UK markets extended losses yesterday, led by mining and banking sector stocks, after data showed that China's economy in the third quarter, grew at the slowest pace since 2009.
Among mining stocks, Rio Tinto skidded 4.3%, and emerged as the top laggard on the FTSE 100 index, amid worries over faltering global growth.
Xstrata fell 1.3% after a mixed production update, while Randgold Resources retreated 1.8%, as gold prices lost ground.
Among banking stocks, Royal Bank of Scotland fell 1.4%, after Morgan Stanley downgraded the stock to “Underweight”.
Standard Chartered retreated 2.5%, after Singapore's investment company, Temasek Holdings, sold $513 million of exchangeable bonds.
Retailer, Burberry declined 1.4%, as investors fretted over slowdown in sales in its key Chinese market.
FTSE 100 dipped 0.5% to 5,410.4, while FTSE 250 slipped 0.7% to close at 10,178.9.
European Trading Review
European markets ended mostly lower yesterday, as Moody’s Investors Service warned that France’s triple-A credit-rating could be at risk and after data showed that China’s economic growth slowed down in the third quarter, increasing concerns about global growth.
Societe Generale, BNP Paribas and Credit Agricole declined between 3.3% and 5.0%, as risk aversion increased among investors.
Air France-KLM dropped 2.5%, after the airline announced late Monday that its CEO, Pierre-Henri Gourgeon, had resigned.
Utilities, RWE and EON, slid 0.9% and 1.0%, respectively, as German power prices declined to their lowest levels in seven months.
The German DAX Xetra 30 index closed higher, led by gains in automobile sector stocks.
BMW and Volkswagen gained 1.1% and 1.6%, respectively, after the European Automobile Manufacturers Association stated that these two companies had led gains in European car sales.
FTSEurofirst 300 index slipped 0.4% to 962.1. German DAX Xetra 30 rose 0.3% to 5,877.4. French CAC-40 closed 0.8% lower at 3,141.1.
US Trading Review
US markets advanced yesterday, after the Guardian reported that France and Germany had agreed to expand eurozone’s rescue fund. Moreover, upbeat corporate earnings report overshadowed concerns about France’s credit rating.
Bank of America, the top gainer on the DJIA index, surged 10.1%, after it reported a profit in its third-quarter.
Goldman Sachs rallied 5.5%, after it reported a quarterly loss but announced that it was moving to cut costs, including employee pay.
Homebuilders, Lennar, DR Horton and Pulte Group rose between 9.3% and 11.2%, after homebuilder sentiment climbed to its highest level in October.
Intel and Apple, edged up 0.5% each, amid optimism, ahead of their quarterly results.
Boeing rallied 2.7%, after Citigroup raised its price target on the stock.
DJIA climbed 1.6% or 180.1 points to close at 11,577.0. NASDAQ rallied 1.6% or 42.5 points to settle at 2,657.4. S&P 500 gained 2.0% or 24.5 points to end at 1,225.4.
Forex Trading Review
At 0400 BST today, the GBP is trading 0.2% higher against the USD at $1.5734, 0.1% down against the EUR at €1.1419 and 0.1% higher against the JPY at ¥120.68.
The EUR is trading 0.4% higher against the USD at $1.3781.
The EUR is trading 0.2% higher against the JPY at ¥105.69, as most Asian equity markets traded higher, increasing the demand for high yielding assets.
The WON is trading higher against the USD, amid speculation that a currency swap with Japan would be expanded.
The AUD/JPY advanced amid concern that Europe’s leaders would not be able to deliver a resolution to contain the region’s debt crisis.
Yesterday, the GBP ended lower against the USD and JPY, as a rise in UK inflation damped prospects that the Bank of England would temper its bond-buying program after it was revived this month.
The EUR ended lower against the USD, after Moody’s Investors Service cut Spain’s government bond ratings to “A1” from “Aa2”, reigniting concerns over Eurozone debt crisis.
The CAD ended higher against all major currencies, as US equity markets and crude oil traded higher, increasing the demand for high yielding assets.
Commodities Trading Review
In Asia, crude oil for November delivery is trading 26 cents lower at $88.08 per barrel.
Yesterday, crude oil for November delivery closed 2.3% or $1.96 higher at $88.34 per barrel, amid hopes that economic growth would stabilize, after US equity markets closed higher. However, crude oil prices fell earlier in the session, after a report showed that Chinese economy in the third quarter grew at the slowest pace since 2009.
Gold for immediate delivery is trading 0.3% higher today, at $1,662.4565 per ounce.
Gold prices for December delivery declined 1.4% or $23.80 to $1,652.80 per ounce yesterday, as the dollar appreciated against the major currencies, decreasing the demand for the precious metal as a hedge against inflation.
Financial Trading News
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'US Shares Spread Betting: Goldman Sachs Rises on Cost Cutting Talk' edited by ETX Capital, updated 19-Oct-11
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