UK markets rebounded yesterday, closing higher, amid reports that collaborative actions by Germany and France would boost the euro area’s bailout fund.
British Sky Broadcasting Group, the top gainer on the FTSE 100 index, surged 5.4%, after its first quarter results surpassed market expectation.
Among banking stocks, Barclays, Royal Bank of Scotland and Lloyds Banking Group climbed between 2.5% and 3.4%, amid easing worries over the contagion risk.
Energy stocks, BP, Tullow Oil and Royal Dutch Shell rallied between 1.4% and 1.8%, as crude oil prices firmed up. Diageo surged 4.0%, after posting better-than-forecasted first-quarter sales.
Among mining stocks, ENRC rose 1.3%, amid speculation that it might be a takeover target for Glencore.
Wolseley climbed 4.6%, bolstered by an unexpected jump in US housing starts.
FTSE 100 climbed 0.7% to settle at 5,450.5, while FTSE 250 gained 0.5% to close at 10,231.8.
European Trading Review
European markets closed higher yesterday, as market sentiments buoyed after Britain’s Guardian newspaper reported that France and Germany have reached an agreement to boost the Eurozone’s rescue fund. This helped markets shrug off news about Spain’s credit rating downgrade by Moody’s Investors Service.
Banks, Commerzbank, Deutsche Bank and BNP Paribas gained between 4.2% and 6.2%, as concerns about Eurozone debt crisis eased.
Software AG surged 12.0% after the company reported a rise in its third-quarter earnings and confirmed its full-year sales and earnings forecast.
Hochtief rallied 3.7%, after Goldman Sachs upgraded the stock to “Conviction Buy” from “Neutral.”
Accor rose 2.5%, after it reported third-quarter sales, in line with market expectations.
FTSEurofirst 300 index rose 0.6% to 968.1. German DAX Xetra 30 rose 0.6% to 5,913.5. French CAC 40 gained 0.5% to close at 3,157.3.
US Trading Review
US markets declined yesterday, after the Fed Beige Book survey showed that the US economy was growing at a weak pace and following a deadlock over the European bailout talks.
Banking stock, Comerica, the top laggard on the S&P 500 index, plummeted 10.5%, after it reported higher third-quarter earnings but forecasted a drop in its net interest margin for the fourth-quarter.
BlackRock slid 4.7%, after reporting a 10.0% fall in its AUM during September. Caterpillar and DuPont lost 1.4% and 2.8%, respectively, amid concerns about the strength of the economy.
Apple slumped 5.6%, after its fourth-quarter earnings missed market expectations.
Goldman Sachs lost 1.4%, after a slew of brokers cut their price target on the stock.
Powerwave Technologies, the top laggard on the NASDAQ, plunged 41.8%, after its third-quarter earnings update missed market expectations.
DJIA lost 0.6% to 11,504.6. NASDAQ shed 2.0% to 2,604.0. S&P 500 lost 1.3% to 1,209.9.
Forex Trading Review
At 0400 BST today, the GBP is trading 0.2% lower against the USD at $1.5742, 0.1% higher against the EUR at €1.1468 and 0.3% lower against the JPY at ¥120.82.
The EUR / USD is trading 0.3% lower at $1.3727, amid concerns that European leaders would not reach a complete resolution to restrain Eurozone debt crisis at the October 23 summit.
The EUR is trading 0.4% lower against the JPY at ¥105.36, as most Asian equity markets traded lower, decreasing the demand for high yielding assets.
The AUD is trading lower against the USD, as ongoing worries over Eurozone debt crisis damped the demand for high yielding assets.
Yesterday, the EUR ended higher against the USD, after the Guardian newspaper reported late Tuesday, that France and Germany have agreed to boost the Eurozone financial rescue fund. However, gains were restricted, as worries increased among investors ahead of the Eurozone leaders meeting in Frankfurt.
Commodities Trading Review
In Asia, crude oil for November delivery is trading 50 cents lower at $85.61 per barrel.
Yesterday, crude oil for November delivery closed 2.5% or $2.23 lower at $86.11 per barrel. This came amid worries over demand prospects, after a disagreement emerged between France and Germany over Europe’s rescue strategy and the Federal Reserve Beige Book survey showed that US economy was growing at a “modest” pace.
Gold for immediate delivery is trading 1.1% lower today, at $1,623.58 per ounce.
Gold prices for December delivery fell 0.4% or $5.80 to $1,647 per ounce yesterday, as worried investors sold precious metal, amid lingering over the Eurozone debt crisis.
Financial Trading News
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'UK Stock Markets: Energy Shares Rally on Rising Crude Oil Price' edited by ETX Capital, updated 20-Oct-11
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