt crisis eased on reports that Germany had backed the European Central Bank's bond-purchasing programme. Best Buy rallied13.3%, after the company’s founder offered a 36% to 47% premium per share in a move to take the electronics retailer private, while Kraft Foods edged up 0.2%, after a broker raised its rating on the stock to “Buy” from “Hold”. DuPont, Alcoa and Caterpillar gained between 1.4% and 1.6%, amid easing worries over sluggish economy. Cognizant Technology jumped 11.0%, as it raised its full-year earnings guidance, amid double-digit growth in second-quarter revenue. Pluristem Therapeutics surged 14.8%, after a patient, for the second time in three months, was saved using its placenta-based stem cell treatment.

DJIA rose 0.2% to close at 13,117.5. NASDAQ added 0.7% to settle at 2,989.9. S&P 500 ticked up 0.2% to end at 1,394.2.

Asian Market Snapshot

Asian markets are trading higher this morning, ahead of Chinese economic data later in the week, amid intensified speculation that the European policymakers would act to reign in higher borrowing costs in struggling countries like Spain and Italy. In Japan, steelmakers, JFE Holdings, Nippon Steel and Sumitomo Metal Industries paced gains, as their US-peer, AK Steel announced price hikes pointing to improving business conditions. In Hong-Kong, Cnooc rallied as Nymex crude-oil futures climbed overnight, while Europe-focused firm, Esprit Holdings is trading higher, amid improvement in exports outlook. In South-Korea, Korea Aerospace Industries climbed, as it posted a sharp gain in its second-quarter profit on a YoY basis.

Nikkei 225 index is trading 0.6% higher at 8,778.7. Kospi index is trading 0.2% higher at 1,890.5. Hang Seng index is trading 0.4% higher at 20,085.1.

UK Market Snapshot

UK markets ended higher yesterday, after Greece and the Troika agreed on the need to support policy efforts and comply with its bailout terms. Royal Bank of Scotland surged 5.9%, amid reports that its US subsidiary, Citizens Financial, could receive a £10 billion takeover approach from Brazil's Banco Itau. Amongst other banks, Barclays and Lloyds Banking Group rose 3.4% and 2.5%, respectively as risk appetite increased amongst investors. Miners, ENRC, Vedanta Resources, Randgold Resources and Rio Tinto climbed between 2.6% and 3.8%, tracking a rise in metal prices. Marks and Spencer advanced 1.9%, amid speculative reports that it could be a takeover target. Evraz climbed 4.8%, after a broker removed the stock from its “Least Preferred” list. Burberry Group rose 1.9%, after Prada reported a sharp rise in its first-half sales, surpassing analyst estimates. Catlin Group gained 2.6%, after the company swung to a first-half profit.

FTSE 100 rose 0.4%, to settle at 5,808.8. FTSE 250 climbed 1.1%, to close at 11,426.4.

European Market Snapshot

Other European markets closed higher yesterday, after Greece and its creditors agreed on the requirement to strengthen policy efforts and German Chancellor Angela Merkel’s government backed ECB’s bond buying program. Peugeot, Renault, BMW and Volkswagen soared between 1.7% and 7.8%, after their Japanese peer, Toyota reported better-than-expected sales figures. Credit Agricole, BNP Paribas, Societe Generale and Deutsche Bank climbed between 0.8% and 5.2%, amid optimism European policy makers would take action to contain the region’s debt crisis. Richemont gained 5.2%, after the company forecasted a rise in first-half profit. Allianz advanced 2.0%, after a broker upgraded the stock to “Overweight” from “Neutral”.

FTSEurofirst 300 index added 0.4% to 1,085.8. German DAX Xetra 30 rose 0.8% to 6,918.7. French CAC-40 closed 0.8% higher at 3,401.6.

Commodities

In Asia, crude oil for September delivery is trading 0.2% or $0.21 lower at $91.99 per barrel. Yesterday, crude oil for September delivery advanced 0.9% or $0.80 to $92.20 per barrel, extending Friday’s gains, as investors eyed ongoing turmoil in the Middle East and as a rise in global equity markets and a weaker dollar increased the appeal for crude oil as an alternative investment. Crude oil futures had jumped in the morning session, amid false rumours about Syrian President Bashar al-Assad’s death.

Gold for immediate delivery is trading marginally higher today, at $1,612.05 per ounce. Gold for December delivery settled up 0.4% or $6.90 at $1,616.20 per ounce yesterday, as the dollar weakened against the major currencies and after Friday’s US unemployment data increased hopes for more aggressive stimulus by the US Federal Reserve.

Currencies

At 0400 BST today, the GBP is trading marginally higher against the USD at $1.5592, 0.1% lower against the EUR at €1.2572, and 0.1% higher against the JPY at ¥ 122.08.

The EUR is trading 0.1% higher against the USD at $1.2402. The EUR is trading 0.2% higher against the JPY at ¥97.10. The EUR is trading higher after the German Chancellor Angela Merkel’s government backed the European Central Bank’s bond-buying plan in efforts to lower borrowing costs in Italy and Spain.

Earlier, the EUR was trading lower against the JPY and the USD, after Italy’s Prime Minister Mario Monti stated that divisions within the euro-bloc threatened the European Union’s future.

The JPY is trading higher against most of its major peers as global equity markets traded higher and amid speculation the Bank of Japan would refrain from additional monetary easing at a policy meeting that starts tomorrow.

The AUD traded higher against the USD, amid speculation Australia’s Reserve Bank would keep borrowing costs unchanged at 3.5% at a meeting today.

Yesterday, the EUR ended higher again the USD and the GBP amid optimism that the European policymakers would contain the region’s debt crisis by supporting struggling nations.

The GBP ended lower against the EUR and USD, after Halifax reported that the house price index in the UK dropped 0.6% in July, underlining the fragility of Britain’s economy.