WORLD MARKET UPDATES
https://globaleconomic-trendsanalysis.blogspot.com/2011/03/world-market-updates_30.html
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Stocks have moved mostly higher in morning trading on Wednesday, with the markets extending a recent upward move on the heels of upbeat employment data. Buying interest has remained relatively subdued, however, with lingering geopolitical concerns limiting the upside. The major averages are currently posting moderate gains, off their highs for the session. The Dow is up 54.95 points or 0.5 percent at 12,333.96, the Nasdaq is up 10.13 points or 0.4 percent at 2,767.02 and the S&P 500 is up 5.71 points or 0.4 percent at 1,325.15. The strength in the markets is partly due to the release of a report from payrollprocessor Automatic Data Processing (ADP) showing another significant increase in private sector employment in March. The report showed that private sector employment rose by 201,000 jobs in March following a downwardly revised increase of 208,000 jobs in February. Economists had expected an increase of about 208,000 jobs compared to the addition of 217,000 jobs originally reported for the previous month. Peter Boockvar, equity strategist at Miller Tabak, said, "While slightly below estimates, the pace of job gains is good and certainly encouraging to see." "But we still have years to go to get back what was lost in the recession if this current pace persists," Boockvar added. The Labor Department's more closely watched monthly employment report, which includes both private and public sector jobs, is due to be released on Friday. While payroll employment is expected to show continued growth, the unemployment rate is expected to remain unchanged at 8.9 percent. Additional news on the merger-and-acquisition front has also generated some positive sentiment, with shares of Cephalon (CEPH) up by 28.1 percent on news that Valeant Pharmaceuticals (VRX) has made a hostile takeover offer for the biopharmaceutical company. Valeant has offered to acquire Cephalon for $73 per share in cash, representing a total value of approximately $5.7 billion. The offer represents a 24 percent premium toCephalon's closing price on Tuesday and a 29 percent premium over its 30-day trading average. Meanwhile, shares of Sealy (ZZ) have come under pressure after the mattress maker reported a first quarter net loss compared to a year-ago profit. The company also reported a decrease in net sales. Sector News With Cephalon helping to lead the way higher, considerable strength has emerged among biotechnology stocks. The NYSE Arca Biotechnology Index has surged up by 2.3 percent in morning trading, reaching a record intraday high. Along with Cephalon, Amylin Pharmaceuticals (AMLN) and Nektar Therapeutics(NKTR) are also posting notable gains, advancing by 2.6 percent and 2.3 percent, respectively. Gold stocks have also shown a significant move to the upside, moving higher along with the price of the precious metal. With gold for June delivery rising $9.70 to $1,427.20 an ounce, the NYSE Arca Gold Bugs Index is up by 1.6 percent. While notable strength is also visible among utilities, airline, and natural gas stocks, oil service stocks have come under pressure amid a decrease by the price of crude oil. | ||||||||||||
European Market Reports | ||||||||||||
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European Markets Advance The European markets are trading higher on Wednesday, led by car manufacturers, miners and utilities. Hopes of an economic recovery and firm cues from Asia lifted spirits as traders chose to brush aside worries about sovereign debt and Japan's nuclear crisis. Lenders are mixed as Ireland publishes its new stress-test results on four banks tomorrow. The Euro Stoxx 50 index of euro zone blue chippers is advancing 0.86 percent, while the Stoxx Europe 50 index, which includes some major U.K. Companies, is rising 0.77 percent. The German DAX is adding 1.60 percent and the French CAC 40 is up 0.93 percent. The FTSE 100 index of the UK is gaining 0.53 percent, while Switzerland's SMI is rising 0.83 percent. Market strategist Ben Potter of IG Markets told dpa-AFX that strong gains in Asia and the previous session's performance in the U.S. led to the rally in European markets. Among the DAX components, truckmaker MAN is gaining 3.3 percent after JP Morgan increased its price target on the stock to 117 euros from 110 euros and reiterated its "Overweight" rating. According to dpa-AFX, analyst Nico Dil raised his profit estimates for the company for 2011 and 2012, citing the commercial vehicles business as the biggest driving force. Volkswagen, BMW and Daimler are advancing between 2.6 percent and 1.75 percent. Deutsche Bank is up 0.45 percent, while Commerzbank is dropping 0.25 percent. Outside the main index, Kontron is up 0.9 percent. The company raised its first quarter revenue outlook and issued full year revenue forecast. A trader told dpa-AFX that the fiscal year forecast was broadly anticipated. Meanwhile, Commerzbank cut wind turbine maker Nordex to "Hold" from "Buy" but raised the price target to 8.50 euros from 7.50 euros, dpa-AFX said. The company is not likely to be one of the main beneficiaries of the planned expansion of wind energy