UK markets closed lower yesterday, with the FTSE 100 index declining for the third consecutive session, as miners and oil producers recorded losses.
Miners, Kazakhmys, Xstrata and Vedanta Resources, dropped between 0.9% and 4.4%, in line with a fall in base metal prices.
Oil producers, Essar Energy, Petrofac and Royal Dutch Shell, lost between 0.1% and 4.1%, as crude oil prices fell.
Shire declined 3.3%, after JPMorgan Chase downgraded the stock to “Neutral” from “Overweight”.
Hargreaves Lansdown tumbled 12.7%, as investors speculated that new regulations by the Financial Services Authority would weigh on its business.
Adding to negative sentiments, jitters about the pace of the global economic recovery persisted, after a report showed that US consumer spending fell unexpectedly in June.
FTSE 100 dropped 1.0% or 56.0 points to 5,718.4. FTSE 250 fell 2.2% or 254.4 points to 11,188.6.
European Trading Review
European markets closed lower yesterday, amid worries that a slowdown in US economy would impede global economic recovery.
Investors remain concerned over recurring Eurozone sovereign debt issues and dismal corporate earnings reports.
Retailer, Metro, plunged 7.5%, after the company reported a 9% drop in its second-quarter net profit.
Steelmakers, ThyssenKrupp and Salzgitter, declined 5.2% and 6.3%, respectively, tracking a decline in base metal prices.
Chemical stock, Wacker Chemie, dropped 10.5%, after reporting second quarter profit that missed market expectations.
Danish jewellery maker, Pandora, plunged 65.4%, as it cut its full-year outlook and after its Chief Executive resigned.
Automakers were lower, following a sell-off with Fiat, Peugeot and Volkswagen declining between 4.1% and 8.4%.
FTSEurofirst 300 index declined 1.8% to 1,048.7. German DAX Xetra 30 slipped 2.3% or 157.2 points to 6,796.8. French CAC-40 fell 1.8% or 65.3 points to 3,522.8.
US Trading Review
US markets dipped sharply yesterday, with the DJIA slipping for the eighth straight session, as dismal economic data weighed on investor sentiment.
Industrial stocks, Deere, GE and Ingersoll Rand, retreated between 2.4% and 5.5% amid concerns over sluggish economy, after US consumer spending unexpectedly dropped in June.
Wal-Mart shed 1.8%, as Jefferies downgraded its rating on the stock to “Hold” from “Buy”.
Food processing group, Archer Daniels Midland plunged 6.2%, after it reported a drop of 15% in its quarterly profit due to a surge in taxes.
Manufacturers, Emerson Electric and Parker Hannifin, slipped 4.1% and 8.5%, respectively, after they lowered their outlook.
MetroPCS sank 36.6%, after it reported weaker-than-expected second quarter earnings. DJIA edged down 2.2% to 11,866.6. NASDAQ slipped 2.8% to 2,669.2. S&P 500 shed 2.6% to 1,254.1.
Forex Trading Review
At 0400 BST today, the GBP is trading marginally lower against the USD at $1.6272, 0.1% lower against the EUR at €1.1464 and 0.1% lower against the JPY at ¥125.68.
The EUR is trading 0.1% higher against the USD at $1.4190.
The EUR is trading slightly lower against the JPY at ¥109.61, as most Asian equity markets traded lower, decreasing the demand for high yielding assets.
The AUD is trading lower against the USD, after a report showed that Australia’s retail sales dropped 0.1% in June from a month earlier.
Yesterday, the USD ended higher against EUR, after the US House of Representatives approved legislation to increase the US debt limit by $2.1 trillion and cut federal spending by $2.4 trillion.
The USD ended lower against JPY and Swiss franc, after a report showed that consumer spending in the US fell 0.2% in June for the first time in almost two years.
The AUD ended lower against the USD, after the Reserve Bank of Australia kept Australia’s key cash interest rate on hold at 4.75%.
Commodities Trading Review
In Asia, crude oil for September delivery is trading 40 cents lower at $93.39 per barrel.
Yesterday, crude oil for September delivery closed 1.2% or $1.10 lower at $93.79 per barrel, amid worries over future oil demand, as disappointing US consumer spending data renewed concerns about the pace of the economic recovery.
Gold for immediate delivery is trading marginally higher today, at $1,654.69 per ounce.
Gold prices for December delivery surged 1.4% or $22.80 to $1,644.50 per ounce yesterday, as investors’ mounting worries over the pace of the economic recovery spurred investment in the precious metal as a safe haven asset. Also, a renewal in Eurozone debt worries helped the rise in gold prices.
Financial Trading News
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'Gold Prices Surge on Mounting Worries Over Global Economic Recovery' edited by ETX Capital, updated 03-Aug-11
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