UK markets closed higher yesterday, led by a rise in mining and financial sector stocks, after Greek policymakers agreed on the final draft of austerity measures to secure a second international financial rescue package to resolve the country’s debt crisis.
Miners, Rio Tinto, BHP Billiton and Anglo American, rose between 1.2% and 2.6%, tracking higher base metal prices.
Insurers, Aviva and Old Mutual, gained 1.9% and 2.1%, respectively, in line with a rise in the equity market.
Banking stock, Lloyds Banking Group rose 2.3%, after RBC initiated coverage on the stock with an “Outperform” rating.
Cable & Wireless Worldwide surged 44.5%, after Vodafone Group stated that it might bid for the company, while Vodafone added 1.0%.
Retailers, Burberry Group, Tesco and Marks & Spencer lost between 0.4% and 1.1%.
FTSE 100 added 0.9%, to close at 5,905.7, while FTSE 250 edged up1.0%, to settle at 11,275.6.
European Trading Review
European markets ended higher yesterday, amid optimism that European finance ministers would approve the additional bailout package for Greece at their meeting this week in Brussels, after the debt-laden country ratified an austerity plan.
Financial sector stocks, UBS, National Bank of Greece and Commerzbank, surged between 1.6% and 9.0%, as risk aversion decreased among investors.
Volkswagen climbed 2.1%, after Morgan Stanley reiterated its “Overweight” rating on the stock.
Homebuilder, Bilfinger Berger, rose 1.9%, after the company’s full-year earnings surpassed market expectations.
Reinsurer, Hannover, added 1.2%, after the company stated that its earnings for 2011 would “comfortably surpass” its profit target.
FTSEurofirst 300 index added 0.7% to close at 1,071.6. German DAX Xetra 30 rose 0.7% at 6,738.5. French CAC-40 advanced 0.3% to end at 3,384.6.
US Trading Review
US markets closed in the positive territory yesterday, led by gains in banking sector stocks, after Greece approved austerity measures needed to secure international bailout funds to stem its debt crisis.
Banking stocks, JP Morgan and Bank of America gained 1.8% and 2.2%, respectively, as risk appetite increased among investors.
Apple rose 1.9% after the company stated that a non-profit labour group had started inspecting working conditions at the factories of its suppliers.
Technology stock, Advanced Micro Devices, climbed 3.4%, after Sanford C. Bernstein upgraded the stock to “Outperform” from “Market perform”.
Regeneron Pharmaceuticals soared 12.0%, after the company’s forecast for sales of its eye drug, Eylea, surpassed market expectations.
Chesapeake Energy gained 2.4%, after the company stated that it would sell off assets and issue debt to cover its expenditures this year.
DJIA edged up 0.6%, to settle at 12,874.0. NASDAQ added 0.9%, to end at 2,931.4. S&P 500 gained 0.7%, to settle at 1,351.8.
Forex Trading Review
At 0400 BST today, the GBP is trading 0.1% lower against the USD at $1.5712, 0.1% lower against the EUR at €1.1937, and 0.4% higher against the JPY at ¥122.39.
The EUR is trading 0.1% higher against the USD at $1.3162.
The EUR is trading 0.6% higher against the JPY at ¥102.55.
The EUR is trading higher against most of its major peers, ahead of the European finance ministers meeting this week to discuss an aid package for Greece, following approval of austerity measures by the country, and ahead of a bond auction by Italy and Spain.
The GBP is trading lower against the USD and the EUR, after Moody's ratings agency lowered its outlook on the UK to “Negative”.
The JPY is trading lower against the USD and the EUR, after the Bank of Japan announced that it had expanded its asset-purchase fund to ensure a recovery in the country.
Yesterday, the USD closed higher against the EUR and the GBP, after Moody’s Investors Service cut the debt ratings of six European countries including Italy, Spain and Portugal, increasing the demand for safe haven currency.
Commodities Trading Review
In Asia, crude oil for March delivery is trading 0.3% or $0.31 lower at $100.60 per barrel.
Yesterday, crude oil for March delivery gained 2.3% or $2.24 to end at $100.91 per barrel. This came after the Greek government passed a final draft on austerity measures and on increasing concerns that Iranian crude supplies would be disrupted. Tensions intensified in the Middle East, after Israeli officials blamed Iran for two attacks on Israeli embassy personnel in India and Georgia.
Gold for immediate delivery is trading 0.1% lower today, at $1717.49 per ounce.
Gold for April delivery fell $4.90 to end at $1720.10 per ounce yesterday. This came as the dollar rose against the euro, decreasing the demand for the precious metal as a hedge against inflation. Markets also remained sceptical about Eurozone’s ability to contain the financial turmoil even after Greece approved the austerity measures.
Financial Trading News
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'UK Shares Trading: Cable & Wireless Worldwide Soar as Vodafone Mulls Takeover' edited by ETX Capital, updated 14-Feb-12
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