UK markets closed mixed yesterday, as losses arising from negative corporate updates were offset by gains due to a pickup in merger & acquisition activity.
Shares of ENRC jumped 4.7%, as the Sunday Times reported that Glencore may acquire the company.
Invensys benefited from a Sunday Times report which pointed to a likelihood of sale of the company’s pension program for £4.2 billion that could make it a potential takeover target.
Lloyds Banking Group, up 1.4%, led the banking sector higher, on reports of another 15,000 jobs cut at the bank, and speculation that Bank of China was mulling acquisition of branches which Lloyds has put up for sale.
Gains for the FTSE 100 were restricted following profit warnings from Imperial Tobacco and Carnival.
FTSE 100 added 0.1% or 7.7 points to 5,773.5. FTSE 250 edged down 0.1% or 6.6 points to 11,779.5.
European Trading Review
European markets finished higher, helped by positive broker reviews and corporate updates.
Shares of Deutsche Telekom edged up 1.3%, as Royal Bank of Scotland Group advised investors to take a bullish stance on shares of the company.
Adidas rose 1.6%, as the Frankfurter Rundschau, citing an interview with Chief Executive Officer Herbert Hainer, reported, that the company’s objective was to reach a target of €500 million ($719 million) in sales of outdoor products by 2015 without acquisitions.
Shares of Peugeot gained 1.9%, as Citigroup upgraded the stock to “Buy” from “Hold”, and increased its price target to €36 from €33, citing its growth potential in Latin America.
FTSEurofirst 300 index climbed 0.2% to 1,091.9. German DAX Xetra 30 rose 0.2% or 15.2 points to 7,085.1. French CAC-40 edged up 0.1% or 2.5 points to close at 3,807.6.
US Trading Review
US markets closed mostly higher yesterday, as a spur in corporate activity boosted market sentiment. However, gains were pared, following S&P’s downgrade of credit rating on Greece, and a fall in commodity stocks.
Reinsurer, Transatlantic rallied 9.5%, after announcing to merge with Switzerland’s Allied World Assurance.
Apparel Manufacturer, VF Corp, surged 10.0%, after it stated that it would acquire Timberland, the footwear company, in a $2billion cash deal.
Timberland jumped 44.0%. Also, Wendy’s/Arby’s Group, Ness Technologies and Graham Packaging posted gains between 0.9% and 16.8%, on the back of acquisition reports.
Energy stocks, Chevron, Cameron International and Chesapeake Energy, recorded losses between 0.7% and 3.1%, as oil prices lost ground, while material stocks, Freeport-McMoRan Copper & Gold and Titanium Metals retreated, in line with a decline in metal prices.
DJIA rose marginally to 11,953.0. NASDAQ slid 0.2% to 2,639.7. S&P 500 gained 0.1% to 1,271.8.
Forex Trading Review
At 0400 BST today, the GBP is trading 0.2% higher against the USD at $1.6401, 0.2% up against the EUR at €1.1373 and 0.2% stronger against the JPY at ¥131.52.
The EUR is trading marginally higher against the USD at $1.4421.
The EUR is trading slightly higher against the JPY at ¥115.65, as most Asian markets traded higher, increasing the demand for high yielding assets.
The AUD and NZD are trading higher against the USD, amid expectations that positive Chinese economic reports would boost both nation’s exports.
Yesterday, the GBP/EUR rose, as disagreement among European leaders over finding a solution to the region’s debt crisis drove investors to seek UK assets.
Commodities Trading Review
In Asia, crude oil for July delivery is trading 8 cents lower at $97.22 per barrel.
Yesterday, crude oil for July delivery closed 2.0% or $1.99 lower at $97.30 per barrel, amid persisting doubts over the pace of the global economic recovery.
Gold for immediate delivery is trading 0.3% higher today, at $1519.27 per ounce.
Gold prices for August delivery lost 0.9% or $13.60 to $1,515.60 per ounce yesterday, as some investors sold the precious metal to cover losses in equity markets.
Financial Trading News
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'Crude Oil Trades Lower Amid Concerns Over Economic Growth' edited by ETX Capital, updated 14-Jun-11
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