in Germany, analyst Ben Lynch said. The stock is down 4.5 percent in Frankfurt. In France, Carmaker Peugeot is advancing 1.9 percent, and Renault is up 1.4 percent. In utility stocks, Veolia Environnement is adding 1.4 percent and peer Suez Environnement is up 0.5 percent. Gas utility GDF Suez and electric utilty EDF are climbing 1.4 percent and 1.2 percent, respectively. Among banks, Societe Generale is declining 1.4 percent and Credit Agricole is down 1.15 percent. Natixis and BNP Paribas are also losing. In London, Vedanta Resources is leading the gainers by advancing 4.9 percent. BHP Billiton, Rio Tinto, Antofagasta and Xstrata are advancing between 2.7 percent and 1.4 percent. Standard Chartered and HSBC Holdings are moderately higher. However, Royal Bank of Scotland and Lloyds Banking Group are falling 1.5 percent and 0.5 percent, respectively. Retailer Mark & Spencer is falling 2.6 percent and Next is down 1.5 percent.Vodafone is down 1.2 percent on a broker action. Sainsbury is losing 0.5 percent. Outside the index, Dixons Retail is falling over 18 percent after cutting its profit forecast for 2011. In economic news from the region, eurozone economic sentiment fell to 107.3 in March from 107.9 in the previous month, survey results from the European Commission showed. The consensus forecast called for a score of 107.5. Meanwhile, an indicator measuring credit hurdle for German industry and tradeincreased slightly in March, after fourteen successive months of decline. The Ifo Institute said that its credit constraint indicator inched up by 0.1 percentage point from last month to 23.7% in March. Switzerland's KOF Institute's economic barometer rose to 2.24 in March from an upwardly revised 2.19 in February, rising for a third consecutive month. Economists had expected the index to remain at 2.18. Across Asia/Pacific, barring China, major markets closed higher. Hong Kong's Hang Seng surged 1.7 percent, Japan's Nikkei 225 jumped 2.64 percent and Australia's All Ordinaries climbed 1.27 percent. China's Shanghai Composite Index slipped 0.07 percent. In the U.S., futures point to a higher open on Wall Street. In the previous session, the Dow advanced 0.7 percent, the Nasdaq jumped 1 percent and the S&P 500 rose 0.7 percent. Among commodities, crude for May delivery is sliding $0.37 to $104.42 per barrel and June gold is adding $2.9 to $1420.4 a troy ounce. | ||||||||||||
Asia Market Reports | ||||||||||||
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Asian Markets End In Positive Territory, Lifted By Wall Street Cues Asian markets ended Wednesday's trading session mostly in the green with moderate gains, taking cues from Wall Street where the major averages ended in the positive territory on increasing optimism about the sustainability of economic recovery. Except for the Chinese market, all the other markets in the region ended in the green. In Australia, the benchmark S&P/ASX200 Index surged up 66.40 points, or 1.39 percent, to close at 4,822.20 points, while the broader All Ordinaries Index ended at 4,912.70 points, representing a sharp gain of 61.50 points, or 1.26 percent. On the economic front, a report released by the Australian Bureau of Statisticsrevealed that job vacancies in the country dropped 1.7 percent quarter-on-quarter during the three months to February. The data further noted that during the previous quarter, vacancies grew 6.6 percent over its previous quarter. However, compared to last year, the number of vacancies climbed 12.3 percent. According to trend estimates, the number of vacancies grew 3.6 percent over the previous quarter and was up 20.8 percent year-on-year. Light sweet crude oil futures for May delivery was trading at $104.59 a barrel in electronic trading, down $0.20 per barrel from previous close at $104.79 a barrel in New York on Tuesday. The local currency surpassed the par value against the US dollar and is presently quoted at A$1.0327 per US dollar. Resource related stocks ended in positive territory, lifted by rising Australian dollarvalue against the greenback. BHP Billiton gained 2.04 percent, Rio Tinto climbed 2.43 percent, Fortescue Metals added 1.27 percent, Gindalbie Metals rose 1.84 percent, Iluka Resources soared up 7.28 percent, Macarthur Coal advanced 0.78 percent, Murchison Metals was higher by 0.50 percent, Minara Resources surged by 2.63 percent, and Oz Minerals ended in positive territory with a gain of 0.98 percent. Banking related stocks also ended in the green on optimism about economic growth.ANZ Bank gained 1.57 percent, Commonwealth Bank of Australia rose 1.33 percent, National Australia Bank gained 1.10 percent and Westpac Banking Corp.was higher by 0.75 percent. Investment banking company Macquarie Group ended in the green with a gain of 1.00 percent. Stocks of major retailers also advanced. David Jones advanced 0.85 percent, JB Hi-Fi Ltd gained 1.01 percent, Metcash Ltd surged 3.24 percent, Wesfarmer rose 1.86 percent, and Woolworths was higher by 1.17 percent. However, Harvey Normanbucked the trend and ended in the red with a minor loss of 0.33 percent. In Japan, the market market ended Wednesday's trading session in positive territory with sharp gains, lifting the Nikkei 225 Index above the psychological 9,700-mark. Weaker