June 13, 2012 Financial Market Summary

DJIA surged 1.3% to settle at 12,573.8. NASDAQ soared 1.2% to close at 2,843.1. S&P 500 advanced 1.2% to finish at 1,324.2.

Nikkei 225 index is trading 0.3% higher, at 8,565.2.

FTSE 100 gained 0.8% to settle at 5,473.7. FTSEurofirst 300 index added 0.7% to 990.2.

In Asia, crude oil for July delivery is trading 0.4% or 34 cents lower at $82.99 per barrel.

At 0400 BST today, the GBP is trading 0.1% lower against the USD at $1.5548, marginally higher against the EUR at €1.2456, and flat against the JPY at ¥123.80.

US Market Snapshot

US markets rallied yesterday, on hopes that the Federal Reserve would launch additional monetary easing and as the ECB backed bank deposits guarantee, curbing fears of a bank run. Boeing rallied 3.5%, after Sanford C. Bernstein raised its rating to “Outperform” from “Market perform”, while Textron climbed 4.0%, as it bagged an order of 150 jets from NetJets. First Solar surged 21.3%, on news that the company is boosting output to meet surprisingly high levels of demand in Germany. Batteries developer, A123 Systems soared 51.9%, on achieving a breakthrough in advanced battery technology. Morgan Stanley jumped 4.2%, as it focused on cost reduction of $1.4 billion annually.

DJIA surged 1.3% to 12,573.8. NASDAQ soared 1.2% to 2,843.1. S&P 500 advanced 1.2% to 1,324.2.

Asian Market Snapshot

Asian markets are trading higher this morning, taking cues from overnight gains on Wall Street. However, gains were subdued on worries that Europe would struggle to stem its debt crisis, after Fitch Ratings highlighted significant risk of capital outflows from the region and ahead of Italy’s debt auctions and Greece’s election. In Japan, Mitsui High-Tec gained value, after the company reported more than 700.0% rise in its operating profit on an annual basis. Machinery stocks, Fanuc and Denso traded higher, as core machinery orders rose 5.7% in April. In Hong Kong, Hang Seng Bank and HSBC Holdings traded higher, tracking gains in major US banks. In South Korea, Kumho Industrial traded higher, after the company announced that it would sell $808.6 million worth of assets to a private equity firm.

Nikkei 225 index is trading 0.3% higher, at 8,565.2. Hang Seng index is 0.3% up, at 18,922.4, while the Kospi index is trading 0.1% higher, at 1,855.9.

UK Market Snapshot

UK markets closed on a mixed note yesterday, as Federal Reserve Bank of Chicago President, Charles Evans, backed the idea of more stimulus, offsetting Fitch Ratings’ decision to downgrade 18 Spanish banks. Gold miner, Randgold Resources, the top gainer on the FTSE 100 index, rallied 3.0%, as gold prices climbed. Vodafone gained 2.1%, as BofA Merrill Lynch reiterated its “Buy” rating on the stock. ICAP added 2.7%, following a “Buy” note from Faraday Research. Miners, Rio Tinto, BHP Billiton and Fresnillo logged gains between 1.0% and 2.4%, tracking a rise in base metal prices. Royal Dutch Shell-B and Tullow Oil gained 1.1% and 1.6%, respectively, as oil prices moved higher. Royal Dutch Shell-B also advanced, amid speculation that it would be interested in bidding for France’s Maurel & Prom. Rolls-Royce gained 1.8%, after a broker raised its price target.

FTSE 100 gained 0.8% to settle at 5,473.7, while FTSE 250 shed 0.9% to close at 10,561.2.

European Market Snapshot

Other European markets finished in the positive territory yesterday, amid optimism that the US Federal Reserve would inject more stimulus to bolster the country’s economic growth. Applications software stock, TomTom, soared 16.2%, after Apple announced that it would use its digital maps in the next version of its mobile software. Cement maker, Lafarge, rose 2.1%, after the company stated that new products and spending reductions would help it to increase its earnings by €1.75 billion. Banking stock, Julius Baer Group, rose 2.7%, after UBS upgraded the stock to “Buy” from “Neutral”, while Utility stock, EON, added 1.1%, after the same broker raised its recommendation on the stock to “Buy” from “Neutral”. However, gains were restricted by losses in financial sector stocks, following a downgrade of 18 Spanish banks by Fitch Ratings and after Spanish borrowing costs reached a record.

FTSEurofirst 300 index added 0.7% to 990.2. German DAX Xetra 30 rose 0.3% to 6,161.2. French CAC-40 closed 0.1% higher, at 3,046.9.

Commodities

In Asia, crude oil for July delivery is trading 0.4% or 34 cents lower at $82.99 per barrel. Yesterday, crude oil for July delivery added 0.8% or 62 cents to settle at $83.32 per barrel, as demand concerns eased, after the US Federal Reserve of Chicago President, Charles Evans, stated that he was in favour of further stimulus measures for better generation of jobs. Crude oil also gained value, on hopes that OPEC would keep its production levels unchanged and as the dollar depreciated against the other currencies which increased the demand of oil as an alternative investment.

Gold for immediate delivery is trading marginally lower today, at $1608.68 per ounce. Gold for August delivery rose 1.1% or $17 to settle at $1,613.80 per ounce yesterday, as the dollar weakened against the euro, amid speculation that the US Federal reserve would expand its monetary policy, increasing 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 $1.5548, marginally higher against the EUR at €1.2456, and flat against the JPY at ¥123.80.

The EUR is trading 0.2% lower against the USD at $1.2482 and marginally down against the JPY at ¥99.38, ahead of an Italian debt auction and Greece’s General election on 17 June, and amid speculation that a data due to be released today might show that the Eurozone industrial production dropped the most in seven months.

The USD is trading higher against most of its major peers, on higher demand for safe haven assets, as Spanish borrowing costs soared to a 15-year high, and after Fitch Ratings stated that the country’s Prime Minister Mariano, Rajoy, would miss budget-deficit targets.

The AUD is trading lower against the USD, following a report that showed the Australian consumer confidence stagnated near the lowest level in 2012. The currency also lost value, as investors speculated monetary easing, after Reserve Bank of Australia Governor, Glenn Stevens, stated that the country’s real exchange rate is “pretty high”.

Yesterday, the EUR fell initially against the USD, as a sharp rise in Spanish and Italian bond yields raised speculation that the debt crisis would spread to other Eurozone economies, dampening demand for riskier assets. The JPY closed lower against most of its major peers, ahead of a two-day policy meeting of Bank of Japan on 14 June, after the IMF stated that Japan’s currency was overvalued and the country’s central bank should consider adding to monetary stimulus. The GBP closed higher against the EUR, after Fitch Ratings stated that “AAA” nations in the Eurozone are at risk of downgrades.