Global Markets Overview - 30 November 2012

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By Christine Gaylican | November 30, 2012 1:20 PM EST

U.S. STOCK MARKETS

After statements from lawmakers sent stocks into a brief tailspin, stock trading settled down with benchmarks solidly in positive ground by mid-afternoon Thursday.

The Dow Jones Industrial Average rose 50 points, or 0.4%, to 13034. The Standard & Poor's 500-stock index rose seven points, or 0.5%, to 1417, while the Nasdaq Composite Index rose 20 points, or 0.7%, to 3012.

Major benchmarks were higher most of the morning, but markets reversed course as House Speaker John Boehner (R., Ohio) said in a news conference that there has been no substantive progress in talks between the White House and the House of Representatives toward a compromise on the so-called fiscal cliff.

Blue chips lost more than 50 points in five minutes as he spoke, before recovering and moving back into positive territory shortly after noon. At midday, the slide was halted by comments from other lawmakers. Senate Majority Leader Harry Reid said he thought Congress could finalize a deal this year, halting the slide, and Sen. Charles Schumer (D., N.Y.) said lawmakers are making progress on talks behind the scenes.

On the economic front, pending home sales rose 5.2% in October from the prior month, above the 1% increase expected. The number of Americans filing initial claims for unemployment benefits fell slightly more than expected last week, to 393,000.

Meanwhile, U.S. gross domestic product rose 2.7% in the third quarter, the Commerce Department said. The reading represented an upward revision from the 2% gain the department initially reported.

Economists projected the figure would be revised up to a 2.8% increase. On the corporate front, shares of Kohl's slid 10% after the company said same-store sales for November fell 5.6%, when a 1.9% rise had been expected. Research In Motion rallied 6.4% after Goldman Sachs analysts recommended buying the company's shares.

EUROPEAN STOCKS

European stocks climbed as investors showed greater tolerance for risk Thursday, after U.S. policy makers expressed optimism that they could reach a deal to avert the so-called fiscal cliff.

The Stoxx Europe 600 index rallied 1.2% to close at 276.31, the highest level since early June last year. European markets were buoyed by comments Wednesday from U.S. politicians that calmed nerves about the fiscal cliff.

On the data front Thursday, numbers for Germans without a job rose by 5,000 in November, well below an increase of 18,000 expected by analysts, according to FactSet. The jobless rate was 6.9%, as expected.

In London, shares of Invensys PLC jumped 8.9%. Late Wednesday, the software firm said it sold its rail-signaling unit to Germany's Siemens AG for 1.74 billion pounds ($2.78 billion).

Barclays raised its rating on Invensys to overweight from equal-weight following the announcement. Shares of Siemens gained 0.3% in Frankfurt. In the other direction, shares of Electricite de France SA lost 1% after a Paris court reportedly ruled that the electric-utility firm has overcharged households to the tune of EUR8.8 billion since 2009.

Banks were among the best performers in Europe, with shares of Spain's Banco Popular Espanol SA rallying 5% and Banco Santander SA up 2.4%. The IBEX 35 index jumped 1.7% to 7,973.70.

In Germany, shares of Commerzbank AG gained 2.6%, while Deutsche Bank AG added 1.6%. Shares of Volkswagen AG rose 1.3% to EUR165.80 after Morgan Stanley lifted its target price on the auto maker to EUR205 from EUR185 and reiterated its overweight recommendation.

The DAX 30 index rose 0.8% to 7,400.96. Among French stocks, shares of GDF Suez SA advanced 2.8%, after Credit Suisse raised its rating on the utility firm to neutral from underperform.

The CAC 40 index rose 1.5% to 3,568.88. And in the U.K., shares of Pennon Group PLC rallied 4.3%. The water- and waste-management firm reported a 3.4% increase in first-half pretax profit and lifted its dividend. Shares of Rio Tinto PLC jumped 5.1% as the company disclosed plans for more than $7 billion in spending cuts and savings. London's FTSE 100 index closed 1.2% higher at 5,870.30.

ASIA-PACIFIC STOCK MARKETS

Asian markets were higher Thursday as overnight remarks on U.S. budget talks boosted sentiment, while Shanghai slipped to a fresh multi-year low.

Once again the U.S. fiscal cliff captured the market's attention, as investors look for signs of an imminent resolution to the tax hikes and spending cuts that are scheduled to hit the U.S. at the beginning of 2013.

Japan's Nikkei Stock Average was 1% higher at 9400.88, with large exporters benefiting from the improved risk sentiment: Honda Motor and Canon were up 2% and 1.1%, respectively.

Power companies outperformed in Japan, as Shikoku Electric Power climbed 2% following a Nikkei report that the company will apply for a roughly 10% increase in household electricity rates as early as January. Kansai Electric Power also gained 2.7%.

In Hong Kong, the Hang Seng Index was 1% higher at 21922.89, while individual stocks on the broader market were bumped around by company news.

Block trades weighed down some stocks. Car maker Geely Automobile Holdings and Tianjin-based property developer Sunac China fell 1.1% and 2.1%, respectively, as a major investor in each company sold blocks of shares.

Electronics company Skyworth Digital Holdings sank 9.4%, coming down from a 52-week high reached Tuesday, after announcing a 23% increase in net profit for the first half.

The Shanghai Composite Index ended the day down 0.5% at a new multi-year low of 1963.49, with investors selling securities companies on expectations of weaker earnings that could result from the recent declines in the stock market: Citic Securities fell 4.4% and Haitong Securities lost 5.9%. South Korea's Kospi Composite Index was 1.2% higher at 1934.85.

COMMODITIES

Base metals on the London Metal Exchange closed sharply higher, with most metals at fresh seven-week highs, amid a bullish cocktail of positive data, improved wider markets and dollar weakness.

At the close of open-outcry trading, flagship base-metal copper was at a five-week high, up 1.7% on the day at $7,899.50 a metric ton. The metal breached sturdy technical resistance around $7,865/ton, analysts said.

Crude oil futures prices rose Thursday, erasing three days of losses, amid growing hopes that Congress and the Obama administration can reach agreement to avoid the so-called fiscal cliff.

Light, sweet crude oil futures for January delivery on the New York Mercantile Exchange rose 1.8% to settle at $88.07 a barrel. Gold futures won back some of their recent losses, as talk over whether Washington will be able to avert large-scale U.S. spending cuts and tax hikes put overall pressure on the dollar and boosted demand for riskier assets.

Gold for December delivery rose $10.70, or 0.6%, to settle at $1,727.20 an ounce on the Comex division of the New York Mercantile Exchange. February gold , the contract traded most actively, settled at $1,729.50 an ounce, also tacking on $10.70, or 0.6%. Compiled MORRISON SECURITIES PTY. LTD.

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