UK markets closed sharply higher yesterday, as data showed that Chinese manufacturing sector expanded in October and amid hopes that European policy makers would be able to stave-off the region’s debt crisis.
Among mining stocks, Kazakhmys surged 8.0%, and emerged as the top gainer on the index, while, Rio Tinto, Antofagasta and Lonmin rose between 7.1% and 7.7%, as China’s manufacturing expanded moderately in October.
Among bankers, Lloyds Banking Group rose 5.3%, and led the banking stocks higher, amid expectations of an imminent solution to the Eurozone debt crisis. Lloyds also advanced following news that it still considered flotation of 630 bank branches which it had planned to dispose off.
InterContinental Hotel advanced 0.8%, after the company stated that its same-store revenue per available room in the US had risen 8.0% in the third quarter.
FTSE 100 rose 1.1% to 5,548.1, while FTSE 250 jumped 2.0% to settle at 10,469.1.
European Trading Review
European markets ended higher yesterday, as better-than-expected rise in Japan’s exports in September coupled with a rebound in new orders and manufacturing output in China buoyed market sentiments. Moreover, reports that Eurozone leaders were making progress towards agreeing to resolve the regions debt crisis, added to the optimism.
Car interiors, Faurecia, soared 12.3% after the company reported a rise in its third-quarter sales.
Navigation-system maker, TOMTOM, surged 18.6%, after the company reported a rise in third-quarter profit.
Dental-implant maker, Nobel Biocare Holding, rallied 14.4%, following report that private-equity firms might acquire the company.
Nokia climbed 3.8%, after Deutsche Bank raised its price target on the stock.
Gains for European indices were restricted by losses in banking sector stocks.
FTSEurofirst 300 index added 1.1% to 989.0. German DAX Xetra 30 rose 1.4% to 6,055.3. French CAC-40 edged up 1.5% to 3,220.5.
US Trading Review
US markets extended their gains for the third consecutive day, following a slew of merger deals and amid optimism that European leaders would reach a deal to contain the region’s debt crisis.
Caterpillar, the top gainer on the DJIA index, surged 5.0%, after its third-quarter earnings surpassed market expectations.
Alcoa added 3.4%, as metal prices gained on upbeat economic data in China and Japan.
FedEx gained 2.8%, as it forecasted a 12.0% increase in holiday shipments.
HealthSpring surged 33.7%, after health insurer Cigna agreed to acquire the company.
Clean energy stocks, First Solar and SunPower, rose 7.8% and 13.6%, respectively, after Chinese solar panel manufacturer, Yingli Green Energy, reported a surge in demand from Germany and Italy.
Biopharmaceutical company, Adolor, the top gainer on the NASDAQ index, soared 143.2%, after Cubist Pharmaceuticals agreed to acquire the company.
DJIA added 0.9% to close at 11,913.6. NASDAQ surged 2.4% to settle at 2,699.4. S&P 500 climbed 1.3% to end at 1,254.2.
Forex Trading Review
At 0400 BST today, the GBP is trading marginally lower against the USD at $1.5994, marginally higher against the EUR at €1.1498, and 0.2% lower against the JPY at ¥121.68.
The EUR is trading 0.1% lower against the USD at $1.3912.
The EUR is trading 0.3% lower against the JPY at ¥105.83.
The EUR traded lower against the USD and the JPY, amid speculation that consumer confidence in Germany and France might have deteriorated, decreasing demand for the currency.
The GBP is trading lower against the USD and the JPY, amid concerns that European leaders would build a comprehensive solution to the region’s debt crisis, reducing demand for the currency.
The NZD is trading lower against its major peers, after a report showed that inflation in the country slowed more-than-expected. This increased speculation that the Reserve Bank of New Zealand would keep its benchmark interest rate at record low for a longer duration.
Yesterday, the USD closed lower against the EUR, following a report that German opposition leaders agreed to increase the strength of the European Financial Stability Facility to more than €1.0 trillion.
The CAD closed higher against the USD, as the European leaders’ meeting outlined plans to assist lenders, and after China’s manufacturing rose in October for the first time in four months, increasing demand for riskier assets.
Commodities Trading Review
In Asia, crude oil for December delivery is trading 0.7% or $0.63 higher at $91.90 per barrel.
Yesterday, crude oil for December delivery rallied 4.4% or $3.87 to settle at $91.27 per barrel. This came amid hopes that European leaders would resolve the region’s debt crisis, and after various economic releases showed signs of stronger growth in China and Japan.
Crude oil prices paced gains after a Chinese government report showed that crude oil demand in the country rose 3.1% in September.
Gold for immediate delivery is trading 0.3% higher today, at $1,655.99 per ounce.
Gold for December delivery rose 1.0% or $16.20 to end at $1,652.30 per ounce yesterday. This came as the dollar weakened against the euro, increasing the demand for the precious metal as a hedge against inflation.
Gold prices rose after preliminary data showed an increase in manufacturing activity in China for October.
Financial Trading News
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'Gold Spreads Trade Higher as US Dollar Struggles Against Euro' edited by ETX Capital, updated 25-Oct-11
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