WORLD MARKET UPDATES
https://globaleconomic-trendsanalysis.blogspot.com/2011/03/world-market-updates_16.html
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Stocks are posting steep losses in mid-morning trading on Tuesday, as traders continue to worry about a nuclear catastrophe in Japan. The U.S. markets are following the lead of the global stock markets, which have seen a substantial sell-off on the day. While the major averages have climbed well off their worst levels of the day, they remain firmly in the red. The Dow is down 221.87 points or 1.9 percent at 11,771.29, theNasdaq is down 59.58 points or 2.2 percent at 2,641.39 and the S&P 500 is down 25.24 points or 2 percent at 1,271.15. The weakness in the markets comes on the heels of news of another explosion at the Fukushima Daiichi nuclear plant in northeastern Japan. The explosion and a subsequent fire caused dangerous levels of radiation to leak from the earthquake-crippled facility, with the Japanese Prime Minister urging all residents living within a 30 kilometer radius of the plant to stay indoors. The news has added to concerns about the economic impact of the devastation caused by the massive earthquake and tsunami that struck Japan last Friday. With the news out of Japan in focus, traders have largely shrugged off the release of economic data from the U.S., including a report from the Labor Department showing another jump in import prices. The New York Federal Reserve released a separate report showing that conditions for New York manufacturers continued to improve in March, with its index of regional manufacturing activity rising by more than anticipated. Recently, the National Association of Home Builders released a report showing a modest improvement in homebuilder confidence in the month of March. Later in the day, trading could be impacted by the Federal Reserve's announcement regarding interest rates. The central bank is scheduled to make the announcement at about 2:15 pm ET. While the Fed is widely expected to leave interest rates unchanged, traders are likely to keep an eye on any changes to the accompanying statement. Among individual stocks, shares of Hewlett-Packard (HPQ) are moving lower along with the broader market even though the computer and printer maker said its board has approved a 50 percent increase in its regular quarterly dividend. Outlining a four-point strategy to expand its leadership, HP also said it would develop a portfolio of cloud services and build webOS into a leading connectivity platform. | |||||||||||
European Market Reports | |||||||||||
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Investor confidence hit hard Losses lengthened as the morning wore on today as some of the panic selling that was seen in Tokyo overnight spread to Europe. Declines of 3% or more are the norm amongEuropean stock market indices. The DAX in Germany is hardest hit, down 298 points at 6,568. German investor confidence fell for the first time in five months in March, against expectations of a continuation of the upward trend. The ZEW index of investor and analyst expectations, which focuses on a six-month view, eased to 14.1 in March from 15.7 in February. Market expectations had been for a rise to 15.9. Expectations that the European Central Bank will lift its key lending rates sooner rather than later is weighing on sentiment, ZEW said. The research agency added that responses to the survey received after Friday’s earthquake in Japan were considerably more pessimistic than those received before, and ZEW estimates that had this level of pessimism been repeated across the full spectrum of responses then the index would have fallen to around 9.1. The Swiss Market Index is also taking a hammering, down 245 points at 6,029. In Paris, the CAC is 149 points lower at 3,728. There has been some good news, however, with employment in the eurozone growing year on year for the first time since the third quarter of 2008. Employment in the fourth quarter of 2010 rose 0.1% from the preceding quarter and was up 0.3% on the fourth quarter of 2009. For the whole of 2010, employment fell 0.5% to 144.8m after falling 1.8% in 2009. Concerns about the wisdom of relying on nuclear power in areas known to suffer from earthquakes continues to hit power providers such as RWE, Areva, EDF and EON, whole French turbine generator maker Alstom is also friendless. Conversely, clean energy providers, such as wind turbine maker Nordex and solar power specialistSolarWorld continue to be bid up. In Germany, all nuclear power plants that were built before 1980 are to be closed while officials conduct a three-month safety review. Luxury goods makers are also suffering still; the Japanese market is a big one for companies such as LVMH and Burberry. German car makers are also reversing rapidly, while the top blue-chip fallers in France and Germany are both computer chip makers: ST Microelectronics in France and Infineon in Germany. Lufthansa is sharply lower after it said it has suspended flights to Tokyo. In corporate news, Deutsche Boerse is off the pace on fears it may face a bidding war as it seeks to merge with NYSE Euronext. Reports suggest that rival bourse operator NASDAQ OMS Group is trying to raise the funds to enter the bid battle. German banking giant Deutsche Bank has reiterated 2011 profits guidance of €10bn at the pre-tax level. CAC 40 - Risers None CAC 40 - Fallers ST Microelectronics (STM) € 8.56 -5.86% Alcatel-Lucent (ALU) € 3.57 -5.43% Societe Generale (GLE) € 44.92 -5.35% PPR (PP) € 100.15 -5.34% Natixis SA (KN) € 3.94 -5.31% Credit Agricole (ACA) € 11.42 -5.23% Cap Gemini (CAP) € 38.19 -4.88% LVMH (MC) € 101.55 -4.74% Accor (AC) € 30.55 -4.46% Sanofi-Aventis (SAN) € 46.31 -4.33% | |||||||||||
Asia Market Reports | |||||||||||
