WORLD MARKET UPDATES
https://globaleconomic-trendsanalysis.blogspot.com/2011/05/world-market-updates_05.html
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With traders showing some caution ahead of Friday's monthly employment report, stocks are turning in a lackluster performance in early trading on Wednesday. The choppy trading comes following the release of payroll processor ADP's report on private employment report. The ADP report showed that private sector employment increased by 179,000 jobs in April, reflecting a slowdown from the job growth seen in March, when the private sector added 207,000 jobs. Economists had expected an increase of about 200,000 jobs. While the continued job growth is a positive sign for the labor market, the slower pace of growth has generated some uncertainty about the Labor Department's monthly report, which includes government jobs. The report is expected to show an increase of about 185,000 jobs in April. Paul Ashworth, Chief U.S. Economist at Capital Economics, said, "Overall, a small dip in employment growth isn't a disaster, but ideally we would have liked to see the growth rate continuing to accelerate." "At this rate it would still take another three and a half years to recover all the jobs lost during the recession," he added. On the earnings front, Kellogg (K) reported first quarter earnings that fell to $1 per share from $1.09 per share in the year-ago quarter, coming in below estimates for earnings of $1.04 per share. At the same time, the food maker said its net sales rose 5 percent to $3.5 billion, above estimates for $3.4 billion. Kellogg also reaffirmed its full-year 2011 guidance for currency-neutral earnings in the range of $3.33 to $3.40 per share. Analysts expect the company to earn $3.48 per share for the year. Media and entertainment giant Time Warner (TWX) said its adjusted first quarter earnings fell to $0.58 per share from $0.61 in the same quarter last year but came in a penny above analyst estimates. The company also reported stronger than expected revenue growth. Time Warner also said it continues to expect its full-year 2011 adjusted earnings to see "low teens" percentage growth compared to last year. In other corporate news, semiconductor equipment maker Applied Materials (AMAT) said it has agreed to acquire rival Varian Semiconductor Equipment Associates(VSEA) for $63 per share in cash or a total price of approximately $4.9 billion. Most of the major sectors are showing only modest moves in early trading, although notable weakness has emerged among energy stocks. A decrease by the price of oil is contributing to the losses by energy stocks, which also fell sharply in the previous session. The major averages are currently turning in a mixed performance, with the tech-heavy Nasdaq posting a modest gain. The Nasdaq is up 5.41 points or 0.2 percent at 2,847.03, while the Dow is down 28.08 points or 0.2 percent at 12,779.43 and the S&P 500 is down 2.39 points or 0.2 percent at 1,354.23. | ||||||||||||||||
European Market Reports | ||||||||||||||||
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European Markets Fall As Economic Worries Persist The European markets are in negative territory in afternoon trading Wednesday, as global economic worries and weak cues from Asia impacted sentiment. Falling U.S. futures and declining commodity prices added to selling pressure. The Euro Stoxx 50 index of euro zone blue chippers is sliding 0.58 percent, while theStoxx Europe 50 index, which includes some major U.K. companies, is slipping 0.55 percent. The German DAX is falling 0.45 percent, the French CAC 40 is receding 0.28 percent and the UK's FTSE 100 is dropping 0.95 percent. However, Switzerland's SMI is advancing 0.30 percent. Henkel is leading the gainers by adding 3.8 percent. The detergent maker reported a rise in first-quarter profit. Merck is advancing 2.7 percent. Merrill raised its rating on the drugmaker's stock to "Buy" from "Underperform" and increased the price target to 85 euros from 65 euros, dpa-AFX said. Among automakers, BMW, Daimler and MAN are notably higher, while Volkswagen is moderately lower. BMW posted a surge in first-quarter profit. Deutsche Bank is rising 1.6 percent, while Commerzbank is falling 0.8 percent. According to dpa-AFX, Merrill increased its price target for Deutsche Bank to 54 euros from 52 euros. Fresenius Medical Care is rising 1.4 percent and Fresenius is advancing 0.4 percent, after reporting higher first-quarter profit. Both companies lifted their full-year targets. Infineon Technologies is adding 1.4 percent. Several brokerages increased their price targets on the stock. Meanwhile, airline Lufthansa is declining 4.55 percent, after confirming the company's 2011 view. Linde, which backed 2011 view as its first-quarter profit improved, is falling 0.9 percent. HSBC raised its price target on K+S to 67 euros from 66 euros, dpa-AFX said. However, the stock is sliding 0.7 percent. In France, speed-train maker Alstom is falling 1.2 percent after reporting a plunge in first-quarter profit. Telecom equipment maker Alcatel Lucent is falling 1.2 percent. BNP