WORLD MARKET UPDATES

US Market Reports

Dow Jones NASDAQ NYSE AMEX

Stocks have moved sharply lower in early trading on Thursday, with traders shrugging off a sharp drop by the price of oil amid disappointing economic data. The major averages have all moved firmly into negative territory, adding to the modest losses posted in the previous session. The early weakness is partly due to the release of a report showing that Chinaunexpectedly recorded a trade deficit in the month of February, with the data raising concerns about the global economic recovery. China unexpectedly reported a $7.3 billion trade deficit in February compared to a $6.5 billion trade surplus in January. The deficit was the widest in seven years. Reports showing a bigger than expected increase in U.S. weekly jobless claims and a wider than expected U.S. trade deficit in January have also contributed to the selling pressure. With the concerns about the global economy contributing to a pullback by commodities prices, resource stocks are turning in some of the worst performances in early trading. Gold stocks are posting particularly steep losses, dragging the NYSE Arca Gold BugsIndex down by 2.8. Significant weakness has also emerged in a variety of other sectors, with computer hardware, housing, transportation, and healthcare stocks posting substantial losses. The major averages have edged up off their lows for the young session in the past few minutes but remain firmly in the red. The Dow is down 186.90 points or 1.5 percent at 12,026.19, the Nasdaq is down 46.39 points or 1.7 percent at 2,705.33 and the S&P 500 is down 20.80 points or 1.6 percent at 1,299.22.

European Market Reports

FTSE 100 Euronext Dax perf CAC 40

European Stocks Hammered On Spain Downgrade, China Data  European stocks have been hit hard on Thursday, as a Moody's downgrade of Spanish credit raised further concerns about the euro zone's debt problems. The Euro Stoxx 50 benchmark index of euro zone stocks was down 0.88 percent to 2,909.72. Factoring in U.K. companies, the Stoxx Europe 50 index was down 0.70 percent at 2,618.95. Around Europe, Germany's DAX was off 0.83 percent to 7,072.80, France's CAC-40was down 0.61 percent at 3,969.81, U.K.'s FTSE 100 was down 1.06 percent at 5,874.30, and Switzerland's SMI was down 0.23 percent at 6,431.31. Moody's Investors Service on Thursday downgraded Spain's ratings by one notch, citing concern over the ability of the government to achieve the budget targets. The outlook is negative, according to Moody's The Bank of England on Thursday left its key interest rate unchanged at a record low again as expected and maintained the size of the quantitative easing at GBP 200 billion. Resource producers were under pressure after China said it swung to its largest trade deficit in seven years in February. Anglo-Australian mining giant Rio Tinto said it has raised its offer by 3 percent for Australian coking coal miner Riversdale Mining if Rio Tinto gains more than 50 percent of Riversdale. Rio Tinto shares were down 4.3 percent. In corporate news, Linde AG said its full-year net income climbed to 1.005 billion euros from 591 million euros last year. Earnings after tax rose by 62.9 percent to 1.064 billion euros from 653 million euros a year earlier. Shares were flat, having pared early gains. Deutsche Post DHL posted fourth quarter net profit of 487 million euros or 0.40 euros per share, compared to loss of 283 million euros, or 0.24 euros per share last year. Shares were up 1.2 percent. German insurance group Munich Re Thursday maintained its outlook for 2011, stating it expects more or less unchanged consolidated result of around 2.4 billion euros (about $3.32 billion) for 2011 despite major claims on natural catastrophes in Australia and New Zealand. However, the world's biggest reinsurer cautioned that this target can be attained only if random losses for the remainder of the year remain below expectations. Munich Re shares slumped 2.5 percent. Germany's GEA Group AG, a provider of process technology and components for food and energy industries, confirmed its preliminary figures for full year 2010. Shares were down 1.5 percent. Defense and aerospace group Finmeccanica SpA said it agreed to sell a 45 percent stake in its power-plant construction unit to U.S. private equity firm First Reserve Corp.to cut debt. Finmeccanica stocks were up 1.7 percent.