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Indian Market Ends Lower On Global Cues A sell-off in global equity markets on worries about the economic impact of last week's devastating earthquake and tsunami weighed on the Indian market Tuesday. Panic selling gripped world equities today after a fresh third explosion reported in Japan on Tuesday morning forced Japanese prime minister Naoto Kanthere to urge his people within 30 kilometers of the Fukushima power plant to stay indoors. With radiation levels rising in Tokyo, Kan confirmed there is a state of nuclear emergency and urged people not to panic. The benchmark 30-share BSE Sensex fell by over 500 points to a low of 17,921 early in the session before recouping most of its loss and ending 271 points or 1.47 percent lower at 18,167. Likewise, the 50-share Nifty closed off the day's low at 5,450, down 82 points or 1.48 percent, while the BSE mid-cap and small-cap indexes eased 1.43 percent and 1.63 percent, respectively. However, over a two-day period, the Indian market remains largely unchanged this week, despite escalating worries over the Middle East crisis and concerns over global growth in the aftermath of Japan's tragedy. Investors now await data on advance tax payments by companies and the outcome ofRBI's monetary policy review meeting, due on Thursday, for direction. Meanwhile, the prospects of Japan-based funds selling aggressively in liquid markets such as India to repatriate the funds back home, could not be ruled out. In stock-specific action, Maruti Suzuki, which said it has rolled out its ten millionth car, fell 3.55 percent amid fears of a drop in imports from quake- and tsunami-hit Japan.Mahindra & Mahindra declined 2.67 percent after it completed the acquisition of a majority stake in South Korea's SsangYong Motor Company. Tata Motors ended down 2.18 percent after data showed its global vehicle sales rose 14 percent in February. Metal stocks such as Tata Steel, Hindalco and Sterlite fell by 1-3 percent. Among banking stocks, ICICI Bank eased 2.20 percent, SBI slipped 1.41 percent and HDFC Bank ended down 1.22 percent. Jaiprakash Associates (down 3.80 percent), ONGC(down 3.42 percent), DLF (down 3.15 percent), Wipro (down 3.15 percent), Tata Power(down 2.91 percent) and BHEL (down 2.67 percent) were the other major decliners. Heavyweight Reliance Industries bucked the downward trend, ending up 1.83 percent after reports suggested operations of about five refineries with a combine processing capacity of 1.2 million barrels a day have been affected in earthquake-stricken Japan. Anil Ambani-controlled telecom firm Reliance Communication also closed up with a modest half a percent gain. Cairn India fell 1.42 percent on a brokerage downgrade. JSW Steel slipped nearly 2 percent after it received market regulator SEBI approval to launch an open offer to buy an additional 20 percent stake in Ispat Industries. Suzlon Energy drifted down half a percent after its promoters offloaded a 2.25 percent stake in the company. VIP Industries, which said recently that it expected to grow about 20 percent this year, climbed 7 percent. Tata Coffee rose 2.54 percent after one of its shareholders, Sharad Kantilal Shah, hiked his stake in the company by 1.2 percent to 12.90 percent. Mahindra Satyam edged up 0.22 percent after it won a multi-million contract from Aspire Zone Foundation, Qatar. Central Bank of India added 2.35 percent after the state-run lender said its Rs.2,500-crore rights issue would open on March 24. On the global front, the other Asian markets witnessed a broad sell-off, with Japan's Nikkei dropping as much as 10.55 percent, its third-largest percent fall on record, as concerns grew about the threat of radiation leaking from the Fukushima nuclear power plant in Japan. The benchmark indexes in Australia, China, Hong Kong, Singapore, South Korea and Taiwan ended down between 1 percent and 3 percent. The major European averages fell by 3-5 percent on Tuesday, extending losses for a fifth day, as panic-stricken investors offloaded auto and basic resources stocks fearing sluggish economic growth. The U.S. markets are set to open sharply lower later in the global day. The Dow futures were last moving down 276 points, while Nasdaq futures were down 61 points and S&Pfutures were declining 35 points. | |||||||||||
Forex Top Story | |||||||||||
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Dollar Mixed As Crisis In Japan Intensifies The dollar was mixed Tuesday morning in New York, as the crisis in Japan worsened amid talk of radiation leaking from badly damaged nuclear plants. With carry trades unwinding and funds being repatriated back to Japan, the yenremained broadly stronger. However, because a stronger yen may negatively impact the fragile Japanese economy, the markets are on the lookout for evidence that officials on Tokyo have intervened to put a cap on the currency's rise. Today, the dollar eased to Y81.40, staying near November's 15-year low of Y80.22. Japanese stocks suffered one of their worst daily losses on record, with Tokyo's Nikkei plunging more than 10 percent in panic selling. Reports said the Bank of Japan has injected another 8 trillion yen to insulate markets from the devastating impact of the massive earthquake and tsunami that struck the north-eastern part of the island nation last week. Earlier on Monday, the BoJ pumped a record 15 trillion yen ($183 billion) to boost investor sentiment. Supported by its safe haven status, the dollar edged slightly higher versus the euro andsterling. Disappointing German economic data also helped the dollar against its euro zone rival. The buck improved to $1.3880 against the euro, having bounced back and forth within a penny of that mark for the past week. Earlier this month, the dollar hit a 4-month low of $1.4035. The dollar neared a multi-week high versus the sterling this morning, rising to $1.5978 before leveling off. German economic sentiment deteriorated in March, survey results from the Centre for European Economic Research, or ZEW showed Tuesday. The ZEW indicator of economic sentiment fell by 1.6 points in March to 14.1. This was well below the historical average of 26.7 and the expected reading of 16. Looking at today's economic calendar from the U.S., the results of the New York Federal Reserve's empire state manufacturing survey, is slated to be released at 8:30 AM ET. The headline general business conditions index for March is expected to come in at 16. The export & import price indexes for February, which gives the changes in the prices of non-military goods and services traded between the U.S. and the rest of the world, are due out at 8:30 AM ET. The Treasury Department is due to release a report on the flows of financial instruments into and out of the U.S. for January at 9 AM ET. The National Association of Homebuilders is scheduled to release the results of its March survey on homebuilders' confidence at 10 AM ET. The index is widely expected to increase to 17. The Federal Open Market Committee is scheduled to commence a 1-day meeting, with the central bank expected to make an announcement regarding its near-term direction of monetary policy at 2:15 PM ET.
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