UK markets ended marginally higher on Friday, as an upbeat US employment data for September offset a downgrade of UK banks by Moody’s Investors Service.
Vedanta Resources, the top gainer on the FTSE 100 index, rose 4.2%, after reporting a broad-based production growth.
Rio Tinto, Antofagasta and Xstrata gained between 1.2% and 2.7%, amid easing worries over a double-dip recession in the US and tracking a rise in base metal prices.
Wolseley climbed 4.1%, as Bank of America reiterated its “Buy” recommendation on the stock.
ITV gained 3.4%, after Macquarie initiated coverage on the stock with “Outperform” rating.
Royal Bank of Scotland and Lloyds Banking Group slipped 3.0% and 3.4%, respectively, as Moody’s slashed their senior-debt ratings.
FTSE 100 edged up 0.2% to 5,303.4, while FTSE 250 gained 0.7% to 9,958.0.
European Trading Review
European markets closed in the positive territory on Friday. This came amid speculation that European policy makers would act to resolve the region’s debt crisis, and as better-than-expected US non-farm payrolls data eased investors’ concern about the pace of economic recovery.
Carmakers, BMW, Volkswagen and Daimler, climbed between 1.8% and 4.1%, as concerns about future demand eased.
Continental rallied 4.9%, after the company announced a plan to build a new tire factory at Sumter, South Carolina.
Energy stock, Total, gained 2.9%, in line with a rise in crude oil prices.
Lufthansa, advanced 2.0%, after Weser Kurier reported that German air travel tax might fall.
Gains for European shares were restricted by losses in banking sector stocks, after Moody’s Investors Service downgraded various UK and Portuguese banks.
FTSEurofirst 300 index rose 0.7% to 947.6. German DAX Xetra 30 climbed 0.5% to 5,675.7. French CAC-40 rose 0.7% to 3,095.6.
US Trading Review
US markets ended lower on Friday, led by a decline in financial sector stocks, on increased concerns about the European debt crisis as a credit rating cut for Spain and Italy, overshadowed a better-than expected US employment report.
Sprint Nextel slumped 19.9% and emerged as the top laggard on the S&P 500 index, as it announced plans to raise additional capital for improving its network and handsets.
Bank of America, the top decliner on the DJIA, slipped 6.1%, while JPMorgan Chase, Goldman Sachs and Morgan Stanley lost between 5.2% and 6.2%, as Fitch slashed its rating on Spain and Italy.
Clearwire Corp, the top laggard on NASDAQ, tumbled 32.2%, after its partner, Sprint Nextel, indicated that it might end the companies’ partnership after the current accord ends in 2012.
Genetic analysis tools provider, Illumina tanked 31.9%, after it projected lower revenues for its third-quarter.
DJIA edged down 0.2% to close at 11,103.1. NASDAQ dropped 1.1% to settle at 2,479.4. S&P 500 lost 0.8% to end at 1,155.5.
Forex Trading Review
At 0400 BST today, the GBP is trading 0.2% higher against the USD at $1.5592, 0.4% lower against the EUR at €1.1591, and 0.2% higher against the JPY at ¥119.66.
The EUR is trading 0.6% higher against the USD at $1.3453.
The EUR is trading 0.6% higher against the JPY at ¥103.24.
The EUR is trading higher against the JPY and the USD. This came amid speculation that Europe would prevent the sovereign debt crisis from spreading after French and German leaders pledged to deliver a plan in three weeks to recapitalize banks, and following a rise in US NFP data.
The AUD and NZD are trading higher against the JPY, after US jobs report showed that payrolls rose in September by more-than-forecast, boosting demand for higher-yielding assets.
The AUD also rose against the USD amid speculation that a report this week would show an increase in employment for September in Australia.
On Friday, the USD closed higher against the EUR, as global economic uncertainties resurfaced, after Fitch Ratings downgraded Italy and Spain’s debt rating, prompting investors to invest in the USD as a safe haven asset.
The GBP closed higher against the USD amid optimism that the Bank of England’s decision to initiate its bond-purchase program would help to boost the UK’s slowing economy.
Commodities Trading Review
In Asia, crude oil for November delivery is trading 0.6% or 47 cents higher at $83.45 per barrel.
On Friday, crude oil for November delivery advanced 0.5% or 39 cents to $82.98 per barrel, amid expectation of increase in energy demand, following better-than-expected non-farm payrolls data.
Gains for the crude oil spread betting market were limited as Fitch Ratings downgraded sovereign ratings of Spain and Italy, and Moody’s Investors services downgraded various UK and Portuguese banks.
Gold for immediate delivery is trading 0.9% higher today, at $1,635.26 per ounce.
Gold for December delivery lost 1.1% or $17.40 to end at $1,635.80 per ounce on Friday. This came as demand for the safe haven asset waned amid hopes that the global economy would recover, after US Labour Department reported better-than-expected rise in non farm jobs for September.
Financial Trading News
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'Crude Oil Spread Betting: Downgrade of Spanish and Italian Sovereign Ratings Weigh' edited by ETX Capital, updated 10-Oct-11
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