WORLD MARKET UPDATES
https://globaleconomic-trendsanalysis.blogspot.com/2011/05/world-market-updates.html
| US Market Reports | ||||||||||||
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Stocks moved modestly lower at the start of trading on Tuesday, although selling pressure has been relatively subdued, limiting the downside for the markets. Nonetheless, the major averages are pulling back further off the multi-year intraday highs set in the previous session. Profit taking has contributed to the initial weakness on Wall Street, as traders express some uncertainty about the ability of the markets to extend their recent upward move. A decrease in commodities prices is also generating some selling pressure. Oil and gold stocks are seeing moderate weakness in early trading, moving lower along with their related commodities prices. Crude for June delivery is down $1.05 at $112.47 a barrel, while gold for June delivery is down $18.10 at $1,539 an ounce. A majority of the other major sectors have also moved to the downside, although most are showing only modest downward moves. On the other hand, modest strength is visible among utilities stocks. In earnings news, drug giant Pfizer (PFE) is seeing early weakness after the company reported first quarter adjusted earnings of $0.60 per share on revenues of $16.5 billion. Analysts had expected Pfizer to earn $0.59 per share on revenues of $16.65 billion. Pfizer also reaffirmed its full year earnings guidance but lowered its revenue outlook for the year to $65.2 billion to $67.2 billion compared to its previous forecast for revenues of $66 billion to $68 billion. Beazer Homes (BZH) is also trading lower after the homebuilder reported a second quarter loss from continuing operations of $0.74 per share, much wider than the loss of $0.47 per share expected by analysts. The company also reported weaker than expected revenues for the quarter. Meanwhile, credit card giant Mastercard (MA) is moving to the upside after reporting first quarter earnings that rose to $4.29 per share, well above analyst estimates for earnings of $4.10 per share. Mastercard also reported stronger than expected revenue growth. The major averages have fallen to new lows for the session in the past few minutes. TheDow is currently down 27.55 points or 0.2 percent at 12,779.81, the Nasdaq is down 10.13 points or 0.4 percent at 2,853.95 and the S&P 500 is down 4.63 points or 0.3 percent at 1,356.59. | ||||||||||||
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| European Market Reports | ||||||||||||
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European Markets Fall As Laden Euphoria Fades The European markets are in negative territory in afternoon trading Tuesday, as euphoria over the killing of Osama bin Laden faded and investors became more concerned about global economic issues. Sentiment was also impacted by weak cuesfrom Asia and the previous session on Wall Street. Carmakers are witnessing downside. The Euro Stoxx 50 index of eurozone blue chippers is declining 0.79 percent, while theStoxx Europe 50 index, which includes some major U.K. companies, is dropping 0.65 percent. The German DAX is losing 0.94 percent and the French CAC 40 is falling 0.82 percent. The UK's FTSE 100 turned negative in afternoon trading and is sliding 0.21 percent. Switzerland's SMI is declining 0.65 percent. Volkswagen is losing 2.75 percent in Frankfurt. Other car manufacturers BMW andDaimler are retreating 2.5 percent and 1.1 percent, respectively. Truckmaker MAN is falling 0.4 percent, despite reporting a surge in first-quarter profit. Renault is declining 1.7 percent in Paris. According to dpa-AFX, JP Morgan cut its price target on the stock to 64 euros from 69 euros. Peer Peugeot is down 1.4 percent. Department stores operator Metro is sliding 2.4 percent on the DAX. The company reported a narrower loss for the first quarter, despite flat sales. Commerzbank and Deutsche Bank are moderately lower. JP Morgan raised its price target on Deutsche Bank to 43 euros from 41 euros, dpa-AFX said. Credit Agricole,Societe Generale, BNP Paribas and Natixis are in the red in Paris. Infineon Technologies is leading the gainers by adding 2.9 percent. The German chipmaker reported a sharp increase in second-quarter profit, as revenues grew 27 percent driven by growth across all its operating segments. The company also raised its sales growth outlook for fiscal 2011. Business software maker SAP is gaining 1.5 percent. Merck is rising 1.6 percent. Barclays raised its rating on the stock to "Equal Weight" from "Under Weight" and increased its price target to 72 euros from 63 euros, dpa-AFX said. In London, Randgold Resources is falling 2.1 percent. Antofagasta, Kazakhmys,Eurasian Natural Resources, Vedanta Resources and BHP Billiton are declining between 2 percent and 1.2 percent. Among retailers, Marks & Spencer, Next and Kingfisher are