Global Markets Overview - 7 February 2013

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U.S stocks pulled back as the energy and technology sectors struggled. The Dow Jones Industrial Average declined 31 points, or 0.2%, to 13949 Wednesday afternoon, after sliding as many as 66 points in the opening minutes of trading.

The Standard & Poor's 500-stock index slipped four points, or 0.3%, to 1507 and the Nasdaq Composite lost 11 points, or 0.3%, to 3161.

Energy and technology stocks fell the most among the 10 sectors of the S&P 500. Only consumer-discretionary and telecommunications stocks managed gains.

Dow component Walt Disney was one of the strongest stocks on the blue-chip index, rising 1.2% after the entertainment giant reported fiscal first-quarter earnings and revenue that topped analyst estimates, helped by growth in its media networks business. 3M tacked on 1.2% to top the Dow gainers, while Hewlett-Packard, the strongest Dow component this year, added 0.8%.

Merck, Intel and Caterpillar each lost about 1%, dragging the blue-chip measure lower. In other corporate news, Time Warner climbed 4.5% after the media giant exceeded fourth-quarter earnings forecasts, raised its quarterly dividend by 11% and authorized a new $4 billion stock-buyback program.

Ralph Lauren jumped 6.9%, leading the S&P 500 advancers, after reporting quarterly earnings that surged 28% amid an improvement in retail sales and widening margins.

C.H. Robinson Worldwide slumped 9.9%, making it the worst performer on the S&P 500, after the transportation and logistics company's quarterly earnings missed estimates and operating margin declined.


Worries over the political situation in Italy hurt sentiment across European markets Wednesday, as the renewed popularity of former Prime Minister Silvio Berlusconi stoked fears of financial chaos in his country.

Investors also stayed on the sidelines ahead of the European Central Bank's monetary policy meeting on Thursday. The Stoxx Europe 600 index lost 0.4% to close at 284.52.

The FTSE MIB stock index fell 0.7% to 16,602.85, with shares of UniCredit SpA down 1.7% and Intesa Sanpaolo SpA off 1.6%. Shares of Elan Corp PLC slid 8.8% after the biotech firm said Biogen Idec Inc. will pay $3.25 billion to gain full ownership and control of the multiple-sclerosis drug Tysabri.

Shares of Royal KPN NV lost 5.6% after Bank of America Merrill Lynch cut the Dutch telecom firm to underperform from buy. The shares slumped 16% Tuesday after the firm said it would raise EUR4 billion in a rights issue to cut debt.

In France, shares of ArcelorMittal SA gained 1.1% after the steelmaker said its loss widened in the fourth quarter but that it sees profitability picking up in 2013. The CAC 40 index, however, dropped 1.4% to 3,642.90.

Shares of Vinci SA gave up 3.3% after the construction firm reported a slight rise in 2012 profit but said it sees a difficult economic climate in 2013. Banks posted steep losses, with Societe Generale SA down 3.5% and BNP Paribas SA 2.6% lower.

In the U.K., shares of Royal Bank of Scotland Group PLC picked up 1.4%. The U.S. Commodity Futures Trading Commission ordered the bank to pay a $325 million fine to settle charges of manipulation and attempted manipulation of the London interbank offered rate. Shares of Hargreaves Lansdown PLC jumped 11%.

The investment manager reported a 30% rise in pretax profit for the first half and raised dividends to 6.3 pence from 5.1 pence. The U.K.'s FTSE 100 index closed 0.2% higher at 6,295.34. Germany's DAX 30 index fell 1.1% to 7,581.18, with shares of Commerzbank AG down 1.8%.

ASIA-PACIFIC STOCKS, BONDS   Asian stock markets were mostly higher Wednesday, with a weaker yen lifting Tokyo shares to a 52-month high. The Japanese currency fell versus the U.S. dollar overnight Tuesday after Bank of Japan Governor Masaaki Shirakawa said he would step down on March 19, three weeks earlier than the scheduled end to his term.

Mr. Shirakawa's decision to leave early will speed up the search for his successor. The new government is expected to choose a governor who will be more amenable to its plans to employ aggressive monetary easing to stimulate Japan's stagnant economy.

The sharp decline in the yen translated into an equally abrupt climb in Japanese stocks, with the Nikkei ending up 3.8% at 11463.75, its highest close since September 29, 2008. The gain was the market's largest single-day percentage rise since March 22, 2011.

Shares in exporters rose in response to the weaker yen while financial stocks gained on expectations they will benefit from asset-valuation appreciation following more aggressive central bank policy: Honda Motor was up 3.3% and Mizuho Financial Group was up 5.2% higher.

Toyota Motor Corp. benefited from a positive third-quarter earnings report. The automaker's stock was up 6.1% after announcing a 23% on-year increase in net profit for its most recent fiscal quarter and increasing its full-year net profit outlook. More broadly,

Asian markets were recovering from Tuesday's correction. In China, stocks were mixed. The Shanghai Composite Index was up less than 0.1% to 2434.48, ahead of trade and inflation data out Friday, while the Hang Seng Index in Hong Kong made a partial recovery from the sell-off on Tuesday, rising 0.5% to 23256.93. South Korea's Kospi Composite was down 0.1% to 1936.19.


Base metals on the London Metal exchange closed lower Wednesday, with most extending early losses toward the European close after a weakening euro pared demand.

At the close of open outcry trading, LME three-month copper, the flagship of the base metals complex, was 0.3% lower on the previous day's settlement at $8,245 a metric ton.

U.S. crude-oil futures pared early losses Wednesday after weekly government data showed a smaller increase in crude-oil stockpiles than many analysts were anticipating. U.S. crude-oil inventories rose 2.6 million barrels last week, according to the U.S. Energy Information Administration, below the 2.9-million-barrel increase forecast in a Dow Jones Newswires survey of analysts.

Stockpiles in Cushing, Okla., fell by 300,000 barrels, offering evidence that the supply glut at the key transit hub is slowly dissipating.

Light, sweet crude oil for March delivery settled 2 cents lower at $96.62 a barrel on the New York Mercantile Exchange.

Gold futures closed higher, recouping losses from the previous session and then some, with investors looking ahead to Thursday's European Central Bank policy meeting. April gold rose $5.30, or 0.3%, to settle at $1,678.80 an ounce on the Comex division of the New York Mercantile Exchange.

Platinum futures hit a 16-month high as ongoing concerns about supply cuts from top producer South Africa continued to draw new buyers to the market. Platinum for April delivery, the most active contract, rose $29.30, or 1.7%, to settle at $1,736.50 a troy ounce on the New York Mercantile Exchange. COMPILED FROM MORRISON SECURITIES PTY LTD.

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