Global Markets Overview - 03/27/2012
FROM MORRISON SECURITIES PTY. LTD:
U.S. STOCK MARKETS:
U.S. stocks surged Monday, largely erasing last week's losses, after a speech by Federal Reserve Chairman Ben Bernanke signaled the central bank is committed to a monetary policy that's helped buoy stocks for three years.
The Dow Jones Industrial Average rose 130.67 points, or 1%, to 13,211.40. The S&P 500 Index gained 16.07 points, or 1.2%, to 1,413.18. The Nasdaq Composite added 46.53 points, or 1.5%, to 3,114.23.
Stock gains were widespread. On the Dow, only two of its 30 components fell. International Business Machines Corp., United Technologies Corp., and Exxon Mobil Corp. were the biggest point contributors. On the New York Stock Exchange, advancers outpaced decliners by three to one.
NYSE composite volume was 2.1 billion and Nasdaq composite volume midafternoon. Stocks added to broad gains after an index of pending home sales for February dipped from January, disappointing the expectations of some economists for a 1% rise. It was still higher than a year ago.
EUROPEAN STOCK MARKETS
Most European stock markets ended higher Monday after Germany's Ifo business-climate index surprised to the upside, while Spanish stocks underperformed in the wake of a regional election and ongoing worries about the country's fiscal outlook.
The Stoxx Europe 600 index rallied 1% to 268.21, rebounding from a low of 265.25 earlier in the day. The U.K.'s FTSE 100 index rose 0.8% to 5,902.70, the German DAX 30 index rose 1.2% to 7,079.23, and France's CAC 40 index rose 0.7% to 3,501.98. Energy-related stocks were among the biggest gainers.
Among the top performers in the Stoxx 600, Swedish oil-and-gas company Lundin Petroleum AB surged 7% after it said it encountered a 54-meter-gross oil column in an appraisal well.
In London, Tullow Oil PLC announced that it has made Kenya's first oil discovery and said the outlook for further success has been significantly improved. Shares of Tullow Oil rose 6.6%. BG Group PLC added 1.8% after it said its fourth Tanzania well discovered gas. Partner Ophir Energy PLC leapt 18.8%.
Other oil firms rose along with rising crude-oil prices. BP PLC advanced 0.9% and Royal Dutch Shell PLC gained 1.4%. The broader European stock markets also rose, looking to the U.S. and Germany for impetus.
U.S. Federal Reserve Chairman Ben Bernanke said in a speech that further improvements in the labor market are dependent on faster economic growth, in comments that traders interpreted as a sign the central bank is in no rush to undo its ultra-easy monetary policy.
In Germany, the Ifo business-climate index rose to 109.8 in March, beating analyst expectations. In Germany, BASF SE gained 1.9% after Warburg lifted the stock to buy from hold.
Metro AG, however, fell 1.6% to EUR29.51 after Credit Suisse cut its price target to EUR31 from EUR35. In France, oil-services firm Technip SA rose 4.1% after it secured a EUR600 million contract to develop a subsea-infrastructure project in the North Sea.
Also supporting, Schneider Electric SA rose 1.3% after Societe Generale upgraded the stock to buy from hold. Elsewhere, Spain's IBEX 35 index fell 0.7% to 8,224.70.
The Spanish government Sunday failed to secure a majority in an election in Andalusia, which may make it harder for Prime Minister Mariano Rajoy to implement austerity measures in that region to cut the country's deficit.
Separately, Italy Prime Minister Mario Monti reportedly said Spain could reignite the euro-zone debt crisis if it fails to impose adequate austerity measures.
ASIA-PACIFIC STOCK MARKETS
Asian stock markets ended mostly lower Monday as global growth concerns continued to keep many buyers at bay, while investors adopted a cautious approach ahead of data releases in the U.S. and Europe later in the week.
After seesawing for much of the day, Hong Kong's Hang Seng Index finished flat, China's Shanghai Composite Index rose 0.1% and Japan's Nikkei Stock Average added 0.1%. South Korea's Kospi fell 0.4%, while Taiwan's Taiex tumbled 1.4%, succumbing to profit-taking pressure after a three-day advance.
China Petroleum & Chemical Corp. gained 1.5% in Hong Kong and 0.1% in Shanghai after its 2011 net profit rose 2%. But China Construction Bank Corp. fell 1.2% in Hong Kong after it reported a 26% increase in 2011 net profit, but warned 2012 would be more challenging.
The performance also weighed on some other mainland banks traded in Hong Kong, with Bank of China falling 1.9% and Industrial & Commercial Bank of China declining 1.0%.
But those losses were offset by gains in local property firms, which advanced amid expectations that the weekend election of Leung Chun-ying as the next chief executive of Hong Kong may not hurt their outlook.
Sino Land jumped 4.0% and New World Development rose 3.8%, while Sun Hung Kai Properties added 2%. China Eastern, meanwhile, lost 1.1% in Hong Kong and 1.8% in Shanghai.
The airline separately reported that its 2011 net profit fell to CNY4.89 billion from CNY5.38 billion a year earlier. In Tokyo, Nomura Holdings dropped 2.7%, extending last week's losses amid reported allegations about an employee's involvement in insider-trading, related to a share offering by oil firm Inpex Corp.
But Inpex rose 0.9%, in line with broad gains for resource-sector stocks. Among other commodity-linked shares, steel maker JFE Holdings rose 2.3%, and Pacific Metals gained 0.2%.
COMMODITIES
Base metals closed mostly higher on the London Metal Exchange Monday, gaining ground later in the session following dovish remarks by U.S. Federal Reserve Chairman Ben Bernanke.
At the close, LME three-month copper was 1.8% higher at $8,535 a metric ton, while aluminum was up 0.5% at $2,185/ton. U.S. crude-oil futures prices eked out a modest 16-cent rise Monday and awaited direction from upcoming U.S. weekly oil inventory data due Wednesday.
Prices moved in a narrow $1.13-a-barrel trading range, the slimmest in a month, and have been wedged between $105 and $108 throughout March.
Light sweet crude for May delivery on the New York Mercantile Exchange settled up 16 cents at $107.03 a barrel. Brent crude on ICE Futures Europe rose 52 cents in late trading, to $125.62 a barrel.
Gold futures rose to their highest level in almost two weeks, as investors sought the metal as an alternative to the U.S. dollar after Federal Reserve Chairman Ben Bernanke reiterated his support for the central bank's accommodative monetary policies.
The most actively traded gold contract, for April delivery, rose $23.20, or 1.4%, to settle at $1,685.60 a troy ounce on the Comex division of the New York Mercantile Exchange, the highest ending price since March 13.