UK markets plunged to close lower yesterday, amid investor concern over Greece’s ability to avert a default.
Royal Bank of Scotland, Lloyds Banking Group and Barclays retreated between 4.2% and 7.6%, as their European peer, Deutsche Bank, trimmed its earnings forecast.
Investment manager, Hargreaves Lansdowne tumbled 7.9%, and emerged as top laggard on the FTSE 100 index, on negative comments from a broker and amid fears of “suppressed” demand for its investment products.
Man Group and Schroders shed 1.1% and 4.3%, respectively.
Insurers, Aviva and Prudential lost 4.6% and 6.2%, respectively, amid concerns over worsening of their portfolios.
Miners, Anglo American and Lonmin, shed 3.4% and 5.3%, respectively, as Credit Suisse downgraded the former to “Neutral” from “Outperformer” and the latter to “Underperform” from “Neutral”.
Fresnillo plunged 6.6%, following a sharp decline in silver prices.
FTSE 100 slumped 2.6% to close at 4,944.4, while FTSE 250 lost 3.3% to settle at 9,425.9.
European Trading Review
European markets closed sharply lower yesterday, led by heavy losses in banking sector stocks. This came amid fears of more write-downs by banks and after policy makers highlighted that they might renegotiate terms of Greek bailout package, deepening concern that the sovereign debt crisis would hurt the economic recovery.
Deutsche Bank, fell 4.3%, after the company trimmed its full-year earnings estimates and announced more job cuts.
Dexia tumbled 23.0%, after its board asked the company to fix its “structural problems”.
Airlines related stocks, Lufthansa, Air France and EADS, slumped between 4.3% and 9.1. This came after CFO of the International Air Transport Association, Tony Tyler, stated that profit margins of airlines might shrink further if economic growth slows to less than 2.4%.
FTSEurofirst 300 index dropped 2.7% to 887.8. German DAX Xetra 30 eased 3.0% to end at 5,216.7. French CAC-40 edged down 2.6% to 2,850.6.
US Trading Review
US markets rebounded in the final hour of trading yesterday, to close higher, amid reports that the European ministers are collaborating to recapitalize banks in the region, in an effort to keep contagion risk at bay.
Morgan Stanley, the top gainer on the S&P 500 index, soared 12.4%, while Citigroup and JPMorgan Chase rallied 5.5% and 6.6%, respectively, amid easing worries over the European debt crisis.
Technology stocks, Intel, Taiwan Semi and Nvidia climbed between 2.9% and 9.2%, following a report that showed better-than-expected semiconductor sales in August.
Yahoo climbed 6.9%, after private equity firm, Silver Lake, and Russia’s Digital Sky Technologies joined Alibaba Group for a possible joint bid for Yahoo.
AMR rebounded sharply, leaping 20.7%, after it resumed contract negotiations with pilots.
DJIA advanced 1.4% to close at 10,808.7. NASDAQ surged 3.0% to settle at 2,404.8. S&P 500 rose 2.3% or 24.7 points to end at 1,124.0.
Forex Trading Review
At 0400 BST today, the GBP is trading 0.2% lower against the USD at $1.5435, marginally higher against the EUR at €1.1614, and 0.4% lower against the JPY at ¥118.33.
The EUR is trading 0.2% lower against the USD at $1.3290 and 0.4% lower against the JPY at ¥101.89.
The EUR is trading lower against the USD and the JPY, amid speculation that mounting debt concerns and signs of economic slowdown would force the ECB to announce additional stimulus measures at its meeting tomorrow. The EUR also lost value, amid speculation that a report today would show a decline in the region’s retail sales in August
The JPY is trading higher against the USD, as persisting concerns about the global economy forced investors to invest in safe haven assets.
Yesterday, the USD closed lower against the EUR, as the US Federal Reserve Chairman stated that the central bank might implement a third round of quantitative easing if the European crisis deepens. This came as European policy makers suggested at new ways to recapitalize banks and resolve the region’s debt crisis.
The GBP closed lower against the EUR as investors speculated that the Bank of England would this week announce further monetary stimulus to shore up the economy.
The AUD closed lower against the USD, amid speculation that the Reserve Bank of Australia might cut interest-rates further to ease inflationary pressures.
Commodities Trading Review
In Asia, crude oil for November delivery is trading 2.9% or $1.11 higher at $77.83 per barrel.
Yesterday, crude oil for November delivery declined 2.5% or $1.94 to settle at $75.67 per barrel. This came amid worries over demand prospects, after Goldman Sachs forecasted that the Eurozone would slip into a “mild recession” in the fourth-quarter of 2011 and first-quarter of 2012.
S&P’s Credit Ratings Services stated that there was a 40% chance of a new recession in Western Europe next year.
Crude oil lost value, amid speculation that the US Energy Department’s weekly report would show a rise in crude oil inventories.
Gold for immediate delivery is trading marginally higher today, at $1,630.36 per ounce.
Gold for December delivery lost 2.5% or $41.70 to settle at $1,616 per ounce yesterday, as investors took advantage of recent impressive gains and preferred to book profits.
The gold spread betting market paced declines, after reports indicated that European Finance Ministers were planning to coordinate recapitalizations of financial institutions in the region.
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.
ETX Capital >>
"With ETX Capital you get all the normal advantages of Spread Betting plus..." >> read
ETX Capital review.
Risk Warning: As a small percentage of the total contract value is required as deposit, your profit or loss can rapidly exceed that deposit. Seek advice if you don't fully understand the risks. Spread bets and CFDs carry high risk and are not suitable for everyone.
Article provided / approved by ETX Capital which is the trading name of Monecor (London) Limited, company number 00851820. Monecor (London) Ltd is authorised and regulated by the Financial Services Authority, registration number 124721.
'Gold Spread Betting Markets Decline on Plans to Recapitalise European Banks' edited by ETX Capital, updated 05-Oct-11
Related Articles:
Financial Trading Review, updated 22-May-12
The daily trading review of the key UK, European and US markets as well as a quick review of the forex and commodities markets. In the last trading session we saw...read article: Financial Trading Review.
Financial Markets Trading Review, updated 21-May-12
Financial Markets Trading Review - the regular trading review of the main UK, US and European markets. There's also a quick look at the commodities and forex markets as well as...read article: Financial Markets Trading Review.
Financial Trading Review Index - an index of financial trading reviews, with each review covering the forex and commodities markets as well as the main UK, US and European markets.
Q) Average Trading Results?
A) Get free trading tips, offers, price updates, important news and more! All Free - Click here!
Risk Warning:
Please note that spread betting and CFD trading carry a high level of risk to your capital. You can lose more than your initial deposit. These products may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.
* Tax law is subject to change or may differ if you pay tax in a jurisdiction other than the UK.