Paribas is gaining 2.65 percent after reporting a growth in first-quarter profit.Credit Agricole and Societe Generale are notably higher. Natixis is adding 0.3 percent. In London, Antofagasta is losing 8 percent. Fresnillo, Rio Tinto, Anglo American,Eurasian Natral Resources, Vedanta Resources, BHP Billiton and Kazakhmysare falling between 3.7 percent and 1 percent. Legal & General is down 3 percent after reporting growth in first-quarter worldwide sales. Prudential and Old Mutual are notably lower. Oil stocks BP, Royal Dutch Shell and BG Group are falling between 1.25 percent and 2.85 percent. Retailer Next is surging 4.1 percent. The company reported growth in first-quarter sales.Marks & Spencer and Kingfisher are gaining 3.1 percent and 0.8 percent, respectively. In economic news, eurozone retail sales declined 1 percent in March from February, following February's 0.3 percent rise, Eurostat said. Economists had expected only 0.1 percent fall for March. Meanwhile, the final composite Purchasing Managers' Index for eurozone rose to 57.8 from 57.6 in March, in line with flash estimate. Meanwhile, the number of loans approved for house purchase increased to 47,557 in March from 46,708 in February, the Bank of England said in a report. But it stayed below the expected level of 48,000. Across Asia/Pacific, most major markets ended lower, amid speculation that China may step up tightening measures to tackle inflation. Australia's All Ordinaries lost 0.84 percent, China's Shanghai Composite Index contracted 2.23 percent and Hiong Kong's Hang Seng declined 1.31 percent. The Japanese market is closed. In the U.S., futures point to a lower open on Wall Street. In the previous session, the Dowedged up less than a tenth of a percent, while the Nasdaq fell 0.8 percent and the S&P 500 slipped 0.3 percent. Crude for June delivery is falling $0.37 to $110.68 per barrel, and June gold is slipping $8.6 to $1531.8 a troy ounce. | ||||||||||||||||
Asia Market Reports | ||||||||||||||||
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Indian Market Ends Volatile Session Lower Erasing early losses, the Indian market saw some recovery in the afternoon before giving up all gains and ending modestly lower on Wednesday. With continued selling by foreign funds outweighing positive European cues and a fall incrude prices to below $111 a barrel, the benchmark 30-share Sensex moved in the range of 18,340- 18,604 before settling down 65 points or 0.35 percent at 18,469. Likewise, the broader 50-share Nifty index fell by 28 points or 0.50 percent to 5,537, extended its slide for an eighth consecutive session. The BSE mid-cap and small-capindexes closed down about half a percent each while decliners outpaced gainers in the ratio of 1.5:1 on the BSE. Auto stocks bore the brunt of the selling amid reports that the government may not extend the duty entitlement passbook scheme that benefits exporters beyond June. Bajaj Auto slumped 4.8 percent, Maruti Suzuki declined 1.5 percent and Mahindra & Mahindra shed 0.6 percent. Hero Honda Motors fell 3.6 percent after reporting a 16 percent fall in quarterly net profit. Ashok Leyland lost 1.7 percent after posting dismal April vehicle sales. IT stocks closed on a subdued note despite Cognizant Technology Solutionsreporting strong first-quarter earnings. Infosys fell 1.5 percent while Wipro and TCSedged down marginally. Metal stocks such as Hindalco, JSW steel, Hindustan Zinc, Tata Steel and Nalcolost between 0.4 percent and 2.4 percent as base metal prices eased amid a firmer dollar and concerns over further monetary tightening by Beijing. Heavyweight banking stocks turned in a mixed performance after the severe hammering yesterday. While ICICI Bank ended down 0.9 percent, SBI and HDFC Bank gained about 1.3 percent each. Mortgage lender HDFC closed almost 3 percent lower. Anil Ambani-controlled Reliance Communication fell 2.6 percent, power producerTata Power shed 2.2 percent, telecom giant Bharti Airtel declined 1.5 percent, property developer DLF slipped 0.7 percent and drug maker Cipla ended down 0.3 percent. In the oil/gas sector, state-run oil explorer ONGC climbed 4.8 percent and oil marketing companies such as IOC, HPCL and BPCL rose by 2-4 percent as oil prices eased and reports suggested that a ministerial panel is considering a fuel price hike on May 11. FMCG player Hindustan Unilever added a little over a percent on defensive buying. Power-equipment maker BHEL gained 0.6 percent, engineering & construction giantLarsen & Toubro edged up 0.4 percent and energy giant Reliance Industries ended up 0.3 percent. Punjab National Bank rose 2.4 percent after the country's second-largest state-owned lender posted a modest 5.8 percent increase in quarterly profit. Ranbaxy Laboratories advanced 1.6 percent after a U.S. court rejected Mylan Inc's lawsuit seeking to stop Ranbaxy from launching a generic version of Lipitor in the American market. Talwalkars Better Value Fitness climbed 3.8 percent after it proposed to raise funds via an institutional share placement. Tiles manufacturer Nitco gained 0.7 percent on posting robust quarterly