Asia Market Reports

Nikkei 225 Hang Seng Bse Sensex S&P/ASX 20

Indian Market Ends In The Red  The Indian market edged lower on Thursday, as high crude oil prices amid escalating fighting in Libya where Qadhafi forces are bombing rebel positions spurred risk aversion. Nevertheless, buying at lower levels, supported by data showing a drop in food inflationto a single digit, helped the benchmark indexes closed off the day's lows. Also, India's exports grew by a whopping 49.8 per cent to $ 23.6 billion in February this year, the fastest rise in 11 months, on the back of rising demand from markets like Asia, North America and Africa, Commerce Secretary Rahul Khullar told reporters today. After moving in a range of 18,431-18,261, the benchmark 30-share Sensex closed down 142 points or 0.77 percent at 18,328, while the 50-share Nifty index fell by 37 points or a modest 0.66 percent. Second-line stocks closed little changed with a negative bias and the market breadth was fairly negative, with 1549 decliners versus 1273 gainers on the BSE. Metal andbanking stocks bore the brunt of the selling, while realty stocks witnessed stock-specific buying. Auto, capital goods, power and public sector stocks closed little changed. India's annual food inflation for the week ended February 26 slowed to a three-month low of 9.52 percent from 10.39 percent in the previous week on account of a decline in prices of potatoes, pulses and wheat, government data released today showed, giving a breather to the government which is grappling with options to sustain growth and keep prices under check. Investors eagerly await the RBI's mid-term monetary review policy coming up on March 17 to determine direction of interest rates for the rest of the year. Before that, industrial output data for January due tomorrow at around 11 am and wholesale inflation data for February to be released on Monday are likely to influence near-term market sentiment. In stock-specific action, Software services provider Mastek shed 0.80 percent after the software services provider said it expects less revenue from its partnership with Capita. Heavyweight IT stocks such as Infosys and TCS fell between 0.25 percent and 1.52 percent, while Wipro gained 0.69 percent. Metal stocks fell sharply in line with their Asian peers. Tata Steel fell 2.59 percent, Hindalco lost 1.72 percent and Sterlite Industries shed 0.81 percent. Banking stocks such as ICICI Bank and SBI ended down about 2 percent each ahead of RBI's third-quarter review of monetary policy due next week. Tata Power (down 2.91 percent), Bajaj Auto (down 1.26 percent), NTPC (down 1.24 percent), Jindal Steel (down 1.15 percent) and Hindustan Unilever (down a percent) were the other prominent decliners. Lanco Infratech declined 1.55 percent on reports that it would ramp up capacity of its Griffin coal mines in Australia. Kingfisher Airlines, which is facing a cash crunch, ended down a little over a percent. Rival Jet Airways fell nearly 2 percent, but Spice Jet rose 1.27 percent. McLeod Russel India, which is reportedly scouting for acquisitions in Africa, closed up 0.64 percent. NIIT added 2.14 percent on bagging a government contract. Pantaloon Retail (India) rose 1.51 percent on the buzz that it has raised branded apparel prices. Gokaldas Exports hit the 20 percent upper circuit limit on reports that private equity giantBlackstone will take control of the apparel exporter. Telecom operator Reliance Communication rose half a percent after it signed a pact with China Development Bank to avail a Rs. 6,000 crore loan. The deal also helped other group stocks close on a positive note. Reliance Capital climbed 4.74 percent,Reliance Infrastructure added 0.66 percent and Reliance Power ended up marginally. Explorer ONGC and property developer DLF rose about 1.5 percent each, power equipment maker BHEL gained 0.30 percent, two-wheeler manufacturer Hero Honda Motors edged up 0.28 percent, car maker Maruti Suzuki gained 0.24 percent and commercial vehicle manufacturer Tata motors ended up 0.15 percent. Elsewhere, the other Asian markets fell across the board on Thursday, dragging theMSCI Asia Pacific index down about 1.5 percent, as unrest in oil-producing countries, weaker-than-expected Japanese GDP data and China's unexpected trade deficit for February sparked worries about the sustainability of economic recovery. European stocks dropped notably and the euro retreated after Moody's Investors Service cut its rating on Spanish sovereign debt. Trading in the U.S. index futures suggested that the Dow futures could fall 52 points at the opening bell later in the global day. Moody's downgraded Spain's government bond ratings by one notch to Aa2 from Aa1 and assigned a negative outlook to the rating. The expectations of a further increase in the public debt ratio as well as continued concerns over the ability of the Spanish government to achieve the required improvement in general government finances were the major factors behind the downgrade, the agency said.

