Sep 10
2
Upbeat manufacturing data from US and China
International Market Report 2nd September 2010
FTSEurofirst 300 index gained 2.9% to close at 1,055.7. The German DAX Xetra 30 rose 2.7% to 6,083.9. French CAC-40 edged up 3.8% to settle at 3,623.8. DJIA jumped 2.5% to close at 10,269.5. The Nasdaq climbed 3.0% to 2,176.8. The S&P 500 index closed 3.0% higher, at 1,080.3. Nikkei 225 index is trading 1.2% higher, at 9,035.7. Hang Seng index is up 1.2%, at 20,875.9, whilst on the other hand the Kospi index is trading 0.3% higher, at 1,769.2. All Ords is up 36.2 or 0.8% at 4563.
A powerful finish to the financial year has put rate rises back on to the Reserve Bank’s agenda as consumers spend on cars and holidays. The economy grew by 1.2 per cent in the June quarter, the best result in three years, and has now averaged an annual growth rate of 4 per cent since the last three months of 2009. The treasury’s costing of the Coalition’s election promises have found a $7 billion hole in the opposition’s claim that its election promises and proposals would save $11.5bn over the next four years. Treasury added that if some of the assumptions that the Coalition had used to come up with the figure did not hold up, the net benefit of its policies could be as low as $500 million.
Yesterday, other European markets finished sharply higher as concerns of a slowdown in the global economy were eased by upbeat corporate results and better-than-forecasted economic data from US and China. Banks, Societe Generale and BNP Paribas, rose 5.7% and 5.9%, respectively. Vivendi, is up 5.0%, which led telecom and entertainment stocks higher, as the company raised its full-year targets after its first-half profit rose 4% to €1.53 billion. Henkel, Metro and Daimler paced gains, were benefiting from broker upgrades. Virbac and Vinci both climbed 4.3% and 4.8% respectively, after posting strong first-half results. Yesterday, US markets rallied, as buoyant manufacturing data from US and China eased fears of a double dip recession. Industrial stocks, Boeing, General Electric and Caterpillar, increased between 1.9% and 4.6%, after US manufacturing index surprisingly rose to 56.3 in August from 55.5 in July. As the base metal prices rose metal stocks, Alcoa and Freeport-McMoRan Copper & Gold, added 3.0% and 5.8% respectively. Energy stocks, Exxon Mobil and Chevron, rose 3.1% and 3.6% respectively, as the crude oil prices increased. Banks, JPMorgan, Citigroup and Bank of America, climbed between 3.8% and 6.1%, as the risk appetite gained among investors. Apple edged up 3.0%, after introducing a new version of Apple TV and a new line of iPods. Asian markets are trading higher this morning, taking cues from a strong overnight rally on the Wall Street, after a higher-than-expected expansion from the US and Chinese manufacturing activity in August. In Japan, exporters, Sony, Nissan Motor and Canon rose, as the yen weakened against the euro. Mitsui & Co. Trading price rose, as base metal prices advanced. Showa Shell Sekiyu gained, after Citigroup raised the ratings on the stock. In Hong Kong, Cnooc rose, as the crude oil prices increased. Bank of Communications advanced, tracking the gains in its US peers. Ping An Insurance rose, after stating that it would merge its bank unit into Shenzhen Development Bank. In South Korea, technology stocks, LG Display and Hynix Semiconductor paced increase, reversing their recent declines. After bagging a $1.46 billion desalinisation plant construction order, Doosan Heavy rose. The Nikkei 225 index was trading 1.2% higher, at 9,035.7.
Due for release today is the AUD Trade Balance, GBP Nationwide HPI m/m, CHF Retail Sales y/y, EUR Minimum Bid Rate, EUR ECB Press Conference, USD Unemployment Claims, USD Fed Chairman Bernanke Testifies and USD Pending Home Sales.
