Global Markets Overview - 22 January 2013

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By Christine Gaylican | January 22, 2013 11:50 AM EST

U.S. MARKETS Closed on Monday.

U.S. markets were closed Monday for Martin Luther King Jr. day.

EUROPEAN STOCKS, BOND MARKETS

European stocks nudged higher after Germany's central bank delivered an upbeat assessment of the country's economic outlook, but moves were muted with Wall Street closed for a public holiday.

The benchmark Stoxx 600 index rose 0.3% Monday to 287.78. The U.K.'s FTSE 100 index gained 0.4% to 6180.98--its third consecutive gain and highest close since May 22, 2008.

Germany's DAX advanced 0.6% to 7748.86, and France's CAC-40 added 0.6% to 3763.03, its highest close since July 26, 2011.

Still, European stocks ended slightly higher, with sentiment underpinned by comments from Germany's central bank.

The Deutsche Bundesbank said the outlook for the domestic economy had improved and that any slowdown experienced by the Euro zone's largest economy would be short-lived.

The Bundesbank had earlier slashed its forecast for German growth next year to 0.4% from its June estimate of 1.6%, warning that the nation could sink into recession.

Since then, however, the central bank said companies' expectations have improved, particularly with regards to the outlook for exports.

Shares in Pearson fell 2.9% after the London-listed publisher cut its earnings forecasts for 2012. The publisher of the Financial Times newspaper said it was experiencing tough market conditions across its core markets, a trend it expects will continue through 2013.

Luxury brands suffered after Swiss watch and jewelry maker Cie. Financiere de Richemont's third-quarter revenue fell short of expectations on slowing demand in Asia. Shares slid 5.6%. LVMH Moet Hennessy Louis Vuitton was down 1% and Burberry fell 1.4%.

Royal Bank of Scotland rose 2.3% after a person familiar with the matter told The Wall Street Journal the bank was considering splitting its investment bank into two divisions. Novozymes rallied 7% after the Danish biotech firm reported a 38% rise in fourth-quarter net income. It said it expects to be able to retain the current level of profitability in 2013.

ASIA-PACIFIC STOCK MARKETS

Most Asian markets ended lower Monday, with Japanese shares sliding back from last week's multi-year highs as a two-day meeting at the Bank of Japan got underway.

The Nikkei Stock Average fell 1.5%. South Korea's Kospi, Hong Kong's Hang Seng Index and Taiwan's Taiex each slipped 0.1%. China's Shanghai Composite Index ended 0.5% higher amid ample liquidity conditions.

The drop in Japanese shares came as the dollar weakened ahead of a two-day policy meeting at the Bank of Japan that started earlier in the day.

The dollar has surged against the yen since late last year amid growing expectations that the BOJ will ramp up deflation-fighting measures to boost the Japanese economy.

But the monetary easing expected of the BOJ may have a positive impact beyond the country's borders, one analyst said. Some exporters to pared recent advances.

In the auto sector, Mitsubishi Motors Corp. dropped 3.2%, and Fuji Heavy Industries Ltd. fell 3.8%. Other manufacturing stocks were also hurt, with robotics firm Fanuc Corp. down 3.9% and  Mitsui Engineering & Shipbuilding Co. off 2.1%. Among financials, Nomura Holdings Inc. lost 1.4%.

Meanwhile, Hong Kong stocks hovered around two-year highs on Monday, with diversified firm Citic Pacific Ltd., which has an exposure to iron ore mining, gaining 2%, while ports operator Cosco Pacific Ltd. rose 2.3%.

Evergrande Real Estate Group Ltd. climbed 1.4%. Moody's Investors Service commented Monday that the firms recent share placing is credit positive because it will enhance the company's equity base and liquidity.

In Shenzhen, both the yuan-denominated A shares and the Hong Kong-dollar priced B shares of property major China Vanke Co. surged 10%.

The jump came after the firm late last week said it would move its Shenzhen-listed B shares to Hong Kong. The firm's Hong Kong-listed unit Vanke Properties Overseas Ltd. surged 12.8% as trade resumed following a halt.

Hong Kong-listed telecommunications equipment maker ZTE Corp. dipped 1.4% after warning it would post a loss in 2012. In South Korea, auto makers Kia Motors Corp. fell 1.5% and Hyundai Motor Co. shed 1.4%.

COMMODITIES

Base metals were a little lower at the close of London Metal Exchange open outcry trading Monday following a quiet, range bound start to the week. At the PM kerb close, LME three-month copper was down 0.1% at $8,055 a metric ton. Aluminum was 0.1% lower at $2,040.50/ton.

With U.S. market participants away from their desks for a public holiday and little on the macro agenda to drive sentiment, base metals made scant progress in either direction Monday. Compiled from MORRISON SECURITIES PTY. LTD.

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