UK markets finished lower yesterday, as uncertainty over the implementation of the rescue plan for Greece and speculations whether the rescue package would be sufficient to stem the nation’s debt problem, weighed on market sentiment.
Chipmaker, CSR ended 5.1% lower, after a broker cut its rating on the stock to “Hold” from “Buy”.
Tullow Oil fell 3.6%, amid speculation that the production from company’s Jupiter well, off the coast of Sierra Leone, would be below market expectations.
BG group slipped 1.9%.
William Morrison Supermarkets slipped 0.8%, after Goldman Sachs downgraded the stock to “Conviction Sell”.
Segro retreated 2.1%, following higher-than-expected write down of its peripheral assets.
Homeserve dropped 3.6%, after its peer, CPP Group, warned on Monday that penalties for misselling could put it out of business.
FTSE 100 shed 0.3%, to close at 5,928.2, while FTSE 250 slipped 0.4%, to settle at 11,379.5.
European Trading Review
European markets finished lower yesterday, led by losses in banking sector stocks, amid speculation the additional rescue package would not be sufficient to stem Greece’s underlying debt problem. Moreover, disappointing corporate updates dampened market sentiment further.
Banking stocks, Deutsche Bank, National Bank of Greece and Intesa Sanpaolo, dropped between 2.1% and 9.5%, as risk appetite decreased among investors.
ThyssenKrupp fell 2.7%, after UBS downgraded the stock to “Sell” from “Neutral”.
Consumer sector stock, CSM, sank 9.9%, after the company reported an unexpected full-year net loss of €174 million.
Retailer, Colruyt, dropped 2.1%, after Goldman Sachs Group downgraded the stock to “Conviction Sell” from “Neutral”.
Fresenius Medical slipped 1.0%, after it forecast 2012 sales and profit that fell short of market expectations.
FTSEurofirst 300 index declined 0.5% to close at 1,085.4. German DAX Xetra 30 fell 0.6% at 6,908.2. French CAC-40 dropped 0.2% to end at 3,465.2.
US Trading Review
US markets closed mostly higher yesterday, after European officials approved the $173 billion in aid for Greece to rescue it from a credit default.
Oil stocks, Chevron and Exxon Mobil gained 1.6% and 1.1%, respectively, tracking higher crude oil prices.
Leisure sector stock, Wynn Resorts, rallied 6.0%, after the company bought out its largest shareholder stake at a 31.0% discount.
Retailer, Macy’s rose 1.2%, after the company reported less-than-expected decline in its fourth-quarter earnings.
Home Depot gained 0.5%, after the company’s fiscal fourth-quarter earnings surpassed market expectations.
Apple rose 2.5%, after the US International Trade Commission ruled that the company did not infringe patented technology owned by HTC.
Wal-Mart lost 3.9%, as its fiscal fourth-quarter earnings fell short of market expectations.
DJIA closed 0.1% higher to settle at 12,965.7. NASDAQ ended 0.1% lower at 2,948.6. S&P 500 added 0.1% to end at 1,362.2.
Forex Trading Review
At 0400 BST today, the GBP is trading marginally lower against the USD at $1.5785, 0.1% higher against the EUR at €1.1928, and marginally higher against the JPY at ¥126.11.
The EUR is trading 0.1% lower against the USD at $1.3232. The EUR is trading 0.1% lower against the JPY at ¥105.74.
The EUR is trading lower against most other currencies, amid concerns over Greece’s ability to implement the austerity measures and uncertainty over the nation’s long-term outlook.
The USD is trading higher against the JPY, amid speculation that accelerating growth would reduce the need for additional quantitative easing from the US Federal Reserve. The USD also rose amid speculation that a report would show stabilization in the US housing market.
The AUD and the NZD depreciated against most of their major peers after a survey showed that manufacturing PMI in China might shrink for a fourth month.
Yesterday, the EUR closed higher against the USD, after the European finance ministers approved the second international bailout package for Greece.
The AUD ended lower against the USD, after the Australia’s Reserve Bank stated in minutes of its policy meeting this month that there was scope for monetary easing should demand “weaken materially”.
The JPY closed lower against most of its major peers, after Japan’s central bank increased its asset-purchase fund to ¥30 trillion last week.
The USD/CAD rose after data showed that Canada’s retail sales fell in December.
Commodities Trading Review
In Asia, crude oil for April delivery is trading 0.1% or 11 cents lower at $106.13 per barrel.
Yesterday, crude for March delivery advanced 2.5% or $2.60 to settle at $105.84 per barrel, after Eurozone finance ministers agreed on a second bailout package for Greece.
Crude oil also gained value, after Iran stated that it would sell its crude oil to new customers instead of French and UK companies.
Gold for immediate delivery is trading 0.1% lower today, at $1756.24 per ounce.
Gold for April delivery rose 1.9% or $32.60 to end at $1,758.50 per ounce yesterday. This came amid uncertainty over Greece’s ability to recover and avoid a default, despite securing the €130-billion rescue package for international lenders.
Gold also rallied as China recently cut its required reserve ratio for its lenders to boost economic growth.
Financial Trading News
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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 Trading Review' edited by ETX Capital, updated 22-Feb-12
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