UK markets closed lower yesterday, as investors awaited Greece’s accord on spending cuts to secure additional funding and after China stated that its industrial-output growth might slow down.
Xstrata and Glencore dropped 4.9% and 3.8%, respectively, after the former stated that it had reached a deal with the later for an all-share merger.
ENRC, Antofagasta and Rio Tinto fell between 1.9% and 2.6%, following cautious comments from China.
Retailers, Burberry Group and Next declined 1.8% and 0.5%, respectively, after the British Retail Consortium stated that UK retail sales slowed in January as a weak economic outlook prompted consumers to cut spending.
GlaxoSmithKline slipped 1.0%, after it reported lower-than-expected sales for the fourth-quarter.
Barclays, HSBC Holdings and Royal Bank of Scotland ended higher between 0.3% and 2.3%.
FTSE 100 index closed marginally lower at 5,890.3, while FTSE 250 index slipped 0.4% to close at 11,193.70.
European Trading Review
European markets closed mostly lower yesterday, amid lingering concern about Greece’s ability to meet the criteria for the second bailout package from international creditors. Moreover, cautious comments from China about country’s industrial-output growth weighed on market sentiment.
Carmakers, Daimler, BMW and Volkswagen dropped between 1.4% and 2.0%, after reports showed that German industrial output unexpectedly fell by a seasonally adjusted 2.9% in December.
Swatch declined 4.0%, after the company’s full-year earnings fell short of market expectations.
Lagardere sank 5.7%, after the company reported that it would record losses of about €900 million.
Drug maker, Novo Nordisk, gained 2.2%, after Goldman Sachs advised a “Buy” rating on the stock.
FTSEurofirst 300 index declined 0.2% to 1,072.8. German DAX Xetra 30 eased 0.2% to end at 6,754.2. French CAC-40 added 0.2% to 3,411.5.
US Trading Review
US markets ended higher yesterday, amid reports that Greece had made progress in its efforts to secure the bailout package and that the Federal Reserve would keep interest rates low.
Coca-Cola rose 0.8%, after the company reported fourth-quarter earnings that exceeded market expectations.
Yum! Brands gained 2.6%, after the company reported a 30% rise in its earnings.
McDonald’s added 1.4%, amid optimism that the company would report higher global sales, ahead of its report.
Anadarko Petroleum increased 5.2%, after the company posted higher-than-expected fourth-quarter profit.
Coinstar surged 13.8%, after it reported fourth-quarter results that were much above market expectations.
BioMimetic Therapeutics gained 9.3%, after the company reported positive data from the clinical trial of its treatment for rotator-cuff tears.
DJIA gained 0.3% to end at 12,878.2. NASDAQ rose 0.1%, to close at 2,904.1. S&P 500 rose 0.2% to end at 1,347.1.
Forex Trading Review
At 0400 BST today, the GBP is trading marginally higher against the USD at $1.5892, marginally higher against the EUR at €1.1999, and 0.4% higher against the JPY at ¥122.44. The Bank of England’s Monetary Policy Committee (MPC) is expected to announce £50 billion of quantitative easing this week.
The EUR is trading marginally lower against the USD at $1.3243.
The EUR is trading 0.3% higher against the JPY at ¥102.03, ahead of the Greek Prime Minister, Lucas Papademos’ meeting with the heads of three political parties, amid optimism that the draft required to obtain the additional bailout would get finalised.
Yesterday, the EUR and CAD ended higher against the USD, as demand for riskier assets increased on hopes that Greek party leaders would reach an agreement, including sharp spending and wage cuts, to fulfil demands of International lenders to secure a second bailout.
The AUD closed higher against all of its major peers, after the Australian central bank policy makers unexpectedly kept interest rates unchanged.
The NZD ended higher against the JPY, amid optimism that Greece’s government and international creditors would work on the final draft of a plan, on budget and structural measures needed for Greece to obtain additional funding.
The EUR closed higher against the CHF, after Swiss National Bank’s acting Chairman, Thomas Jordan, restated that the Swiss central bank is prepared to defend its cap on the value of the CHF.
Commodities Trading Review
In Asia, crude oil for March delivery is trading 0.5% or 49 cents higher at $98.90 per barrel.
Yesterday, crude oil for March delivery added 1.6% or $1.50 to settle at $98.41 per barrel. This came as optimism that Greece would reach an agreement with country’s allied party leaders to secure the second bailout package from the international lenders, pushed the dollar lower. Crude oil also rose amid concerns over civil unrest in Iran and Nigeria.
Gold for immediate delivery is trading 0.1% higher today, at $1,746.61 per ounce.
Gold for April delivery advanced 1.4% or $23.50 to settle at $1,748.40 per ounce yesterday. This came as the dollar weakened against the major currencies, increasing the demand for the precious metal as a hedge against inflation.
Financial Trading News
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'UK Stock Markets Weaken as Investors Await Greek Cuts Agreement' edited by ETX Capital, updated 08-Feb-12
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