earnings. Jet Airways plunged 4.7 percent after the Bombay High Court reportedly asked the firm to pay Rs 478 crore in dues to Sahara Group along with interest within two weeks. IDBI Bank eased half a percent and Yes Bank lost 1.5 percent after they hiked lending rates. Elsewhere, most Asian stocks fell on Wednesday, with Chinese, Hong Kong andSeoul shares leading the declines, as the dollar rally after bin Laden's death, falling commodity prices, renewed worries over more monetary tightening in China and fears of a revenge attack by al Qaeda terrorists curbed risk appetite. The Japanese market remained shut for a public holiday. European stocks witnessed a moderate rebound after an early fall and the Dow futures pointed to modest gains for U.S. equities later in the global day. The euro roseagainst the dollar in late Singapore trading amid expectations that record-low interest rates in the U.S. will keep the greenback weak. | ||||||||||||||||
Forex Top Story | ||||||||||||||||
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US Dollar Mixed Amid Fading Risk-appetite The U.S. dollar showed mixed performance ahead of the New York session on Wednesday, paring its Asian session gains against the European majors while holding some ground against the yen as the recent run of risk-sentiment faded on renewed fears over more monetary tightening in China and fears of a revenge attack by Al Qaeda terrorists. Stabilizing prices and managing inflation expectations are critical and banks' required reserve requirements have no absolute ceiling, the People's Bank of China said in its quarterly monetary policy report published on Tuesday. The renewed rate hike concerns sent Asian equities broadly lower today with Shanghai composite down more than 2.4 percent. Portugal became the third eurozone country seeking sovereign rescue package afterIreland and Greece. Portugal's caretaker government announced a deal with theEuropean Union and the International Monetary Fund (IMF) on a three-year bailout package worth 78 billion euros ($115 billion) for resolving the EU member-nation's financial problems. The market focus for the day is likely to rest on the ADP's private sector employment report to be released at 8:15 am ET. The report, which is considered precursor to Friday's national employment report, is expected to show that private payrolls expanded by 200,000 in April. The results of the Institute for Supply Management's service sector survey are also likely to influence market sentiment. The report is due at 10 am ET. The non-manufacturing index is expected to ease slightly to 57 in April from 57.3 in March. The dollar retreated from its Asian session highs against the euro, slipping back below 1.4880. The greenback thus eased more than 0.8 percent from Tuesday's 6-day high of 1.4756. The dollar that halted after breaking below the 1.6500 level in the aftermath of yesterday's U.K. PMI shocker staged a rebound to hit a 1-week high of 1.6455 in the Asian session. However, the greenback failed to sustain the gains later and shed more than 0.5 percent. Market players keenly await Thursday's Bank of England and European Central Bank decisions, with both central banks expecting to keep rates on hold at 0.50 percent and 1.25 percent respectively. Meanwhile, rating agency Standard & Poor's said today that a rate hike from the Bank of England is "almost certain" within the next three months as "we think inflation is likely to take off once again, to peak around 5 percent in the third quarter". The research firm noted that recent trends in mortgage approvals signaling that the UK housing market is slowly weakening. The S&P comments came after another weak house lending report from the BOE this morning. The seasonally adjusted Markit/Chartered Institute of Purchasing & Supply purchasing managers' index for the construction sector also fell short of expectations, slipping to 53.3 in April from 56.4 in March. Economists had forecast only a modest fall to 55.9. Eurozone retail sales declined 1 percent month-over-month in March, data published by the Eurostat showed today. That follows February's 0.3 percent rise. Economists had expected a mere 0.1 drop for March. Annually, retail trade dipped 1.7 percent in March, reversing prior month's 1.3 percent growth. The dollar that broke past the 0.86 level against the Swiss franc yesterday for the first time in record, lacked a clear direction today except some early buying in the Asian session. The dollar-franc pair traded in a range between 0.8650 and 0.8605. The dollar was mostly higher against the Japanese yen, hitting as high as 81.20 but failed to make any significant headway to breach its 10-day SMA at 81.55. The greenback was unable to challenge its Asian session's 5-day high of 0.9551against the Canadian dollar in the succeeding trading hours. The dollar-loonie pair traded in a broader-range of 0.9550 and 0.9520. The loonie came under pressure as the price of crude oil eased below $111 today as traders await cues from today's official report on weekly U.S. crude oil inventories.
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