local currency against the US dollar and the Euro, as well as positive cues from Wall Street where the major averages ended with moderate gains in the previous session, lifted market sentiment. Notwithstanding the concerns about the critical condition of the nuclear reactors, traders evinced fresh buying interest at lower levels ahead of the end of the first quarter of the calendar year 2011, and lifted the broader market indices. The benchmark Nikkei 225 index surged up 249.71 points, or 2.64 percent, to 9,708.79., while the broader Topix Index of first section issues rose 15.88 points, or 1.87 percent, to 866.09. On the economic front, a preliminary report released by the Ministry of Economy, Trade and Industry revealed that industrial production in Japan was up 0.4 percent in February compared to the previous month. That beat forecasts for a 0.1 percent monthly contraction following the 1.3 percent gain in January. On an annual basis, industrial production climbed 2.8 percent - below expectations for a 4.0 percent rise following the 3.5 percent increase in the previous month. A statement released by the Japan Automobile Manufacturers Association, or JAMA, revealed that production of automobiles in the country declined for a fifth consecutive month in February. Production fell 5.5 percent year-on-year to 795,632 units during the month with production of passenger cars falling 6.4 percent over the year. The industry group reported that the domestic sales declined 12.4 percent annually to 401,292 units, while there was a 13.8 percent slump in car sales alone. As many as 80 percent of the 33 broad sectors in the TSE ended in the green during the trading session. Among the non-ferrous metals sector, Sumitomo Electric Industries gained 3.45 percent, Fujikura Ltd surged up 7.71 percent, Sumitomo Metal Mining Co. advanced 1.69 percent, Toyo Seikan Kaisha Ltd rose 1.74 percent, and DOWA Holdings Co.climbed 4.32 percent. Among precision machinery stocks, Terumo Corp. surged up 4.62 percent, Olympus Corp. climbed 3.01 percent, Niken Corp. rose 3.56 percent and Citizen Holdingssoared 4.39 percent. In China, the benchmark Shanghai Composite Index ended in negative territory with a minor loss of 2.17 points, or 0.07 percent, at 2,955.91. In Hong Kong, the benchmark HangSeng Index ended at 23,451.43, sharply higher by 391.07 points, or 1.70 percent from previous close. In Indonesia, the benchmark Jakarta Composite Index ended in positive territory with a gain of 49.46 points, or 1.38 percent, at 3,640.98. In Singapore, the Strait Times Index ended in the green with a gain of 38.37 points, or 1.26 percent, at 3,095.32. In India, the benchmark BSE index ended in the positive territory with a gain of 169.38 points at 19,290.18, while the broader Nifty index ended at 5,787.65, up 51.30 points from previous close. In South Korea, the benchmark KOSPI Index ended at 2,091.38, registering a gain of 19.25 points, or 0.93 percent from previous close. In Taiwan, the benchmark Taiwan Weighted Index ended at 8,646.31, registering a gain of 49.74 points, or 0.58 percent, from previous close. | ||||||||||||
Forex Top Story | ||||||||||||
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Euro At Highest Since Last May Versus Yen The euro extended its highest levels in almost a year versus the yen on Wednesday, but failed to launch against the dollar due to renewed concerns about the European sovereign debt situation. Even with the markets pricing in a rate hike from the European Central Bank in April, the euro has leveled off against the dollar in the absence of a coherent plan to deal with Portugal's debt-driven dilemma. The potential contagion of sovereign debt crisis to other European Union or euro area nations is not insignificant, Executive Board member of the European Central Bank Lorenzo Bini Smaghi said on Wednesday. Yesterday, Standard & Poor's downgraded Greece and Portugal's credit ratings on possible risks to bondholders. Still, the euro has pushed ahead against the yen this week, rising to an 11-month peak of Y114.29. The yen strengthened dramatically earlier this month, but has reversed course after a rare intervention in the currency markets by the Group of Seven nations. The euro has leveled off near $1.41 versus the dollar, having touched a 4-month peak of $1.4247 last week. Private sector employment in the U.S. showed another significant increase in the month of March, according to a report released by payroll processor Automatic Data Processing, Inc. The report said private sector employment rose by 201,000 jobs in March following a downwardly revised increase of 208,000 jobs in February. The euro was down slightly at GBP 0.8780 versus the sterling, after hitting a 5-month peak of GBP 0.8835 in the previous session. Eurozone economic confidence fell more-than-expected in March as the devastating earthquake in Japan and concern over the impact of political unrest in the Middle East on energy prices weighed on the economic outlook. Although at an elevated level, economic sentiment fell to 107.3 from 107.9 in the previous month, survey results from the European Commission showed Wednesday. The consensus forecast called for a score of 107.5.
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