Forex Top Story

USDCAD USDEUR USDGBP USDJPY

BoE Retains Record Low Interest Rate The Bank of England on Thursday retained its key interest rate again at a historic low as weak economic activity weighed on the assessment of policy makers despite concerns over above-target inflation. The nine-member Monetary Policy Committee, led by governor Mervyn King, voted to leave the benchmark interest rate unchanged at 0.5% as expected. The rate is the lowest since the central bank was established in 1694. As widely expected, policy makers also maintained the stock of asset purchases financed by the issuance of central bank reserves at GBP 200 billion. The majority of MPC members likely decided that higher interest rates were an extra handicap that the economy could do without for now at least, said IHS Global Insight economist Howard Archer. Whether or not the central bank hikes interest rates in the second quarter will depend critically on how well the economy performs, added Archer. However, amid rising inflationary pressure, more policy makers are likely to have turned hawkish this month. The minutes of the meeting will be released on March 23. In February, Spencer Dale, Andrew Sentance and Martin Weale called for a rate hike. While Sentance preferred to increase the Bank Rate by 50 basis points, Dale and Weale voted for a quarter-point hike. These members said the case for removing some monetary stimulus was compelling. Furthermore, BoE's counterpart the European Central Bank is likely to tighten its policy next month. After the interest rate decision on March 3, ECB President Jean-Claude Trichet hinted at a rate hike as surging energy and food prices have compelled policy makers to stand guard against inflation. U.K. annual inflation had risen to 4% in January, the highest since 2008, and twice the central bank's 2% target. King wrote an open letter to Chancellor in February as inflation exceeded the 2% target by one full percentage point for three straight months. The central bank chief blamed high inflation on temporary factors. "The dilemma between high inflation and low growth will, in our view, keep rates on hold to at least May," said ING Bank NV's economist James Knightley. Rising energy prices on Middle Eastern concerns risks a longer period of above target inflation, the economist added. The central bank sees inflation ranging between 4% and 5% in the near term. In its quarterly inflation report, the BoE said it estimates around 3% economic growth in the near term. The economy contracted 0.6% sequentially in the fourth quarter, falling for the first time in more than a year. British Chambers of Commerce economist David Kern said an increase in rates looks increasingly likely over the next two to three months, and so the focus must be on minimizing the harmful effects this could have on the economy.

Canadian Market Reports

CADUSD Oil Gold Allbanc

TSX May Extend Losses Amid Weak Commodities Toronto stocks may open lower Thursday amid easing commodities prices and weak cues from the global equity markets. While most Asian markets ended lower overnight, European stocks were lingering in the red amid renewed worries over the euro zone debt situation and escalating tensions in the Middle East. However, value buying at lower levels after the main index surrendered over 350 points or 2.6 percent in the past three sessions may support stocks. U.S. stock futures were pointing to a lower open. On Wednesday, the S&P/TSX Composite Index extended losses for a third session, shedding 128.26 points or 0.92 percent to 13,884.71, its 2-week low. Earlier today, China reported a surprise trade deficit in February as surging commodities prices escalated its import bill. The price of crude oil moved down amid renewed worries over the euro zone debt situation. Also, a steady U.S. dollar weighed on oil prices. Crude for April slipped $0.98 to $103.40 a barrel. The price of gold moved down below $1,420 Thursday morning as the U.S. dollar remained steady. Gold for April was down $10.50 to $1,419.10 an ounce. In corporate news from Canada, integrated tour operator Transat A.T. Inc. reported a narrower first-quarter net loss of C$13.47 million or C$0.36 per share compared to C$13.87 million or C$0.37 per share last year. Adjusted loss was C$25.62 million, wider than C$25.4 million in the comparable period last year. Analysts were expecting the company to report loss C$0.18 per share this quarter. Natural gas liquids dealer Provident Energy swung to profit, reporting fourth quarter net income of C$61.32 million or C$0.22 per share compared to a loss of C$20.34 million or C$0.08 per share in the prior year. Adjusted funds flow from continuing operations was C$84.39 million or C$0.27 per share, up from C$57.18 million or C$0.20 per share in the year-ago quarter. The company announced March cash dividend of C$0.045 per share. Crude oil and natural gas firm Fairborne Energy reported a narrower full year of 2010 loss of C$16.3 million or C$0.16 per share from net loss of C$25.6 million or C$0.28 per share last year Electronics manufacturing services provider SMTC Corp. reported improved fourth-quarter net income of $4.52 million or $0.28 per share compared with $2.17 million or $0.15 per share in the year ago period. . In economic news, Statistics Canada said trade surplus narrowed to C$116 million in January from a revised C$1.7 billion in December. Economists expected the surplus to widen to C$3 billion in January from the C$2.6 billion initially reported for December From south of the border, the U.S. Labor Department said that initial jobless claims rose by 26,000 to 397,000 in the week ended March 05 from the previous week's revised figure of 371,000. Economists were expecting jobless claims to rise to 385,000 from the 368,000 originally reported for the previous week. Separately, the U.S. Commerce Department said trade deficit widened to $46.3 billion in January, wider than the $41 billion deficit expected by economists. Elsewhere, rating agency Moody's Investor Services has downgraded its credit rating on Spain by one notch to Aa2, citing worries over the cost of the banking sector's restructuring, the government's ability to achieve its borrowing reduction targets and grim economic growth prospects.