losing between 2.1 percent and 1.7 percent. BP is down 1.35 percent. Royal Dutch Shell is up 0.3 percent. Asset manager Man Group, which announced the launch of its AHL open-ended fund in Japan, is rising 3.3 percent. Imperial Tobacco is up 1.5 percent on a positive broker recommendation. In economic news, Euro area producer price inflation accelerated for the fifth straight month in March, data from Eurostat showed. The total industry producer prices on the domestic market excluding construction rose 6.7 percent year-on-year, faster than February's 6.6 percent increase. Economists had expected the rate to hold steady at 6.6 percent. British manufacturing sector activity growth eased to a seven-month low in April, data from Markit Economics revealed. The headline seasonally adjusted Markit/Chartered Institute of Purchasing & Supply Purchasing Managers' Index came in at 54.6 in April, down from 56.7 in March. Economists had expected it to fall to 57. Across Asia/Pacific, most major markets ended in the red. Australia's All Ordinarieslost 0.85 percent and Hong Kong's Hang Seng retreated 0.37 percent. However, China'sShanghai Composite Index gained 0.71 percent. The Japanese market is closed for apublic holiday. In the U.S., futures point to a lower open on Wall Street. In the previous session, the Dow edged down less than a tenth of a percent, the Nasdaq fell 0.3 percent and the S&P 500slipped 0.2 percent. Crude for June delivery is sliding $1.12 to $112.40 per barrel, while gold is sliding $14.2 to $1542.9 a troy ounce. | ||||||||||||
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| Asia Market Reports | ||||||||||||
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Indian Market Tumbles On Interest Rate Worries The Indian market fell sharply on Tuesday, with rate-sensitive auto, banking and realty stocks taking the plunge, after the Reserve Bank of India hiked repo and reverse repo rates by a higher-than-expected 50 basis points and warned that persistently high prices of oil and other commodities pose a risk to growth. Majority of market participants had expected only a quarter point hike. With inflation expected to remain at an elevated level in the first half of the year, the central bank lowered the baseline economic growth forecast to around 8 percent in 2011-12 from 8.6 percent in 2010-11. Meanwhile, the apex bank has left the cash reserve ratio, or CRR, at 6 percent and hiked the savings bank deposit interest rate to 4 percent from 3.5 percent, with immediate effect. Finance minister Pranab Mukherjee supported RBI's hawkish stance on monetary policy and said the increase in the key rates was necessary to contain inflation. Heavy selling in rate-sensitive stocks pulled the benchmark 30-share Sensex down by about 465 points or 2.44 percent while the broader 50-share Nifty index fell by 136 points or 2.39 percent to 5,565. Second-line stocks also witnessed a free fall and the market breadth remained extremely negative, with losing shares outpacing gaining ones in the ratio of about 3:1 on the BSE. State-owned lender SBI slumped over 4 percent, private sector rival ICICI Bank lost 2.8 percent and HDFC Bank ended down 2.4 percent on worries that a tough monetary stance will put significant pressure on the bottomline of banks. Mortgage lender HDFCshed 2.1 percent. High-beta realty stocks such as Orbit Corp, DLF, Parsvnath Developers, HDIL,Unitech and D B Realty fell by 2-5 percent on concerns that hardening interest rates will hit demand for loans against properties. Auto stocks such as Hero Honda Motors, Ashok Leyland, Mahindra & Mahindra,Bajaj Auto and Tata Motors followed suit to end about 2-5 percent lower. Infrastructure firm Jaiprakash Associates plummeted 8 percent, engineering & construction giant Larsen & Toubro fell 4.2 percent, aluminum maker Hindalco and FMCG player Hindustan Unilever lost about 3.2 percent each, state-owned oil explorerONGC declined 3 percent and software services exporter Wipro eased 2.6 percent. Adani Group-owned Mundra Port and Special Economic Zone fell 3.5 percent after it acquired Abbot Point Coal Terminal in Queensland state of Australia for $2 billion. Dabur India lost 0.9 percent after it signed a pact to buy the '30-Plus' energizing capsules brand from Mumbai-based Ajanta Pharma. South Indian Bank eased half a percent on fund raising reports. Ceat tumbled 5.2 percent, extending Monday's slump, after the tyre maker reported a Rs.11.86-crore net loss for the quarter ended March. Bearings manufacturer SKF India fell 3.2 percent despite reporting a 40 percent rise in quarterly net profit. Essar Shipping Ports & Logistics plunged 5 percent on dismal fourth-quarter results. Power-equipment maker BHEL bucked the downward trend to end 0.2 percent higher on a brokerage upgrade. Amrutanjan Health Care closed up 2.80 percent ahead of a board meet today to consider a share buyback. Maharashtra