Financial Spread Betting Markets Surge on Speculation of Further Chinese Stimulus
The regular trading review of the main UK, US and European markets, plus a quick look at the commodities and forex markets.
For today's report see Financial Trading Review.
Financial Trading Review - 30 May 2012
UK Trading Review
UK financial spread betting markets ended higher yesterday, led by gains in mining sector stocks, amid speculation that China would increase stimulus to boost its economy. Investors also responded positively to encouraging housing market data in the US.
Miners advanced, with BHP Billiton, Anglo American, Rio Tinto, Anglo American and Kazakhmys climbing between 1.3% and 2.9%, amid reports of approval of some new steel plants in China.
Kazakhmys and Rio Tinto also rose following a “Buy” recommendation from Societe Generale. Tullow Oil added 3.1%, following last week’s drilling update in Kenya.
BG Group gained 1.6%, after it agreed to sell its entire 60.1% stake in Comgas.
International Airlines Group rallied 4.1%, as UBS reiterated its “Buy” rating on the stock, while InterContinental Hotels rallied 2.3%, amid speculation that it might become a takeover target.
FTSE 100 added 0.6% to settle at 5,391.1, while FTSE 250 surged 1.4% to close at 10,657.9.
European Trading Review
European markets closed higher yesterday, as prospect for more stimulus measures in China and signs of stabilization in the US housing market buoyed market sentiment.
However, gains were limited as concerns grew that Spanish banks would need more financial support to withstand Eurozone’s debt crisis.
Steelmaker, ArcelorMittal, climbed 4.1%, after HSBC raised its recommendation on the stock to “Overweight” from “Neutral”.
Volkswagen, Bayerische Motoren Werke and Daimler, gained between 2.5% and 3.9%, on hopes that China’s efforts to fuel its economic growth might boost exports for the carmakers.
Oilfield-services firm, CGGVeritas, rallied 5.7%, after UBS upgraded the stock to “Buy” from “Neutral”.
Valeo added 3.9%, after positive comments from a broker.
FTSEurofirst 300 index added 0.7% to 991.0. German DAX Xetra 30 rose 1.2% to 6,396.8. French CAC-40 closed 1.4% higher at 3,084.7.
US Trading Review
US markets rallied sharply yesterday, as rising prospects that Greece would remain in the euro and hopes that China would introduce fresh stimuli to boost its economic growth outweighed a disappointing reading on US consumer confidence.
Chesapeake Energy advanced 3.4%, as the activist investor, Carl Icahn reported a 7.6% stake in the company on Friday and called for change of at least four directors.
Coal producers, Consol Energy and Peabody Energy rallied 1.8% and 5.6%, respectively, as Goldman Sachs raised its recommendation for the sector to “Attractive” from “Neutral”.
PulteGroup and DR Horton advanced 2.0% and 2.5%, respectively, after as a report showed US home prices stabilized in the year ended March.
Caterpillar rose 2.9%, amid speculation that China was preparing a new round of stimulus measures.
DJIA gained 1.0% to close at 12,580.7.NASDAQ surged 1.2% to settle at 2,871.0. S&P 500 soared 1.1% to end at 1,332.4.
Forex Trading Review
At 0400 BST today, the GBP is trading 0.1% lower against the USD at $1.5613, marginally lower against the EUR at €1.2527, 0.2% lower against the JPY at ¥124.09.
The EUR is trading 0.1% lower against the USD at $1.2464. The EUR is trading 0.2% lower against the JPY at ¥99.06.
The EUR is trading lower against the USD and the JPY, amid speculation that the European debt crisis would worsen, after Spain’s borrowing costs climbed.
EUR also traded lower before the release of a report on consumer confidence in the euro area.
The AUD is trading lower against most of its major peers, amid speculation that the Reserve Bank of Australia would lower its borrowing costs, after a report showed that retail sales in Australia unexpectedly declined in April.
Also in forex trading, the NZD is trading lower against the USD and the JPY, after report showed that home building approvals in New Zealand declined 7.2% in April from a revised 19.6% gain in March.
Yesterday, the EUR finished lower against most of its major peers, after Egan-Jones downgraded Spain's credit rating to “B” from “BB-” and after reports showed that Spanish retail sales declined in April.
The GBP closed higher against the EUR, as investors preferred the relative safety of the British currency, after Spain announced that it might need to sell bonds for a banking rescue.
The currency also appreciated after an index of UK retail sales rose to its highest level in more than a year in May.
The CAD ended lower against the USD, as a drop in base metal and crude oil prices decreased the demand for the commodity linked currency.
Commodities Trading Review
In Asia, crude oil for July delivery is trading 0.4% or $0.38 lower at $90.38 per barrel.
Yesterday, crude oil for July delivery eased 0.1% or 10 cents to settle at $90.76 per barrel, amid concerns about the European economic problems after Egan-Jones Ratings downgraded Spain’s credit rating to junk status.
However, losses were limited amid concerns about supply disruptions as dispute between western power and Iran over its nuclear program remained unresolved and as a report showed that China's biggest banks had accelerated lending.
Gold for immediate delivery is trading 0.4% lower today, at $1,547.36 per ounce.
Gold for August delivery fell 1.3% or $20.20 to settle at $1,551 per ounce yesterday.
This came as the dollar appreciated against the euro and as investors continued to focus on Spain’s deteriorating financial situation after a credit rating agency downgraded Spain’s credit rating to “B” from “BB-”.
Financial Trading News
For more daily views, news and analysis of the markets also see:
The above comments do not constitute investment advice and neither ETX Capital nor Clean Financial accept any responsibility for any use that may be made of them. Any prices or data are indicative and subject to change without notice; its accuracy is not guaranteed and should not be relied on.
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'Financial Spread Betting Markets Surge on Speculation of Further Chinese Stimulus' edited by ETX Capital, updated 30-May-12
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