UK markets logged gains yesterday, as successful bond auctions in Spain and France and better-than-expected corporate earnings and robust economic data from the US boosted market sentiment.
Barclays, the top gainer on the FTSE 100 index, surged 10.1%, while Royal Bank of Scotland and Lloyds Banking Group rallied 8.9% and 9.1%, respectively, as their US peers posted better-than-expected results.
International Consolidated Airlines rose 6.5%, after Qatar Airways stated that it is mulling a potential acquisition in the region.
Land Securities Group rose 5.7%, after Exane BNP Paribas upgraded the stock to “Outperform” from “Neutral”.
G4S gained 0.4%, as JP Morgan Cazenove lifted its rating on the stock to “Overweight” from “Neutral”.
Associated British Foods gained 1.9%, after it announced a 12% increase in first-quarter revenue.
FTSE 100 gained 0.7% to settle at 5,741.2, while FTSE 250 surged 1.4% to end at 10,808.3.
European Trading Review
European markets closed higher yesterday, led by impressive gains in banking sector stocks, after Spain and France successfully auctioned €14.6 billion in government bonds, easing investors’ concerns about the Eurozone debt crisis. Additionally, a drop in US weekly jobless claims buoyed market sentiments.
Banking stock, Commerzbank soared 15.0%, after the company announced measures to boost capital or reduce its equivalent in risk-weighted assets.
Among other banking stocks, BNP Paribas, Deutsche Bank and UBS surged between 8.1% and 8.4%, after positive comments from Morgan Stanley.
Porsche rose 8.3%, after the company announced that it offered to settle claims by a group of US investment funds.
Alstom surged 14.0%, after the company forecasted an increase in orders and sales in the fourth quarter.
FTSEurofirst 300 index added 1.1% to 1,046.3. German DAX Xetra 30 advanced 1.0% to end at 6,416.3. French CAC-40 rose 2.0% to 3,328.9.
US Trading Review
US markets closed higher yesterday, as weekly jobless claims tumbled to a near four-year low and on better-than expected corporate earnings, shrugging off data showing a drop in housing starts.
Bank of America, the top gainer on the DJIA index, climbed 2.4%, while Morgan Stanley rallied 5.4%, after their fourth-quarter results exceeded market expectations.
Family Dollar Stores rose 2.5%, as it raised its quarterly dividend by 17%.
F5 Networks jumped 10.6%, as it reported robust first-quarter earnings and issued an upbeat outlook for the current quarter.
Union Pacific and Ebay rose 2.2% and 3.9%, respectively, after their fourth-quarter earnings topped market expectations.
Sears Holdings gained 9.8%, amid report that CIT Group would approve financing for the company’s vendors.
DJIA edged up 0.4% to close at 12,624.0. NASDAQ climbed 0.7% to end at 2,788.3. S&P 500 gained 0.5% higher to settle at 1,314.5.
Forex Trading Review
At 0400 BST today, the GBP is trading marginally higher against the USD at $1.5489, marginally higher against the EUR at €1.1947, and marginally higher against the JPY at ¥119.39.
The EUR is trading marginally higher against the USD at $1.2964.
The EUR is trading marginally higher against the JPY at ¥99.93.
The EUR is trading higher against the JPY and the USD, as demand for high yielding currencies increased, after the Greek Finance Minister, Evangelos Venizelos, stated that the government has made progress in the debt swap deal. There was also speculation that a report would show that sales of existing US homes rose to the highest in one and half years.
The USD is trading lower against most of its major peers, amid speculation that the central bank might keep its benchmark interest rate at a record low through at least the middle of next year at its rate-setting meeting next week.
Yesterday, the EUR ended higher against the USD and the JPY, after Spain and France sold bonds at lower yields at the auction of their medium and long-term bonds, and as Greece continued a second day of talks with private creditors to resolve its debt crisis.
The AUD closed lower against most of its major peers, after a report showed that the number of people employed in Australia fell by 29,300 in December.
The NZD/USD closed lower after New Zealand’s consumer price index (CPI) unexpectedly dropped in the final quarter of 2011.
Commodities Trading Review
In Asia, crude oil for February delivery is trading 0.1% or 11 cents higher at $100.50 per barrel.
Yesterday, crude oil for February delivery dropped 0.2% or 20 cents to end at $100.39 a barrel. This came amid demand worries, after manufacturing activity in the Philadelphia area rose less-than-expected in January.
Losses for crude remained in check on better-than-expected US initial jobless claims data, and after the US energy department report showed that US crude oil inventories had dropped in the week ended 13 January.
Gold for immediate delivery is trading 0.1% higher today, at $1,656.47 per ounce.
Gold futures for February delivery fell 0.3% or $5.40 to end at $1,654.50 per ounce yesterday. This came as robust US economic data and successful Spanish and French government bond auctions increased speculation that the global economy is recovering, decreasing the demand for gold as a safe haven asset.
Financial Trading News
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