Australian and Asian Report 6th May 2011

Asian markets are trading lower this morning, following lower commodity prices. In Japan, exporters, Toyota Motor and Canon traded lower, as the yen strengthened against the dollar. Shares of Honda Motor came under selling pressure, after the National Business Daily reported that the company suspended its production at a parts unit in China following disruption in supplies due to earthquake. In Hong Kong, oil producers, Cnooc and PetroChina, lost values, as oil prices tumbled yesterday. In South Korea, Samsung Electronics traded lower, on fears that demand from the US would recede, after the nation’s initial jobless claims unexpectedly climbed. Nikkei 225 index is trading 1.6% lower, at 9,842.0. Hang Seng index is down 0.6%, at 23,123.1, while the Kospi index is trading 1.9% lower, at 2,138.6.

US markets closed lower yesterday, after the number of initial jobless claims unexpectedly surged to 474,000, the highest level in last eight months. Energy-sector stocks, Exxon Mobil and Chevron, were down 2.6% and 2.0%, respectively, as crude oil price plunged below $100 per barrel on the New York Mercantile Exchange for the first time since mid-March. Among material stocks, Freeport-McMoRan Copper & Gold and Alcoa lost 2.5% and 2.6%, respectively, in line with a decline in metal prices. General Motors slumped 3.1%, after it reported a decline in its Chinese auto sales. Financial stocks, Bank of America, American Express and J.P. Morgan, declined between 0.4% and 1.5%, on concerns about economic recovery, after initial jobless claims jumped to their highest level since August 2010.
DJIA edged down 1.1% or 139.4 points to settle at 12,584.2. NASDAQ slid 0.5% or 13.5 points to close at 2,814.7. S&P 500 slipped 0.9% or 12.2 points to 1,335.1.

Other European markets finished mostly lower yesterday, as the financial sector came under selling pressure. Banks, Societe Generale and Banco Bilbao Vizcaya Argentaria, paced declines, after the former’s net profit fell 14% in the first quarter to €916 million, and the latter’s net profit dropped 7.3% in the first three months of the year. Other banks such as Commerzbank and Deutsche Bank also lost values, as its peer, Lloyds Banking, took an impairment charge. BMW fell 1.6%, as CA Cheuvreux downgraded the stock to “Underperform.” Adding to the negative sentiment, German factory orders unexpectedly slipped 4% in March, while US initial jobless claims jumped by 43,000 to 474,000 for the week ended 30 April. FTSEurofirst 300 index declined 0.3% to close at 1,131.4. German DAX Xetra 30 rose marginally to 7,377.0. French CAC-40 edged down 1.0% or 38.3 points to settle at 4,004.9.