Seamless added 2.5 percent on posting strong quarterly earnings. On the global front, the other Asian markets barring Chinese stocks ended notably lower, as the euphoria over the killing of Osama bin Laden by American commandos faded and the dollar strengthened against major currencies, putting some pressure on commodities such as copper, gold and oil. The Japanese markets remained shut for a public holiday. China's Shanghai Composite index finished 0.71 percent higher, helped by gains in utilities and manufacturers, with falling commodity prices and better-than-expected corporate earnings in 2010 offering support. European stocks were broadly lower in early trading, with automakers and miners leading the declines, while trading in the U.S. stock index futures suggested that theDow could fall 33 points at the opening bell later in the global day. | ||||||||||||
Forex Top Story | ||||||||||||
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Safe-haven Dollar Up Amid Risk-aversion The US dollar traded mostly higher against its major rivals, barring the yen, as market elation over the death of Osama bin Laden dissipated. As a result, global stocks trimmed their recent gains, which in turn supported the so-called safe-haven currencies. Asian and European equities traded in negative territories today as fears of retaliation from Al Qaeda prompted traders to stay on the sidelines ahead of this week's crucial macro-economic events. The economic calendar of the day is fairly light today. At 10 am ET, the Commerce Department is set to release the factory goods orders report for March. Economists estimate a 2 percent increase in orders. The dollar that broke below the psychological mark of 1.49 against the euro on Monday staged a rebound today, reaching a 6-day high of 1.4756. On the upside, the dollar could test its 10-day SMA of 1.4690. Although the dollar snapped back against the common currency, market players believe the dollar bounce may be short-lived on speculation that the widening interest-rate gap with the U.S. is likely to boost the euro. The European Central Bank is due to announce its monetary policy decision on Thursday. Euro area producer price inflation accelerated for the fifth straight month in March, data from Eurostat showed today. The total industry producer prices on the domestic market excluding construction rose 6.7 percent year-on-year, faster than February's 6.6 percent increase. Economists had expected the rate to hold steady at 6.6 percent. On a monthly basis, producer prices rose in line with expectations. Prices increased 0.7 percent, following a 0.8 percent rise in the previous month. The dollar fell to as much as 80.72 against the yen for the first time since the G7 intervention in March as global risk-aversion lifted the safe-haven boost of the latter across the board, although the Tokyo markets closed for the Golden Week holiday. The greenback appreciated almost 1.15 percent to a 6-day high of 1.6470 against thepound, as the British manufacturing sector activity growth eased to a seven-month low in April and also fell far short of expectations. Data from Markit Economics revealed today that the headline seasonally adjusted Markit/Chartered Institute of Purchasing & Supply Purchasing Managers' Indexcame in at 54.6 in April, down from 56.7 in March. Economists had expected it to fall to 57. Bank of England Governor Mervyn King said an increase in the long-term interest rates could pose massive economic challenges, given the high level of indebtedness. As the volume of debt in the economy is still large, raising interest rates would add expense of the governments across Europe, he told European parliament on Monday. The Bank of England is widely expected to maintain its key interest rate at a historic low of 0.5 percent at its upcoming monetary policy meet on May 5. The dollar is presently trading at 0.8655 against the Swiss franc, having gained more than 30 pips from its Asian session's record low of 0.8622. The greenback backtracked from Monday's fresh multi-year lows against theCanadian dollar, successfully challenging its 10-day simple moving average and climbing to a 4-day high of 0.9544. The Canadian dollar came under pressure as crude oil, the nation's largest export, slipped to near $112 a barrel Tuesday morning amid a firm U.S. dollar. Canada's ruling conservatives won a crushing victory in a federal election, with the conservatives getting 166 seats in Parliament, a number well above needed to transform their minority government into a majority for the fist time. Elsewhere, the Central Banks of Australia and India were in the traders' radar today with the Reserve Bank of Australia leaving its benchmark interest rate unchanged for a sixth straight month, while India's Reserve Bank raised interest rates by a sharper-than-expected 50 basis points.
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