UK Spread Betting Markets Fall on Heavily Discounted UniCredit Rights Issue
The regular trading review of the main UK, US and European markets, plus a quick look at the commodities and forex markets.
For today's report see Financial Trading Review.
Financial Trading Review - 05 January 2012
UK Trading Review
UK markets slipped yesterday, amid renewed concerns about the Eurozone debt crisis, as Italian lender UniCredit offered an unexpectedly large discount for its rights issue to raise new capital. In addition, Greece noted that it has only three months to make changes needed to avoid a default.
Retailer, Next dropped 3.1%, after it reported “disappointing” trading figures for November and December.
Peers, Tesco, Burberry and Marks & Spencer lost between 1.4% and 2.6%.
Among miners, Glencore International, the top loser on the FTSE 100 index, declined 3.1%, while Anglo American, Vedanta Resources and Antofagasta retreated between 1.0% and 2.8%, as base metal prices lost ground.
BAE Systems declined 2.8%, after it stated that renegotiation of its Typhoon jet contract with Saudi Arabia might get delayed, impacting its 2011 earnings.
FTSE 100 declined 0.6% to close at 5,668.5, while FTSE 250 lost 0.9% to end at 10,273.8.
European Trading Review
European markets closed lower yesterday, led by losses in banking sector stocks, as investors remained concerned about the European sovereign debt crisis, shrugging off report that showed Eurozone services and manufacturing output contracted less-than-expected in December.
Banking stocks, UniCredit, Banco Comercial Portugues and Commerzbank tumbled between 5.0% and 14.0%, after UniCredit heavily discounted its rights offer to raise capital, increasing concerns about recapitalization among banks.
Wind-turbine maker, Vestas, sank 19.0%, after the company trimmed its earnings forecasts and signalled a significant change to its corporate structure.
Utility stock, Electricite de France, plummeted 5.1%, after it estimated that implementing additional safety standards at its French reactors would cost the company about €10 billion.
FTSEurofirst 300 index declined 0.6% to 1,021.5. German DAX Xetra 30 fell 0.9% to end at 6,111.6. French CAC-40 dropped 1.6% to 3,193.7.
US Trading Review
US markets closed mostly higher yesterday, as encouraging results from auto makers and retailers offset report indicating a drop in business spending.
General Motors and Ford added 0.5% and 1.5%, respectively, after both the companies reported a jump in their December automobile sales.
Netflix, the top gainer on the S&P 500 index, jumped 11.4%, after it reported online viewing that surpassed an analyst’s estimate.
Among retailers, Home Depot, Gap, and Ralph Lauren advanced between 1.4% and 4.2%, as International Council of Shopping Centres raised its December sales forecast to 4.5%.
Cabot Oil & Gas gained 7.2%, after it raised its dividend by 33%.
Trident Microsystems, the top decliner on NASDAQ composite index, nosedived 68.5%, as it filed for bankruptcy protection.
DJIA edged up 0.2% to close at 12,418.4. NASDAQ slid marginally to settle at 2,648.4. S&P 500 gained marginally to settle at 1,277.3.
Forex Trading Review
At 0400 BST today, the GBP is trading marginally lower against the USD at $1.5608, marginally higher against the EUR at €1.2072, and marginally lower against the JPY at ¥119.76.
The EUR is trading marginally lower against the USD at $1.2929, on concern that European sovereign borrowers and banks would struggle to raise funds, ahead of the French bond auction today.
The EUR is trading flat against the JPY at ¥99.21.
The AUD is trading lower against most of its major peers, after a report showed the Australian trade surplus unexpectedly narrowed in November and after a survey showed that Australia’s services industry shrank in December for a third straight month.
The WON slipped against the USD, amid concerns that Europe’s debt crisis would worsen outweighing upbeat US economic reports.
Yesterday, the EUR and CAD closed lower against the USD, as concern that European sovereign debt crisis would worsen, dampened demand for high-yielding assets.
The GBP closed higher against the EUR and CHF, after the Bank of England data showed that foreign investors increased their gilt holdings by £16.3 billion in November, the biggest monthly rise since September 2008.
Commodities Trading Review
In Asia, crude oil for February delivery is trading 0.2% or 17 cents lower at $103.05 per barrel.
Yesterday, crude oil for February delivery rose 0.3% or 26 cents to settle at $103.22 per barrel. This came after the American Petroleum Institute reported that crude-oil inventories declined by 4.4 million barrels last week and after the EU governments reached a deal in principle to ban imports from Iran.
Gold for immediate delivery is trading 0.3% higher today, at $1,616.22 per ounce.
Gold for February delivery added 0.8% or $12.20 to end at $1,612.70 per ounce yesterday. This came amid concerns that the EU government might announce harsher sanctions on Iran’s energy and banking industries, and as lingering concerns about the European debt crisis spurred purchase of the precious metal as a safe haven asset.
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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'UK Spread Betting Markets Fall on Heavily Discounted UniCredit Rights Issue' edited by ETX Capital, updated 05-Jan-12
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