UK markets ended higher yesterday, after China posted a higher-than-expected trade surplus and as Fitch reiterated that it was not mulling to cut France’s AAA debt rating in 2012.
Among energy stocks, Cairn Energy gained 3.3%, after it provided details of a planned $3.5 billion payout to shareholders following the sale of a majority stake in its Indian business to Vedanta Resources.
Kazakhmys, Vedanta Resources and Antofagasta jumped between 5.0% and 5.9%, after data indicated that China’s imports of copper touched a record high in December.
Precious metal miners, Randgold Resources and Fresnillo advanced 4.6% and 5.7%, respectively, led by a surge in gold and silver prices.
Royal Bank of Scotland and Barclays logged gains of 5.3% and 5.7%, respectively, amid improvement in investors’ sentiment.
Aviva added 2.7%, amid speculation of receiving a takeover bid from Chinese insurer Ping An.
FTSE 100 surged 1.5% to close at 5,696.7, while FTSE 250 climbed 0.9% to end at 10,347.7.
European Trading Review
European markets closed sharply higher yesterday, led by a surge in banking sector stocks, after Fitch Ratings’ announced that it would not downgrade France's triple-A credit rating this year, easing investors’ concern about the European sovereign debt crisis.
Banking stock, Commerzbank surged 4.8%, after the company announced that its refinancing needs dropped to €6 billion in 2012, while UniCredit soared 6.0%, as investors deemed the shares to be cheaply valued, after it plunged 47.0% in five days.
Carmakers, Volkswagen, BMW and Daimler, rose between 3.2% and 4.2%, after these companies stated that they expect their sales to exceed market growth in 2012 following record sales last year.
Insurers, Allianz and Axa climbed 4.7% and 7.6%, respectively, benefiting from a recovery in the equity markets.
FTSEurofirst 300 index climbed 1.8% to 1,027.2. German DAX Xetra 30 rose 2.4% to 6,163.0. French CAC-40 rose 2.7% to 3,210.8.
US Trading Review
US markets closed higher yesterday, as a solid start to the earning season lifted market sentiment. Additionally, China’s wider-than-expected trade surplus in December added to the momentum, raising expectations for monetary easing in China.
Bank of America, Goldman Sachs and Morgan Stanley climbed between 2.1% and 5.7%, after Fitch Rating Services stated that it does not plan to downgrade France’s triple-A rating in 2012.
Caterpillar and FedEx rallied 2.9% and 3.1%, respectively, amid easing worries over economic growth.
Automotive parts maker, BorgWarne surged 12.3%, and emerged as the top riser on the S&P 500 index, as it provided upbeat earnings guidance for 2012.
Audio products maker, VOXX International soared 20.6%, after its third-quarter results surpassed market expectations.
Life Technologies Corporation added 8.3%, after it unveiled a DNA reading product.
DJIA climbed 0.6% to close at 12,462.5. NASDAQ added 1.0% to end at 2,702.5. S&P 500 rose 0.9% to settle at 1,292.1.
Forex Trading Review
At 0400 BST today, the GBP is trading 0.1% lower against the USD at $1.5457, marginally lower against the EUR at €1.2128, and 0.1% lower against the JPY at ¥118.85. British Chambers of Commerce stated that Bank of England’s stimulus might not be enough to revive UK’s economic growth.
The EUR is trading 0.1% lower against the USD at $1.2745. The EUR is trading marginally lower against the JPY at ¥98.0.
The EUR is trading lower against the USD and the JPY, amid speculation that industrial production in the European region might show a decline for a third month in November.
The USD is trading higher against the AUD and the NZD, ahead of Spain and Italy’s debt auction this week, amid speculation that the countries’ credit ratings might be downgraded.
Yesterday, the EUR closed lower against the USD, after ratings agency Fitch warned that Italy still remains at substantial risk for an imminent downgrade.
The AUD and the CAD ended higher against the USD, amid higher commodity prices, after China reported that its trade surplus had widened sharply in December to $16.52 billion, increasing the demand for the commodity linked currency.
The GBP closed lower against the AUD and the NZD, amid speculation that China would take steps to drive economic growth, decreasing demand for the UK assets as a refuge.
Commodities Trading Review
In Asia, crude oil for February delivery is trading 0.4% or 39 cents lower at $101.85 per barrel.
Yesterday, crude oil for February delivery advanced 0.9% or 93 cents to settle at $102.24 per barrel. This came amid growing concerns that the dispute between Iran and the western governments might lead to a disruption in Middle East crude exports.
Gold for immediate delivery is trading 0.1% higher today, at $1,637.40 per ounce.
Gold for February delivery added 1.5% or $23.40 to settle at $1,631.50 per ounce yesterday. This came as prospects of aggressive monetary easing from the world's key central banks and hopes for strong physical demand spurred investment in the yellow metal.
Financial Trading News
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'Concerns Over Iranian Tensions Push Crude Oil Spread Betting Market Higher' edited by ETX Capital, updated 11-Jan-12
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